Monday, June 14, 2010


Mr. Walter D. Ricciardi, of Paul, Weiss, Rifkind, Wharton & Garrison, will be lecturing at next month’s ALI-ABA Course of Study on Accountants’ Liability: Litigation and Issues in the Financial Crisis. The conference will address a variety of issues, such as the fact that new federal securities class action filings have significantly increased after the financial collapse in 2008. The ALI-ABA cited that almost half of these new filings are targeted at financial companies and accounting firms, with over 40% of those suits directly related to the subprime crisis.

Mr. Ricciardi was previously the Deputy Director of the Securities and Exchange Commission’s Division of Enforcement and District Administrator of the SEC’s Boston Office. In June 2008, he joined Paul Weiss, Rifkind, Wharton & Garrison and focuses his practice on white collar crime and regulatory defense.

In April 2010, Mr. Ricciardi spoke at the Knowledge Congress’ event on Executing Internal Investigations for Compliance Programs. The webcast primarily focused on the steps necessary to conduct successful internal audits in order to boost corporate compliance programs. Mr. Ricciardi also was a panelist for a National Association of Criminal Defense Lawyers (NACDL) last fall, entitled the Financial Fiasco: Prosecutions & Lawsuites Stemming from the Securities Market Meltdown. During this program, Mr. Ricciardi was reported as stating that “contrary to [the SEC’s] earlier culture where ‘everybody does everything,’ now the SEC has created Specialized Units.” He further noted that although in the past the SEC would only go after the entities and leave out the individuals who has been accused of wrongdoing, this will no longer be the case.

After Mr. Ricciardi spoke, Ira Sorkin, attorney for Bernard Madoff, reportedly agreed that the SEC has changed how it handles white-collar crime investigations and prosecutions. He noted that over the last fifteen years there has been an increase in inter-agency cooperation and parallel proceedings with white collar cases. Mr. Sorkin also commented on the “queen for a day” proffer agreements offered by the SEC and DOJ. He was quoted as stating that these proffers are meaningless because they do not provide much by way of client protection. Instead, Mr. Sorkin suggests that Rule 410 protections are more effective. Sorkin also commented on FINRA and its use of 82(10) proceedings which allow the organization to bring an action to revoke client licenses if clients refuse to talk to FINRA. Furthermore, the transcripts from the 82(10) hearing can be shared with the DOJ or the District Attorney and be the basis for an additional investigation. A full account and commentary of the NACDL presentation can be accessed here.

It is interesting to note that while Mr. Ricciardi was Deputy Director of the SEC’s Division of Enforcement, he led the Division through several proceedings that “significantly advanced” the SEC’s mission to protect investors. For example, a $600 million global settlement involving Prudential Securities’ registered representatives defrauding mutual funds. During his tenure as the District Administrator of the SEC’s Boston Office, Mr. Ricciardi conducted the investigation leading to fraud charges against Biopure Corporation and its then-current general counsel. He also conducted the investigation the led to fraud charges against Raymond James Financial for the Brite Business fraud.

In sum, if you are keeping a watchful eye on compliance, litigation, and regulatory issues—and you should be—the ALI-ABA conference in Boston next month will certainly be worth the price of admission.

About the Author
David Cosgrove is the managing partner of the law firm of Cosgrove Law, LLC. Mr. Cosgrove represents businesses, corporate officers and individuals facing civil, criminal, or administrative enforcement actions by government entities in areas such as securities, annuities, consumer services and products, commodities, and white collar crime. He also has a general litigation and government relations practice. Mr. Cosgrove also serves as the compliance counsel for a national financial products company and represents a national brokerage company, several investment advisors, as well as defrauded investors. Additionally, Mr. Cosgrove has served as an expert witness in various securities litigation matters.
Prior to his return to private practice in 2006, Mr. Cosgrove served as Missouri's Commissioner of Securities where he supervised attorneys, investigators and auditors investigating and prosecuting administrative, civil and criminal violations of the State's securities laws. He can be contacted by phone at (314) 563-2492 or at

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