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Best Practices for Handling a Major Internal Investigation or Corporate Crisis


Level: Intermediate
Runtime: 46 minutes
Recorded Date: September 19, 2023
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Agenda

  • Response First Steps
  • Responding to a Corporate Crisis
  • Auditors’ Assessments
  • Internal Investigations: Scope
  • Client Collaboration
  • Recent Trends
  • Independence
  • Privilege
  • Reporting
  • Takeaways

For NY - Difficulty Level: Both newly admitted and experienced attorneys

Description

In this panel from, securities law experts and SEC officials discuss how managing a corporate crisis or internal investigation requires a delicate balance of factors, including prioritizing tasks, assessing the impact on disclosure and regulators, and engaging with various stakeholders. Panel discussions underscore the iterative, flexible, and collaborative nature of crisis management, emphasizing the importance of seeking guidance, considering the needs of constituencies, and preserving privilege.
Auditors play a crucial role in assessing evidence, collaborating with boards and counsel, and navigating compliance and independence issues. Flexibility, open-mindedness, and daily consideration of privilege problems are essential in navigating the complexities of crisis management and internal investigations, along with close collaboration and cooperation between all involved parties.
Additionally, adapting to new disclosure rules, maintaining detailed evidence, and fostering a collaborative relationship with auditors are vital components of effective crisis management and investigation.

Provided By

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Panelists

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David Woodcock

Partner
Gibson, Dunn & Crutcher

David Woodcock is a partner in the Dallas and Washington offices of Gibson, Dunn & Crutcher. He is a co-chair of the firm’s Securities Enforcement Practice Group, and a member of the firm’s Securities Regulation and Corporate Governance, Accounting Firm Advisory and Defense; White Collar Defense and Investigations; Energy, Regulation and Litigation; Securities Litigation; and Oil and Gas Practice Groups.
Mr. Woodcock has been recognized as a leading attorney by Chambers, Lawdragon and Super Lawyers, among others. Most recently, he was recognized as one of Lawdragon’s 2023 500 Leading U.S. Energy Lawyers list which recognizes “outstanding elite” attorneys who “apply their knowledge to help old-school and new energy companies finance and build new power sources throughout the world.”
Mr. Woodcock’s background as a CPA, senior officer at the Securities and Exchange Commission (SEC), global law firm partner, and senior in-house corporate attorney at a Fortune 10 company provides a diverse set of experiences and perspectives that are helpful in guiding clients through an array of complex matters. His practice focuses on internal investigations and SEC defense, with a particular emphasis on accounting and financial reporting, corporate compliance, and audit/special committee investigations. Mr. Woodcock regularly advises clients on corporate securities and governance, the role of the board, shareholder activism, and ESG-related issues, including the energy transition, climate disclosures, enterprise risk management practices, cybersecurity, and related U.S./European regulations. He also counsels investment advisors and private equity funds in the context of SEC examinations and investigations, ESG matters, and portfolio due diligence and compliance.
Prior to joining Gibson Dunn, Mr. Woodcock was Assistant General Counsel – Corporate at ExxonMobil Corporation, where he led all aspects of corporate, securities, ESG/sustainability, and governance. Before that, he served as Head of Litigation in the Dallas office of an AmLaw 20 law firm. Earlier in his career, Mr. Woodcock served as Director of the Fort Worth Regional Office of the Securities Exchange Commission from 2011 to 2015. In this role, he led over 120 lawyers, accountants, and examiners on all aspects of the SEC’s enforcement and examination activities in four states (Texas, Oklahoma, Arkansas, and Kansas). During his tenure, Mr. Woodcock helped create, and served as chair of, the cross-office/division Financial Reporting and Audit Task Force, which was designed to enhance the SEC’s detection and prosecution of violations involving accounting and false financial statements. During this time, Mr. Woodcock oversaw investigations in nearly every major area of the SEC’s enforcement program, including public company disclosure and reporting; the Foreign Corrupt Practices Act (FCPA); insider trading; and investigations of SEC registrants. He also served as a member of the Enforcement Advisory Committee. Previously, Mr. Woodcock was an associate, and then partner, in the Austin office of a major law firm from 2001 to 2011.
Mr. Woodcock received his Bachelor of Science degree in Accounting from Louisiana State University in 1992. He was a CPA at Ernst & Young and Price Waterhouse for nearly five years before graduating with honors from the University of Texas School of Law in 2000. Mr. Woodcock clerked for Judge Howell Cobb in the U.S. District Court for the Eastern District of Texas from 2000 to 2001 before going into private practice.

