In this case, a publicly traded company in Vermont was allegedly ill-advised by its counsel, an error which eventually resulted in the company’s bankruptcy. The attorney for this particular matter represents the trustee of the former company. The corporation was an agency and finance company that distributed financial services through a network of franchisee and company-owned locations. At its peak, the company had nearly one thousand franchise locations. The debtors, and several other affiliated companies, were engaged primarily in the business of selling financial services through franchisees. The company’s board was divided into three committees, the Executive Committee, the Compliance Committee, and the Audit Committee. The audit committee and the compliance committee were being advised by the defendant and an external auditor. The defendant drafted, edited, and reviewed the company’s various SEC filings which were falsely drafted and improperly submitted. As a result, the company’s board of directors failed to make numerous informed decisions regarding the competence of the company’s external auditors and the accuracy of the company’s financial statements.
Question(s) For Expert Witness
- 1. Have you ever worked as a legal counsel for the board of a publicly traded company?
- 2. Are you familiar with the Sarbanes-Oxley Act? If so, please describe your background/experience with the act.
- 3. Have you ever, or have you ever been part of a team that has reviewed the financials of a publicly traded company to ensure their compliance with the Sarbanes-Oxley Act?
Expert Witness Response E-007723
I have represented many publicly traded companies over the course of the years with respect to their SEC reporting obligations, other securities law compliance and corporate governance matters. I was a full equity partner in corporate and securities law at two major AmLaw 100 firms prior to recently entering academia. I worked on public company representation of this kind throughout my legal career in private practice spanning roughly 15 years. This includes working directly with CEOs, CFOs, boards and board committees (including audit committee and compensation committee). I have reviewed and/or drafted untold numbers of public company disclosure filings with the SEC. While I was at Wilson Sonsini in Silicon Valley, immediately after enactment of the Sarbanes-Oxley Act (SOX) I did a deep technical review of the statute. I then tracked the SEC’s broad ranging rulemaking process under SOX, preparing a summary of the material terms of each proposed and final rule promulgated by the SEC for the purpose of implementing the various SOX mandates. The overview memorandum I prepared and maintained in this regard was sent by Wilson to its entire public company client base on more than one occasion. I was also in contact with the SEC during this period of time, and brought to the SEC’s attention an error in its final, promulgated Form 8-K real-time reporting rules. The SEC later adopted a correcting release primarily for the purpose of curing that error. As former outside securities regulatory counsel to numerous public companies, an inherent, necessary part of that job is reviewing compliance with disclosure and other obligations imposed either directly by SOX or by SEC rules adopted under SOX.
Expert Witness Response E-008013
In the last two years, I have provided legal advice to two publicly traded corporations, including one Fortune 100 company, relating to three different matters that involved actual or threatened claims under Sarbanes-Oxley. Two of the three claims involved the conduct of lawyers as well as persons responsible for accounting matters. I have been a part of teams that have reviewed the financials of publicly traded corporations as it related to reporting requirements. I also have reviewed financials related to an allegation under Sarbanes-Oxley that the company’s financials did not accurately record revenues.