Bloomberg News

Baker McKenzie, Patton Boggs, Jones Day: Business of Law

January 24, 2013

A founding member of the Public Company Accounting Oversight Board and former general counsel of the Securities and Exchange Commission, Daniel Goelzer, is rejoining Baker & McKenzie LLP as a partner in Washington.

Goelzer, who co-headed Baker & McKenzie’s North America banking, finance and major projects practice during his 1990 to 2002 tenure at the firm, will take on a special role now working across the corporate, securities and banking compliance practices.

He’ll handle corporate governance and best practice regulatory compliance matters, represent financial and accounting firms in rule-making and enforcement actions, as well as perform other roles, such as financial reporting and asset management for clients.

John Conroy, former firm chairman and current head of global strategic initiatives, said in an interview that Goelzer’s strong regulatory experience will enable him to work with the firm’s leading lawyers in several practice groups to advise clients. “The biggest challenge will be how to manage the competing demands for Dan. What’s the priority? That’s something that we really can’t say right now but the nice thing is that they are interrelated.”

Goelzer will work with the firm’s compliance and enforcement head Paul McNulty, the former U.S. Deputy Attorney General. The firm’s compliance practice has been expanding with recent hires that include Kaoruko Suzuki in Tokyo, who worked as a securities investigator at Japan’s Securities and Exchange Surveillance Commission’s Disclosure Statements Inspection Division. In 2010, Marc Litt, who was the lead prosecutor in the investigation of Bernard Madoff and a former member of the Southern District of New York’s Securities and Commodities Fraud Task Force joined the firm.

Goelzer said in an interview that the experience he and other ex-government offices have had at the SEC and the PCAOB will be a benefit to his private clients because it allowed people educated in investor protection to give clients the government perspective. “We understand what the commission is trying to accomplish and that’s a tremendous benefit to the public,” he said.

From 1983 to 1990, Goelzer was general counsel of the SEC where he advised the Commission on issues including rulemaking, litigation and enforcement matters, the firm said. He joined Baker & McKenzie after that, where he represented large financial institutions. He was involved in creating the Association of Global Custodians, a group of financial institutions that advocates for and provides securities safekeeping services and asset-servicing functions to institutional cross-border investors worldwide, Conroy said.

Goelzer left Baker & McKenzie in 2002 to start at the newly formed PCAOB. He stepped down in March, when term limits required him to leave the regulatory organization. He was acting chairman from August 2009 through January 2011. During his tenure, he helped establish auditing standards for the U.S. accounting industry following the implementation of The Sarbanes-Oxley Act of 2002, the firm said.

Baker & McKenzie has more than 4,000 lawyers in 72 offices in 45 countries.

Milbank Tweed Executive Compensation Lawyers Moves to Weil

Weil, Gotshal & Manges LLP hired Paul J. Wessel in New York as a partner and leader of the executive compensation and employee benefits practice group. Wessel joins the firm from Milbank, Tweed, Hadley & McCloy LLP, where he was head of that firm’s executive compensation and employee benefits group, the firm said.

“Having a high-quality, global, executive compensation and employee benefits practice is critical to serving our clients, and we are delighted that Paul will lead this very important practice group at Weil,” executive partner Barry M. Wolf said in a statement. “Paul brings an important mix of M&A, private equity and bankruptcy experience, and a well-earned reputation as a top transactions counseling lawyer that will further enhance our global M&A and private equity transactions capabilities.”

Wessel has 25 years of experience handling executive compensation and employee benefits matters. He has experience advising public companies and their boards of directors on compensation matters and also counsels clients on the compensation and benefits aspects of bankruptcy and restructuring matters.

Weil has approximately 1,200 lawyers in 21 offices in the U.S., Europe, Asia and the Middle East.

Former Texas Railroad Commissioner Jones Joins Patton Boggs

Elizabeth Ames Jones, who resigned from the Texas Railroad Commission last year to pursue a state Senate seat, joined Patton Boggs LLP’s Public Policy and Energy and Natural Resources practice groups in Washington.

Jones was appointed to the commission, which regulates oil and gas drilling, pipeline permitting and other energy issues in the state, in 2005 by Governor Rick Perry. She was elected to a six-year term as one of three members on the commission in 2006, and resigned 11 months before her term expired to run for a state Senate seat.

