FCPA Compliance How to Stay Off the Radar Presenters: Roel Campos, Michael Marinelli, and Neal Stephens/Bill Grauer OCTOBER 14, 2009 – PALO ALTO OCTOBER 15, 2009 – SAN DIEGO www.cooley.com The Government’s Point of View “It is the invariable habit of bureaucracies, at all times and everywhere, to assume that every citizen is a criminal." -- H.L. Mencken www.cooley.com Agenda X Causes for Concern X Recent FCPA Prosecutions X The SEC Perspective X New Developments in Enforcement X Proactive Measures for Executives X Building an Effective FCPA Compliance Program www.cooley.com 1 Why do I need to be concerned about the FCPA now? X Current economic challenges increase the level of competition in the market (and the risk that employees will be too aggressive to secure business) X DOJ/SEC prosecutions (and victories) on the rise X DOJ filed more FCPA cases in 2006-08 than it did in the previous 28 years X Number of cases increases 400% from 2000 through 2008 X 110 active investigations in 2008 (25% self-reported, 75% from other sources) X DOJ on record saying that FCPA prosecutions are a national priority to “level the playing field” for law abiding U.S. companies www.cooley.com Why do I need to be concerned about the FCPA now? (continued) X Recent cases have resulted in huge fines/penalties X Siemens paid $1.6 billion in 2008 to U.S. and German authorities X Haliburton paid $559 million in 2009 to U.S. authorities X DOJ/SEC will continue to devote additional resources to FCPA investigations given these results www.cooley.com 2 Why do I need to be concerned about the FCPA now? (continued) X Penalties can be crippling: X Individuals exposed to jail terms X Corporations exposed to huge fines X Corporations also face debarment on government contracts X Mandatory in EU X Discretionary in U.S. X Reputation hit in the market X Litigation cost of conducting internal investigation and dealing with DOJ/SEC X Exposure to civil litigation – competitors can bring a civil RICO claim asserting that the bribery caused the defendant to win foreign contracts www.cooley.com Recent FCPA Prosecutions Siemens (2008) X 4000 improper payments totaling $1.36B to officials in Asia, Africa, Europe, the Middle East and South America – impacts nearly every aspect of Siemens’ business X Investigated by both U.S. and German authorities X DOJ charges with violating both the anti-bribery and accounting provisions X DOJ focuses on systemic practice of using bribes for business development X Siemens pled guilty and agreed to pay over $1.6B in fines/penalties – the biggest penalty in history www.cooley.com 3 Recent FCPA Prosecutions (continued) X Haliburton (2009) X Improper payments related primarily to natural gas projects in Nigeria X Payments made through sham consulting agreements with two shell companies based in the UK and Japan that funneled money to Nigerian officials X Lead executive for natural gas projects pled guilty and is facing a potential 7 year sentence and owes $10.8M in restitution X Haliburton pays $559M in fines/penalties to DOJ/SEC www.cooley.com SEC Enforcement of the FCPA 4 FCPA X X Anti-bribery provision X Generally prohibits bribery of foreign government or political officials X Applies to firms operating in the U.S. or any U.S. person (officer/director, individual, employee, agent) Accounting provisions – focus of the SEC X Extends to all U.S. issuers X Books and Records X Internal Controls www.cooley.com Jurisdiction X Accounting Provisions X X Anti-bribery Provisions X X Do not require involvement by U.S. issuer, U.S. citizen or U.S. resident Acts committed by U.S. individuals or entities in furtherance of making illicit payments Use of mail or any means or instrumentality of interstate commerce not required for charging violation of either provision. www.cooley.com 5 SEC Enforcement of the FCPA X Civil injunctive and administrative proceedings X Usually investigates allegations of bribery X May find violations of accounting provisions without finding anti-bribery violations www.cooley.com SEC Perspective X Red flags X Government officials requiring use of specific intermediary or agent X Unwillingness of customer, intermediary or agent to provide information about ownership or relationships X Large payments to intermediary for limited or no substantive work X Higher than usual entertainment expenses (in government business sector) www.cooley.com 6 SEC Perspective X Red flags (cont.) X Payments for travel expenses of government officials X Business contracts or dealings with state-owned entities or newly private entities employing former government officials X Business in high risk countries www.cooley.com New Developments X Focus on individuals X 2009 FCPA actions, as of October 2009 – X Criminal charges brought against 14 executives and high-level employees X 8 individuals either found guilty or entered guilty plea X Associate Director of SEC Enforcement, Cheryl Scarboro X “[High level employees] can’t shield themselves and expect that the corporations alone will pay the price of their misconduct.” (WSJ, 8 October 2009) X Deputy Chief of DOJ, Mark Mendelsohn X “To really achieve the kind of