You've got to respect the U.S. Securities and Exchange Commission for trying to hold actual human beings responsible for alleged corporate wrongdoing.

But here's the thing. They've got to target the right person, and make sure there was in fact wrongdoing.

Agency lawyers came up short on both counts when a federal judge in Rhode Island unequivocally vindicated Wells Fargo banker Peter Cannava.

It was a home run for a Nixon Peabody team led by partner Brian Kelly, along with Kathleen Burns, Charles Dell'Anno, Stephen LaRose and Steven Richards.

Indeed, Kelly's skills of persuasion were on full display when U.S. District Judge John McConnell Jr. questioned him at length during a summary judgment hearing on Tuesday. In the end, McConnell took the rare step of ruling from the bench to dismiss the case on summary judgment.

Which is a pretty good sign that the decision was not a close call.

“There's simply no evidence that Mr. Cannava acted in bad faith or had knowledge of any wrongdoing,” the judge said, according to a transcript of the hearing. “In fact, the evidence seems to this court to point to the fact that Mr. Cannava, rather than acting recklessly, actually engaged in a good faith, professional analysis and review.”

The case stemmed from an ill-fated venture by former Major League Baseball pitcher Curt Schilling—a video game company called 38 Studios (named after his jersey number).

Looking to create jobs and boost economic growth, the state of Rhode Island in 2010 offered the company a taxpayer-guaranteed, $75 million loan to relocate from Massachusetts to Providence.

But two years later, 38 Studios went bankrupt. Now, Rhode Island taxpayers are on the hook for about $38.6 million, according to WPRI.

Assorted litigation followed, including a securities fraud suit by the SEC against The Rhode Island Economic Development Corporation, which issued the $75 million bond, and Wells Fargo Securities, which underwrote the transaction.

According to the SEC's complaint, the defendants knew that $75 million wasn't going to be enough get 38 Studios off the ground, but didn't tell bond investors about the $25 million “funding gap.”

The SEC also sued three individuals. Two of them—former executives with the economic development agency—immediately settled for $25,000 each without admitting or denying wrongdoing.

But Cannava, who was tagged by the SEC as the lead banker on the deal, was determined to fight, even after Wells Fargo settled for $800,000 in March and the economic development agency settled for $50,000 two years before.

“He didn't do anything wrong,” said Kelly—who before he joined Nixon Peabody in 2014 led the prosecution of fugitive mobster James “Whitey” Bulger—in an interview. Had Cannava settled, “he would have unfairly been labeled a violator of the securities laws. It would have been ruinous to his reputation and his career.”

In framing the defense, Kelly stressed a few key themes.

One was that Cannava, who was 30 years old when he worked on underwriting the bond, was unfairly singled out by the SEC as the fall guy.

“What's really going on here is, a couple of years ago there was a DOJ policy where you had to throw an individual in whenever you charged a company. I think it was called the Yates memo or something to that effect, and that's how Cannava gets dragged in,” Kelly told McConnell at the hearing. “The SEC wants an individual scalp, and it's not fair. It's not appropriate.”

Kelly pointed out that his client “was part of a large working group. In other words, there were lawyers involved, there were other executives from Wells Fargo involved, there were financial people, and they spent hours and hours working on this 300-page bond document, the so-called PPM,” he said. “It's not as though Mr. Cannava on his own decided what should be disclosed or what shouldn't be disclosed. He was working hand in glove with lawyers, other executives.”

Arguing for the SEC, Kathleen Shields responded that Cannava “was a senior banker on this transaction. He was excited to have that role.”

McConnell sounded skeptical. “A 30-year-old senior banker?”

“He sold—he stepped up and sold himself as being that person on this deal,” Shields said.

“What good 30-year-old in the finance industry doesn't do that?” the judge responded.

“The SEC doesn't try to pick on people. They look at the—at what actually happened in the case,” Shields said. “And if you look at who had responsibility in this case, he may have been 30, he may have been 40, whatever age he was, he was the person with the responsibility for making sure that the disclosure in this PPM was fair and accurate and complete.”

Except Kelly pointed to evidence that showed Cannava being diligent and flagging disclosures that even the Wells Fargo compliance team had overlooked.

For the SEC to prevail in its case against Cannava, it wasn't enough to show he was negligent. The government had to prove he was reckless.

“He did not act recklessly. That's the bottom line. They have no evidence of recklessness,” Kelly said, according to the transcript.

Although Wells Fargo agreed to settle, that's not relevant, he continued. For the bank, Kelly reminded the judge, “the standard's different. It's negligence. And they're a big company. That's their regulator. They have to capitulate at a certain point … So they paid the money, and they walked away.”

Kelly argued that neglecting to mention the $25 million funding gap was not material.

Initially, McConnell sounded skeptical. “The finances of a company that's the subject of bonds issuing is a—it's not like they, you know, didn't disclose the color of the car that was involved,” the judge said. “I mean, it's not absurd for the government to believe that the finances of the underlying company were significant to investors.”

But Kelly won him over. The 300-page investor document had “innumerable disclosures about the financial condition of 38 Studios. They go on and on and on about the various defects in this company. Any objective investor, not even the so-called sophisticated investors who signed the big boy letters in this case, any investor could read that 300-page PPM and say this company, 38 Studios, is kind of shaky.”

But investors also knew the state of Rhode Island was backing up the bonds. That was what they cared about. “They were concerned with the State of Rhode Island and the insurance,” Kelly said. “They invested. They made money. It didn't matter to them about 38 Studios.”

Indeed, six institutional investors testified that they were not misled and were happy with their investments, while the SEC failed to produce any who felt they'd been cheated.

“The taxpayers may have suffered, but that was not Mr. Cannava's doing,” Kelly said. “That was the political decisions of the politicians at the time, not his doing. His job was to shepherd this bond transaction through the system, and he did the best he could.”