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Jerome Tomas

Partner
Baker McKenzie

Jerome Tomas is Chair of the Firm's SEC and Financial Institutions Enforcement Group and co-chair of the North America Government Enforcement practice group. He has been recognized by Chambers for White Collar Crime & Government Investigations. He represents multinational companies faced with government investigations and conducts internal investigations to assess and remediate legal and compliance concerns in domestic and global operations.
With his experience as a former member of the SEC Division of Enforcement’s Cyberforce, the agency’s internet and cyber fraud unit, Jerome regularly advises companies involved in data security breaches and incident response. Jerome now leads teams of lawyers to address government law enforcement perspectives and where necessary, meet and refute government legal theories of corporate and individual liability head-on, while also being pragmatic and business-oriented for management and boards to compete internationally.
Jerome has extensive experience representing clients in government litigation and enforcement investigations before the SEC, DOJ, various United States Attorneys Offices and the Commodities Futures Trading Commission . On multiple occasions, he has obtained complete declinations of enforcement action from federal and state agencies. Jerome has handled investigations and prosecutions relating to the FCPA, securities fraud and manipulation, SEC reporting-related misconduct, financial statement disclosures, auditor independence, insider trading, commodities manipulation, money laundering, the Food Drug and Cosmetic Act, including the Responsible Corporate Officer Doctrine, the US wire and mail fraud statutes and OFAC-related matters, among others.
Jerome also represents clients in connection with data security incidents, providing legal advice and navigating through initial reports of potential compromise, to investigating, coordinating, and reporting to federal and state authorities, consumer notification and ultimately remediating. Jerome regularly advises multinational companies on risk mitigation and compliance in the context of international mergers and acquisitions, other business combinations, and general corporate transactions. He has advised on anticorruption and trade compliance in transport, telecommunications, mining, oil and resource extraction, chemical, defense, pharmaceutical, health care, agriculture, technology, hotel, travel, hospitality, consumer products and manufacturing industries. He also advises on compliance with US and international anti-money laundering laws and the US Bank Secrecy Act.

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Andrew Shoenthal

Counsel to the Regional Director (Chicago)
U.S. Securities and Exchange Commission

Andrew Shoenthal is Counsel to the Regional Director of the United States Securities Exchange Commission’s Chicago Regional Office. Andrew is responsible for advising on legal, policy, and operational issues, as well as leading, managing and coordinating national priority matters and cross-divisional initiatives. Prior to this role, Andrew spent ten years as a member of the Division of Enforcement’s specialized Asset Management Unit and served as Senior Advisor to the unit’s leadership. As an Enforcement attorney in the AMU, Andrew focused on investment adviser fraud and cases involving false performance, excessive and undisclosed fees, and conflicts of interest. He worked on the SEC's Share Class Selection Disclosure Initiative that resulted in refunds of over $125 million to investors; brought the first enforcement action using analytics to uncover hedge funds with inflated performance; and litigated some of the Commission’s earliest actions involving mutual fund share class selection, undisclosed 12b-1 fees, and brokerage mark-ups. Before working at the SEC, Andrew was an associate at the Chicago office of Sidley Austin LLP. He received his J.D. magna cum laudefrom the University of Minnesota Law School and his B.A. with honors in Public Policy from the University of Chicago.