deterrent effect we’re shooting for, you have to prosecute individuals.” (WSJ, 8 October 2009) www.cooley.com 7 New Developments X Focus on individuals (cont.) X “control person liability” X e.g. Nature’s Sunshine Products – SEC charged CEO and CFO under Section 20(a) of the Exchange Act X SEC alleged that both “failed to adequately supervise” X Historically, this theory has rarely been used in FCPA cases X Imposing liability on executives even where they are not alleged to have known of the misconduct X Nature’s Sunshine Products – FCPA liability X CSK Auto – clawbacks due to accounting restatement www.cooley.com New Developments X Uncertainties – Foreign Litigation X Business Nexus Requirement (i.e. U.S. v. Kay) – FCPA liability found where officials performed acts that effectively lowered the company’s operational costs X Current DOJ interpretation may include payments made by local counsel to foreign judicial officials X Based on U.S. v. Kay, these payments could be seen as improving the financial outcome and “bottom line”, and therefore obtaining or retaining business www.cooley.com 8 New Developments X Uncertainties – “Foreign Official” X X Sovereign Wealth Funds (SWF) – largely construed as “foreign officials” X Uncertainty remains as to how to interpret the employees of private companies supported by governments or their agents, such as SWFs? X Unintended consequence of the financial crisis – the government investments in and support of banks and companies. Companies should consider their risks and compliance needs based on the nature of the foreign counterparties/agents X KBR/Halliburton case – involved, among various allegations, illicit payments to the employees of company 49% owned by the Nigerian government. www.cooley.com New Developments X International Cooperation X SEC has negotiated approximately 50 bi-lateral or multi-lateral Memoranda of Understanding with foreign governments X “Eurojustice” X EU countries sharing information about how criminal behavior is investigated and prosecuted in each jurisdiction X e.g. Siemens AG -- Cooperation with Greek and Swiss authorities helped German officials X US$569 million fine by the Munich Prosecutors’ Office www.cooley.com 9 Proactive Measures X Disclosure, or “self-reporting” X Companies are developing an increasing sensitivity to FCPA issues and compliance and self-reporting to U.S. authorities X X Seeking guidance from DOJ prior to transaction Companies who self-report fare better with SEC/DOJ investigations and face significantly reduced sanctions X e.g. Siemens AG – US$1.6 billion in total government fines X Exceedingly cooperative with U.S. and foreign authorities www.cooley.com Proactive Measures X “Investigations” X Ensure sufficient due diligence X Prior to M&A X Business with counterparties X Focus on Books and Records, as well as internal controls X Regional SEC Director Robert Leach emphasized that this is his first area of concern in investigations (July 10, 2009) X Serious allegations? Retain outside counsel X Increases legitimacy of report and deters government fact investigations www.cooley.com 10 Proactive Measures X Engagement with agents X Agents do not have to be per se employees to implicate executives in FCPA liability X Enter only into formal, written agreements X Ensure that management has knowledge of agent’s activities X “Control person” liability – Nature’s Sunshine Products CEO/CFO X Ensure sufficient managerial control over agents’ activities X Siemens AG and KBR executives -- FCPA liability even though agent’s made illicit payments www.cooley.com Proactive Measures X Engagement with subsidiaries X Section 13(b)(6) – subsidiaries not wholly owned X With <50% voting power, the issuer is required only to “proceed in good faith to use its influence, to the extent reasonable…to cause…[the firm] to devise and maintain a system of internal accounting controls…” X However, the SEC has taken action against issuers with <50% voting power. See SEC v. Bellsouth Corp., Litigation Release No. 17310 (January 15, 2002). X KBR’s use of indirect control through subsidiaries only bolstered the SEC/DOJ cases www.cooley.com 11 Building an Effective FCPA Compliance Program The Voice of Experience “Once you pay the first bribe, every crooked S.O.B. in the country will get in line, and you’ll have to pay every one of them. If you say no the first time, and keep saying no, they will eventually get the message. Will you lose some business? Sure. But in the long run it won’t cost as much as paying off every crooked S.O.B. in the country.” Retired Chairman and CEO U.S. Oil and Gas Exploration Company www.cooley.com 12 Elements of An Effective Compliance Program X Management involvement and support X Clearly communicated standards and procedures X Training for management and employees X Diligence in engaging agents and distributors X Procedures for assessing business information from the compliance perspective X Audit and review of operations X FCPA language in agreements X Procedures for internal reporting and investigation of possible violations www.cooley.com Management Involvement X Management involvement and support is