It may not be a good time to be a white-collar criminal—but it’s a great time to be a securities lawyer.
Congress’ 2010 passage of the Dodd-Frank Act, a sweeping financial regulatory reform bill, marked the beginning of a sea of change in securities enforcement that is making it harder than ever to get away with securities fraud. (Consider this pithy stat: The last big piece of financial regulatory reform legislation, 2002’s Sarbanes-Oxley Act, was 33 pages long. Dodd-Frank? 2,300 pages.) That’s good news, not only for American investors, but also for securities lawyers, whose services providing legal defense to those accused of securities fraud will certainly be in growing demand in the coming years.
That was one of the takeaways from a Los Angeles County Bar Association-organized panel discussion last month on recent developments in securities enforcement. At the event, the panel members—David Greene, director of FINRA’s Southern California district; John F. Hartigan, of Morgan, Lewis & Bockius LLP; Beong-Soo Kim, assistant U.S. attorney and chief of the Justice Department’s major frauds section; Michele Layne, associate director of enforcement for the SEC’s Pacific Region; and Robert C. Rosen, from the law firm Rosen and Associates—talked about a variety of ways Dodd-Frank has increased financial-regulation enforcement. Astute securities lawyers will see that with this stepped-up enforcement comes stepped-up opportunity.
Take, for example, one topic the panelists discussed: Wells notices. These are letters that financial regulatory agencies send to companies to notify them that they are considering opening an investigation and to give the companies a chance to justify themselves. More scrutiny from regulators means more Wells notices, which in turn means more need for securities attorneys to respond to the notices and attempt to obviate an investigation.
The panelists also pointed out that because corporate wrongdoing is often brought to light by whistle-blowers, and because companies often retaliate against whistle-blowers, white-collar crime cases frequently involve both securities and employment lawyers. For lawyers in those fields, tighter regulation means more cases.
The bottom line here (unlike in some financials) is clear: If you’re a securities lawyer (or an employment lawyer) in this new regulatory framework, there’s work to be had.
-By Berbay Principal Sharon Berman