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Jessica Pulliam

Partner
Baker Botts

Jessica Pulliam is Chair of the Trial Department in Dallas and Co-Chair of the firmwide Securities and Shareholder Litigation Group. Jessica defends high-stakes lawsuits against public companies and their officers and directors, private enterprises and professional firms.
Chambers USA has called her “Excellent” (2019) and commented: “‘[s]he is a phenomenal architect of litigation strategy’" (2020) and “[s]he's a real star lawyer - she has a strong legal mind and brings solid preparation to everything.” (2021). Law360 (2019) and The Legal 500 (2021) have recognized Jessica's leadership in the field of securities and shareholder litigation. Jessica has tried cases in Delaware and Texas, regularly appears before regulatory agencies including the SEC and PCAOB and conducts internal investigations. Her litigation experience ranges from financial fraud and accounting restatements matters to suits involving wrongful death, whistleblowers and corporate crisis. She excels at telling a client's story and helping witnesses - everyone from a former Vice President of the United States and multiple CEOs to hard-hat wearing field workers - during testimony.
Jessica takes bold positions for her clients, driving critical legal change in multiple fields:
--Jessica defended Halliburton Company for more than a decade in one of the most closely watched securities cases of all time, securing for defendants the right to rebut the presumption of reliance at class certification in Halliburton Co. v. Erica P. John Fund, Inc., 134 S. Ct. 2398 (2014) and then handling direct and cross examination of expert witnesses in the first evidentiary hearing of its kind following that landmark ruling.
--Her work defending officers and directors in a derivative suit recently led the court to comment that the excess length of the allegations was a futile attempt to make the court conclude “that there’s a lot of smoke and so there must also be fire,” Smith v. Carrillo, Civ. Action No. 18-1399-RGA (Nov. 26, 2019).;
--Jessica’s defense of a professional firm led to not only a take-nothing judgment but also a new standard in Texas for determining when reliance on an allegedly false statement is justified, Grant Thornton LLP v. Prospect High Income Fund, 314 S.W.3d 913 (Tex. 2010). Building on her work in Grant Thornton, Jessica crafted the defense for a major financial institution that led to yet another take-nothing judgment in JPMorgan Chase Bank, N.A. v. Orca Assets G.P., L.L.C., 546 S.W.3d 648 (Tex. 2018), reh'g denied (June 15, 2018), which held that the presence of red flags, including a contractual negation of warranty, negated any reliance on allegedly fraudulent statements as a matter of law
Following graduation from law school, Jessica served as law clerk to the Honorable Barbara M.G. Lynn of the United States District Court for the Northern District of Texas.
Jessica is active in the community. She long served as Secretary of the Board of Directors of the Dallas Contemporary, Dallas' contemporary art museum. She serves as a Director of the Texas Law Review Association. She actively supports many other organizations including Attorneys Serving the Community, an organization of women lawyers supporting local nonprofits.

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Joseph Gardemal

Managing Director
Alvarez & Marsal

Joseph T. Gardemal III is a Managing Director with Alvarez & Marsal Disputes and Investigations in Washington, D.C. He has more than 30 years of experience in forensic accounting investigations, valuation, auditing, and financial management for publicly traded, closely held, and public sector entities.
Mr. Gardemal currently serves as the court-appointed Independent Monitor over GPB Capital Holdings, LLC, a New-York-based alternative asset management firm that acquires income-producing private companies.
Mr. Gardemal has served as a court-appointed expert in U.S. District Court and as an accounting and valuation expert for the U.S. Securities and Exchange Commission (SEC) and the U.S. Department of Justice (DOJ). He has led complex multi-national investigations and damages analyses and presented findings to the SEC, DOJ, corporate boards and audit committees, and other stakeholders. Mr. Gardemal has testified as an expert witness and presented expert reports in the U.S. and abroad, including U.S. District Courts, the Supreme Court of Bermuda, the U.K. High Court of Justice, Chancery Division, and the ICC International Court of Arbitration.
Mr. Gardemal has provided audit, business, and litigation consulting services for clients in various industries, including auto manufacturing, distribution, and retailing; government contracting/defense and aerospace; real estate and construction; professional services; and insurance and reinsurance.
Prior to joining A&M, Mr. Gardemal was a Managing Principal in the CapAnalysis Group of Howrey, LLP. Previously, he was the CFO of the New Orleans District Attorney’s Office and an auditor in public accounting. Mr. Gardemal is a U.S. Army veteran of the Iraq War. As a Major, he commanded a company in the 9th Psychological Operations Battalion, U.S. Army Special Operations Command. He received the Bronze Star and the Iraq Campaign Medal with two campaign stars for his service; his unit received the Navy Presidential Unit Citation.
Mr. Gardemal earned a bachelor's degree in business administration (accounting concentration) from Loyola University. He is a Certified Public Accountant (CPA), a Certified Fraud Examiner, a Certified Valuation Analyst, and a Certified Government Financial Manager. He holds the Accredited in Business Valuation designation from the American Institute of CPAs and the Certified in Distressed Business Valuation designation from the Association of Insolvency and Restructuring Advisors (AIRA).


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