critical X Senior manager must be responsible for compliance program X Aggravating factors cited in Siemens X Management was involved in or aware of and did not correct the ongoing practice X Corporate culture tolerated and rewarded bribery X Compliance office understaffed X Convicted violators given full retirement benefits www.cooley.com 13 Clearly Communicated Standards and Policies X General policy statements are not enough X Generic procedures are unlikely to work X Compliance program should clearly explain standards of conduct and procedures to be followed X X In writing X In language that employees can understand Procedures should be tailored to fit the company’s business X Based on an objective assessment of the risks faced by company X Based on an objective assessment of the resources available to the company www.cooley.com Train Employees and Management From the Baker Hughes Complaint: “The District Manager…determined on his own that the FCPA would not be violated by making such a payment because ‘all companies are doing the same in Nigeria.’” X Confusion about the FCPA is common X Extensive training for those directly involved in overseas sales X X Sales and marketing X Finance Awareness training for others, including management www.cooley.com 14 Diligence in Engaging Business Partners From the Baker Hughes Complaint “The company conducted no due diligence with respect to the agent until three years after the agent had first been engaged. When conducted, the due diligence revealed several “red flags”… Despite such knowledge, the company continued to retain and pay commissions to the agent.” www.cooley.com Diligence in Engaging Business Partners X Establish in advance objective criteria to be met X Benchmark fees and commissions against industry norms X Use public sources and government services X Document the selection process X Include compliance language in agreements X Act on the information obtained X Questions that have to be answered: X Who are we paying ? X What are we paying that person to do ? www.cooley.com 15 Evaluating Transactions and Relationships X Sales organization should not be making compliance decisions X Assess business information from the compliance perspective X Determine in advance what actions will require advance approval X Engaging agents and other third-party representatives X Sponsoring travel, trips or training for customers or prospective customers X Expenses over a certain limit X Gifts to government officials X Political or charitable contributions www.cooley.com Audits and Reviews From the Baker Hughes Complaint “Baker Hughes' legal department otherwise failed to follow up with Fearnley. No one else at the Company verified whether or not the revised FCPA procedures had been followed.” X X Audit and review substantive compliance X Financial controls X Suspect payments Audit and review procedural compliance, including X Due diligence X Training X Use of FCPA language in contracts www.cooley.com 16 Prepare for Disaster X Procedures for internal reporting of possible violations X Clear chain of reporting the problem X Clear chain of responsibility for responding to the problem X X Include: X Management X Legal X Finance Consequences for violations (and rewards for compliance efforts) www.cooley.com Recurring Themes X Late arriving agents X Agents with no experience in the industry X Agency agreements are backdated X Customer demands a bribe, often late in the sales cycle X Training trips X “Customary” or small gifts X Violations rarely occur in isolation X Exceptions to the company’s policy www.cooley.com 17 Outline of Basic FCPA Provisions and Concepts FCPA Background X FCPA emerged from the Watergate scandal and subsequent investigations X Government discovered that over 300 issuers had set up “slush funds” X SEC prosecuted issuers’ “questionable payments” based on Section 10(b) www.cooley.com 18 Accounting Provisions X Books and Records X Applies to all U.S. issuers X Strengthened by Sarbanes-Oxley, Section 404 X Broader than anti-bribery provision X Extends to all payments and transactions www.cooley.com Accounting Provisions X Books and Records (cont.) X Materiality and scienter not required; only “in reasonable detail” X X “Reasonable” standard “would satisfy prudent officials in the conduct of their own affairs” Objectives of the provision X (a) acts of misrepresentation, etc., are unlawful X (b) transactions should be properly reflected X As to permit GAAP financial statement preparation X According to accepted methods of reporting www.cooley.com 19 Accounting Provisions X Books and Records (cont.) X SEC Rules: X Rule 13(b)2-1 – No person shall directly or indirectly, falsify or cause to be falsified, any book, record or account…” X Rule 13(b)2-2 – “No director or officer of any issuer shall, directly or indirectly…make any false statement” to any auditor www.cooley.com Accounting Provisions X Internal Controls X Bolstered by Sarbanes-Oxley Section 404 X The SEC does not prescribe any specific method X Objective: X Ensure that issuers adopt accepted methods of recording, protecting assets and conforming transactions to management’s authorization