Jones will be splitting her time between the firm’s Washington and Dallas offices.

Patton Boggs has about 550 attorneys in six offices in the U.S. and three in the Middle East.

Mayer Brown Hires Tax Lawyer From Greenberg Traurig

Mayer Brown LLP announced that capital markets tax attorney Mark H. Leeds has joined the firm in New York as a partner in the tax transactions and consulting practice. Previously, he was a shareholder in the New York office of Greenberg Traurig LLP.

Leeds focuses his practice on the tax consequences of capital markets products and strategies, including over-the- counter derivative transactions, swaps, tax-exempt derivatives and strategies for efficient utilization of tax attributes, the firm said.

Prior to his law firm experience, Leeds was a managing director and senior tax counselor with Deutsche Bank AG in New York, served as the general counsel of a credit derivative company and was a partner at Deloitte & Touche, where he led the capital markets tax practice.

Mayer Brown has about 1,500 lawyers at 20 offices in the U.S., Europe and Asia.

Private Equity Partner Sturman Joins Covington & Burling

William L. Sturman joined Covington & Burling LLP’s corporate practice as a partner in the New York office. He was previously a private equity partner Akin Gump Strauss Hauer & Feld LLP.

Sturman counsels private equity fund sponsors and investors on a wide range of fund formation and regulatory issues. He has extensive experience advising on seeding arrangements for early generation funds and fund managers and investment professionals’ carried interest arrangements.

Covington & Burling LLP has more than 800 lawyers at 10 offices in the U.S., Europe and Asia.

Chadbourne Hires Latin American Banking and Finance Lawyer

Margarita Oliva Sainz de Aja, a banking and finance lawyer, has joined Chadbourne & Parke LLP as an international partner in the Latin America group. She will divide her time between the New York, Mexico City and Sao Paulo offices. She was previously senior counsel at Allen & Overy LLP.

Oliva specializes in advising lenders and borrowers on corporate finance transactions, including structured financings and other secured and unsecured U.S. and cross-border financings and capital markets offerings. She also has experience in project finance matters.

Chadbourne & Parke has lawyers at 12 U.S. and international offices.

Firm News

David Wales Named Head of Jones Day’s Antitrust Practice

Jones Day has announced that David P. Wales succeeds Phillip A. Proger as head of the firm’s global antitrust and competition law practice. Proger, who has overseen Jones Day’s antitrust practice since 1994, will continue to represent clients on antitrust matters as a partner in the Washington office.

Wales, also based in Washington, spent three years at the Federal Trade Commission, and from 2008 to 2009 served as Acting Director of the Bureau of Competition, where he oversaw all of the agency’s antitrust enforcement, supervising almost 300 lawyers and staff, the firm said. Major matters handled during his tenure included Whole Foods’ acquisition of Wild Oats and lawsuits against Cephalon and Solvay Pharmaceuticals for exclusion payment agreements. From 2001-2003, Wales also served as counsel to the Assistant Attorney General in the U.S. Department of Justice’s Antitrust Division, where he was involved in Microsoft case, the DirecTV/Echostar merger, and Northrop Grumman’s acquisition of TRW.

The firm’s antitrust and competition law practice has grown to include more than 150 lawyers in 25 cities in the U.S., Latin America, Europe and the Asia-Pacific region.

Jones Day has more than 2,400 lawyers at 37 offices throughout the U.S., Europe and Asia.

News

London Whale Case Among Dwindling Securities Class Actions

The number of securities fraud class-action cases filed last year fell 19 percent as litigation over mergers and acquisitions and the credit crisis decreased, according to a report.

Major securities fraud cases in 2012 included litigation against Facebook Inc. (FB:US) over its initial public offering, and against JPMorgan Chase & Co. (JPM:US) over more than $6 billion in trading losses at the bank.

The 152 cases filed in 2012 fell from 188 in 2011 and represented the second-lowest level in 16 years, according to the report by Stanford Law School and Cornerstone Research, a consulting firm.

