Former Dewey & LeBoeuf executives Joel Sanders and Stephen DiCarmine appear close to settling a U.S. Securities and Exchange Commission lawsuit alleging they misled investors before the now-defunct law firm's dissolution in 2012, according to a Manhattan federal court filing on Friday.

In a letter to U.S. District Judge Valerie Caproni, SEC lawyer Howard Fischer wrote that there has been progress in settlement talks that have been ongoing since at least July.

“While the [SEC] has had some fruitful discussions with counsel for defendants DiCarmine and Sanders (and in fact may be close to a settlement with one or both of them), no resolution has yet been reached,” Fischer wrote.

Lawyers for Sanders, the former CFO of Dewey, did not immediately respond to requests for comment. A lawyer for DiCarmine, the defunct firm's former executive director, declined to comment.

Settlement negotiations in the SEC's civil case have followed Sanders' criminal conviction in May, when a jury found him guilty of scheming to defraud Dewey's lenders and investors and of conspiracy and securities fraud under New York's Martin Act. The jury cleared DiCarmine on the same charges.

The SEC case traces back to 2014, the same time a criminal case was first announced against Sanders, DiCarmine and former Dewey chairman Steven Davis, who later reached a deferred prosecution agreement in the criminal proceeding. The SEC alleges in its civil suit that the executives and others misled investors about the shaky state of Dewey's finances to help facilitate a $150 million bond placement.

Caproni issued an order in September requiring the two sides to update her on the settlement talks by Dec. 1 so the judge could determine whether to lift a stay that put the SEC case on hold while the criminal case proceeded.

On Friday, Fischer wrote that although the two sides may be close to a settlement, the SEC believes Caproni should set a hearing at which the parties could discuss a timeline for the defendants to respond to the SEC's complaint and discovery issues. Lawyers for DiCarmine and Sanders would prefer that the stay remain in effect for a longer period to give the two sides a further chance to reach a settlement.

Fischer's letter also reminded Caproni of where things stand with respect to an SEC case against Davis. A partial judgment has already been entered against Davis, but “the issue of potential monetary sanctions remains pending as to him,” Fischer wrote.

Dewey LeBoeuf

Former Dewey & LeBoeuf executives Joel Sanders and Stephen DiCarmine appear close to settling a U.S. Securities and Exchange Commission lawsuit alleging they misled investors before the now-defunct law firm's dissolution in 2012, according to a Manhattan federal court filing on Friday.

In a letter to U.S. District Judge Valerie Caproni, SEC lawyer Howard Fischer wrote that there has been progress in settlement talks that have been ongoing since at least July.

“While the [SEC] has had some fruitful discussions with counsel for defendants DiCarmine and Sanders (and in fact may be close to a settlement with one or both of them), no resolution has yet been reached,” Fischer wrote.

Lawyers for Sanders, the former CFO of Dewey, did not immediately respond to requests for comment. A lawyer for DiCarmine, the defunct firm's former executive director, declined to comment.

Settlement negotiations in the SEC's civil case have followed Sanders' criminal conviction in May, when a jury found him guilty of scheming to defraud Dewey's lenders and investors and of conspiracy and securities fraud under New York's Martin Act. The jury cleared DiCarmine on the same charges.

The SEC case traces back to 2014, the same time a criminal case was first announced against Sanders, DiCarmine and former Dewey chairman Steven Davis, who later reached a deferred prosecution agreement in the criminal proceeding. The SEC alleges in its civil suit that the executives and others misled investors about the shaky state of Dewey's finances to help facilitate a $150 million bond placement.

Caproni issued an order in September requiring the two sides to update her on the settlement talks by Dec. 1 so the judge could determine whether to lift a stay that put the SEC case on hold while the criminal case proceeded.

On Friday, Fischer wrote that although the two sides may be close to a settlement, the SEC believes Caproni should set a hearing at which the parties could discuss a timeline for the defendants to respond to the SEC's complaint and discovery issues. Lawyers for DiCarmine and Sanders would prefer that the stay remain in effect for a longer period to give the two sides a further chance to reach a settlement.

Fischer's letter also reminded Caproni of where things stand with respect to an SEC case against Davis. A partial judgment has already been entered against Davis, but “the issue of potential monetary sanctions remains pending as to him,” Fischer wrote.