X Ensure proper financial reporting and corporate accountability www.cooley.com 20 Accounting Provisions X Internal Controls (cont.) X SEC Rule – Section 13(b)(5) X “No person shall knowingly circumvent or knowingly fail to implement a system of internal accounting controls or knowingly falsify any book, record or account…” www.cooley.com Elements of the Anti-bribery Provision X Any U.S. person or entity X X Jurisdiction means X X Made use of mails or any means or instrumentality of interstate commerce Corruptly X X X “issuers,” “domestic concerns,” officers, directors, and agents Quid pro quo Intent to influence Authorized, offered, or paid anything of value www.cooley.com 21 Elements of the Anti-bribery Provision X To a foreign official X For the purpose of: X X X X Payment made in furtherance of obtaining or retaining business X X X (a) influencing any act or decision of such foreign official (b) inducing violation of lawful duty (c) securing improper advantage Expansive view taken by DOJ in U.S. v. Kay Includes foreign judges – attorneys should ensure that local counsel does not make payments to judicial officials in the course of litigation, despite its perception as “standard business practice” Acted willfully www.cooley.com Definitions X X “Foreign Official” X Any officer or employee of a foreign government or governmental agency X Any person acting in an official capacity on behalf of a government X Officers and employees of government-owned entities “Knowing” Payments X Positive knowledge X Awareness of a high probability that circumstances exist X Willful blindness X Turning a “blind eye” to problems X Deliberately cutting off the flow of information the company would normally obtain www.cooley.com 22 Exception X Facilitating (“Grease”) Payments X Payments made to facilitate routine government action do not violate the FCPA X Examples X X Phone service X Trash collection Payments for the purposes of obtaining new business are not grease payments www.cooley.com Affirmative Defenses X X Lawful Payments X Permits payments that are lawful under the “written laws and regulations” of the official’s country X The fact that bribes may be common place (customary payments) is not a defense Bona fide and reasonable expenses X Incurred by or paid on behalf of the official if the payments are directly related to: X Promotion or explanation of products or services; or, X Execution of a contract with the foreign government www.cooley.com 23 ROEL CAMPOS PARTNER IN CHARGE OFFICE: PRACTICES: Washington, DC 777 6th Street, NW Suite 1100 Washington, DC 20001 Commercial Litigation National Security Securities Litigation T: 202/842-7825 F: 202/842-7899 E: [email protected] Roel Campos is the partner in charge of Cooley Godward Kronish's Washington, DC office. He is a member of the Litigation Department and joined the firm in 2007. Mr. Campos' practice consists of advising corporate management teams and boards of directors with respect to enforcement, internal investigations, prosecutions, securities and international regulation, and corporate governance. Mr. Campos is a highly sought after orator and regularly serves as lead speaker for prestigious legal and business conferences around the globe. Mr. Campos was recently named to President Barack Obama's economic advisory board and to his transition team. Prior to joining Cooley, Mr. Campos was a Commissioner of the Securities and Exchange Commission. He was sworn in as a Commissioner of the SEC on August 22, 2002. On June 2, 2005, he was nominated by President George W. Bush for a second term, and was confirmed by the United States Senate on July 29, 2005. Mr. Campos served for four years as the Commission's liaison to the international regulatory community. During his time at the SEC, Commissioner Campos became one of the best known regulators in the world. As the Vice Chair of the Technical Committee of the International Organization of Securities Commissioners, he developed productive relationships with securities regulators in Europe, Asia, Australia, and Latin America. Mr. Campos also facilitated the development of international auditing and accounting standards through his work as Chair of the Monitoring Group, which oversees the setting of International Standards of Audit. Mr. Campos has presided over hundreds of complex enforcement cases, applying the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Company Act of 1940, and the Investment Advisers Act of 1940. He also has extensively participated in the crafting and adoption of many of the SEC's recent major regulatory initiatives, including: the Sarbanes-Oxley Act, mutual fund governance and compliance rules, and the new National Market System. In addition, Mr. Campos has spoken and published extensively in the areas of the implementation of the Sarbanes-Oxley Act, corporate governance, director liability, corporate penalties, international accounting and auditing standards, Securities Act reform, SRO and market reform, retirement investment protection, research analyst conflicts, and the internationalization of the securities markets. Prior to being nominated to the