“The question is if this is the beginning of a long-term trend or a reflection that there haven’t been any market disruptions in the past year,” Mark Holland, a partner at law firm Goodwin Procter LLP, said in an interview. “I think it’s an aberration.”

Last year marked an end to securities fraud class-actions related to the credit crisis as no new cases were filed compared to three in 2011, according to the report. Credit crisis cases peaked in 2008 at 100.

Federal cases related to mergers and acquisitions dropped to 13 in 2012 compared with 40 in 2010 and 43 in 2011, according to the report. Those cases are now being pursued almost exclusively in state courts.

“The trends that we saw in the last few years just didn’t occur this year,” said John Gould, a senior vice president at Cornerstone, which prepared the report with the Stanford Law School Securities Class Action Clearinghouse.

“Even though securities filings are down, it doesn’t mean securities work is down,” Holland said. “We’re still pretty busy with the backlog.”

Class-action securities filings against financial companies fell, according to the report. They were defendants in 15 filings, or 10 percent of all filings, compared with 25 filings in 2011 and 43 in 2010.

For more, click here.

AIG Saw Starr Lawsuit as Likely to Fail, Damaging to Insurer

American International Group Inc. (AIG:US) opted against joining a lawsuit against the U.S. government over its 2008 bailout because the case was unlikely to succeed and risked harming a reputation the insurer is seeking to restore.

The case “threatened to destroy much of the good work that AIG and its employees had done rebuilding AIG and its name,” the insurer’s board said in a letter released yesterday from its lawyers. “This concern was consistent with the media coverage and statements made by elected officials highly critical of AIG for even considering the demand.”

The insurer’s board voted unanimously on Jan. 9 to reject joining the suit, filed by former AIG Chief Executive Officer Maurice “Hank” Greenberg’s Starr International Co. Greenberg, 87, says the U.S. violated shareholders’ rights by taking over New York-based AIG during a bailout that began in 2008 and swelled to $182.3 billion.

“Starr’s claim had a low likelihood of success on the merits,” said Paul Curnin, an attorney for AIG’s board at Simpson Thatcher & Bartlett LLP. He estimated Starr’s chance of prevailing at about 20 percent, according to the letter, signed by him and Collins J. Seitz, a lawyer for the board at Seitz Ross Aronstam & Moritz LLP.

The letter was addressed to David Boies, who represents Greenberg’s Starr at Boies, Schiller & Flexner LLP. It was included in a filing AIG made today in a court in Washington.

Dawn Schneider, a spokeswoman for Boies, declined to comment.

Greenberg’s case required AIG to weigh suing the U.S. because it makes claims on the company’s behalf. News of the deliberations drew criticism from lawmakers including Senators Elizabeth Warren and Robert Menendez and Representative Elijah Cummings, who said suing the U.S. would be an insult to taxpayers.

The case is Starr International Co. v. U.S., 1:11-cv-00779, U.S. Court of Federal Claims (Washington).

For more, click here.

Litigation

GE Settles FHFA Suit Over Mortgage Bonds Sold to Freddie Mac

General Electric Co. (GE:US) settled a lawsuit filed by the Federal Housing Finance Agency over losses on mortgage bonds sold to Freddie Mac, the regulator said.

FHFA, which oversees Fannie Mae and Freddie Mac, sued GE and underwriters Morgan Stanley (MS:US) and Credit Suisse Group AG (CS:US), saying mortgage loans backing about $550 million in securities didn’t live up to their promised quality.

“This settlement resolves the dispute between FHFA and GE consistent with FHFA’s responsibilities as conservator of Freddie Mac,” Alfred M. Pollard, FHFA’s general counsel, said in a statement. “FHFA is pleased this lawsuit has been resolved and appreciates the work of Freddie Mac in this matter.”

Pollard didn’t disclose the terms of the settlement. A spokesman for Fairfield, Connecticut-based GE couldn’t be reached for comment.

The case against GE is among a group of lawsuits FHFA filed against banks over mortgage securities sold to Fannie Mae and Freddie Mac.

The agency said in a court filing yesterday that it was dropping claims against GE, Morgan Stanley and Credit Suisse.

The case is Federal Housing Finance Agency v. General Electric Co., 11-7048, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Elizabeth Amon in Brooklyn, New York, at eamon2@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.


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