Challenging the SEC in Federal Court: Recent Developments in Case Law and Practice Notes

Program Number: 3103

Program Date: 01/14/2021

Description

Challenging an ongoing investigation by the SEC is a daunting task, particularly for those identified as subjects of the investigation. Two recent holdings, one by the Third Circuit in Gentile v. Sec. & Exch. Comm’n, 2020 WL 5416297 (3d Cir. Sept. 10, 2020) and the other by the United States District Court for the District of New Jersey in Sec. & Exch. Comm’n v. Gentile, 16-cv-01619-BRM-JAD (Order Sept. 29, 2020), both of which involved the same parties, offer some clarification on when and how best to mount such a challenge. The Third Circuit’s opinion makes clear that the SEC’s ability to investigate is one of the “rare circumstances” in which an agency’s action is exempt from the waiver of sovereign immunity that might otherwise apply under the Administrative Procedure Act and, as a result, is not subject to judicial review. By contrast, the district court’s opinion reinforces that, once an investigation results in an enforcement action in federal court, the SEC is subject to the court’s rules and review as any other litigant. Taken together, these opinions present both practitioners and those in the securities industry with useful guidance in when and how to challenge the SEC.

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Available in states

California, Colorado Eligible, Florida, Georgia, New Jersey Eligible, New York, Texas Self Study

Credit Information

50 minute credit hour - 1.0 General CLE credit, based on a 50-minute credit hour
60 minute credit hour - 1.0 General CLE credit, based on a 60-minute credit hour

State Program Numbers

Presenters


Jay A. Dubow, Esq.

Troutman Pepper Hamilton Sanders LLP

Jay Dubow co-leads the securities investigations and enforcement practice at Troutman Pepper. He focuses his practice on complex business litigation, with a special emphasis on defending against shareholder derivative and securities class action litigation. He also represents clients involved in investigations by the U.S. Securities and Exchange Commission (SEC) the Pennsylvania Department of Banking and Securities, and various self-regulatory organizations, including the Financial Industry Regulatory Authority, Inc. (FINRA). He also conducts internal investigations on behalf of clients. Such investigations have included allegations involving the Foreign Corrupt Practices Act (FCPA), whistle blower claims, financial fraud, and civil and criminal violations of various federal and state laws.

Jay also counsels cannabis and CBD industry clients on corporate and regulatory issues, as well as the potential risks both for cannabis-focused companies and non-industry participants doing business with cannabis companies.

Jay previously worked at a public credit card company as senior vice president, general counsel, and chief administrative officer. Jay began his career as a staff attorney and then branch chief in the Division of Enforcement of the SEC in Washington, D.C.

Active in local and national bar associations, Jay is a leader in the American Bar Association’s Business Law Section and currently serves as vice chair of the Business and Corporate Litigation Committee, co-chair of the Cannabis and Alcoholic Beverages Subcommittee, and vice chair of the Criminal and Enforcement Litigation Subcommittee. He is on the editorial board of The Business Lawyer, the law review of the Section of Business Law of the American Bar Association.

 

Mary Grace W. Metcalfe, Esq.

Troutman Pepper Hamilton Sanders LLP

Mary Grace W. Metcalfe is an associate in the White Collar and Government Investigations practice at Troutman Pepper. In addition to representing clients in all stages of litigation and mediation, she advises a wide variety of clients facing investigations by federal and state agencies. Mary Grace also has experience in general commercial litigation, international arbitration, and cross-border dispute resolution.

Prior to joining the firm, Mary Grace clerked in the Eastern District of Pennsylvania and the Northern District of Mississippi, after which she joined a securities litigation boutique. She has appeared and successfully argued before the United States District Court for the Southern District of New York, United States Bankruptcy Court for the Southern District of New York, various New York County Courts, and multiple arbitral tribunals.

Mary Grace remains involved in supporting the various international moot competition teams at New York University School of Law, where she co-founded the International Mediation Moot Team. She is also an Alumna Editor of the European International Arbitration Review.

 

Ghillaine A. Reid, Esq.

Troutman Pepper Hamilton Sanders LLP

Ghillaine Reid co-leads the securities investigations and enforcement practice at Troutman Pepper. She focuses her practice on government and securities regulatory investigations, financial services litigation, commercial litigation and corporate compliance. Drawing on her experience in government service and private practice, Ghillaine regularly represents corporations and individuals in investigations conducted by the Securities & Exchange Commission, the Department of Justice, the Financial Industry Regulatory Authority and other government and regulatory agencies. Ghillaine has successfully defended several high profile SEC investigations and enforcement proceedings involving a wide range of significant issues, including insider trading, accounting fraud, market manipulation and broker-dealer sales practice violations. Prior to entering private practice, Ghillaine was a Branch Chief and Staff Attorney in the New York Regional Office of the Securities & Exchange Commission’s Division of Enforcement, where she investigated and litigated a wide range of securities enforcement matters.

Ghillaine also represents clients in complex financial services and commercial litigation matters, in both federal and state courts. She has achieved favorable outcomes in cases involving fraud, breach of contract, breach of fiduciary duty, misrepresentation and tortious interference. She has also successfully defended clients in large scale arbitration proceedings, both through

 

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