Commission, Mr. Campos was one of two principal owner-executives of El Dorado Communications, a radio broadcasting company, at its headquarters in Houston, Texas. However, he began his career as an officer in the U.S. Air Force. After attending Harvard Law School, he worked in Los Angeles, California for major law firms as a corporate transactions/securities lawyer and litigator. Beginning in 1985, Mr. Campos served as a federal prosecutor for five years in the U.S. Attorney's Office in Los Angeles. He successfully prosecuted complex and violent narcotics cartels and, in a celebrated trial, convicted defendants for the kidnapping and murder of a DEA Agent. He also investigated and prosecuted major government contractors for fraudulent conduct. He then returned to private law practice for several years before co-founding El Dorado Communications, Inc. Mr. Campos has been recognized as one of the top Latino leaders in America. He is a founding member of the New America Alliance, a Latino initiative for raising awareness of investment opportunities in the Latino sector in the United States. BILL GRAUER PARTNER OFFICE: PRACTICES: San Diego 4401 Eastgate Mall San Diego, California 92121-1909 Commercial Class Action Litigation Commercial Litigation National Security Securities Litigation White Collar & Regulatory Defense T: 858/550-6050 F: 858/550-6420 E: [email protected] Bill Grauer is a partner in the Cooley Godward Kronish Litigation department. He joined the Firm in 1998, is resident in Firm's San Diego office, and is the Co-Chair of the Firm's National Securities Litigation practice. Mr. Grauer was recently selected by the Los Angeles Daily Journal as one of the top 100 lawyers in the state of California. Mr. Grauer specializes in securities and health care litigations, fraud litigations, government and regulatory investigations, internal corporate investigations, and complex commercial litigation including technology cases. He is an experienced trial and appellate lawyer and was previously given the Outstanding Trial Lawyer Award by the Trial Lawyers Association. Mr. Grauer is one of the very few lawyers in San Diego who has successfully argued in the United States Supreme Court, obtaining a unanimous victory. See Oral Argument. Prior to joining the Firm, Mr. Grauer was a partner at Gray Cary Ware and Friedenrich. Prior to that, he was appointed by the Attorney General of the United States to serve as an Assistant United States Attorney handling Special Fraud Prosecutions in the U.S. District Court, Southern District of California. As an Assistant United States Attorney, Mr. Grauer was given special achievement awards by the Attorney General of the United States, the United States Postal Inspection Service, the Federal Bureau of Investigation and the United States Secret Service. In 2005, 2006, 2007, 2008 and 2009, Mr. Grauer was named to the Best Lawyers in America in the categories of Commercial Litigation, Derivatives Law and Securities Law. In 2007, 2008 and 2009, Mr. Grauer was named to the Southern California Super Lawyers - San Diego in the categories of (1) Top 50 Lawyers, and (2) Business Litigation. In 2006, 2007 and 2009, he was named by his peers as one of the "Top San Diego County Attorneys" in the category of Corporate Litigation, as published by the San Diego Daily Transcript. He was also named in 2008-09 by Lawdragon as one of "The Nation's Top Securities Litigators." Mr. Grauer graduated from the Cornell Law School in 1974 as the Articles Editor of the Law Review and was elected to Order of the Coif. In 1971 he graduated from Cornell University with Honors in Government, magna cum laude, and was awarded a degree With Distinction. Mr. Grauer has been very active in Bar Association activities: Chair of the Federal Court Discipline Committee for the U.S. District Court, Southern District of California, on appointment by the Southern District Federal Judges, 1990-present American Bar Association House of Delegates, 2008-2010 term Lawyer Representative, 9th Circuit Judicial Conference, 2007-2010 term Co-Chair IPO Litigation Subcommittee of the ABA Section of Litigation, 2005 - present Former Chairman of the Ethics Committee of the San Diego County Bar Association, two terms Former Chairman of the Federal Court Committee of the San Diego County Bar Association Board of Directors of the Association of Business Trial Lawyers, 1998-1999 Mr. Grauer is a member of the State Bar of California and New York State Bar Association, the Bar of the United States Supreme Court, the U.S. Court of Appeals, Second and Ninth Circuits and numerous Federal District Courts. MICHAEL MARINELLI PARTNER OFFICE: PRACTICES: Washington, DC 777 6th Street, NW Suite 1100 Washington, DC 20001 China & Asia Europe & U.K. International Trade Life Sciences National Security White Collar & Regulatory Defense T: 202/842-7830 F: 202/842-7899 E: [email protected] Michael X. Marinelli is a partner in the International Trade practice group and a member of the Cooley Godward Kronish Business department. He joined the Firm in 2005 and is resident in the Washington D.C. office. Mr. Marinelli concentrates his practice in federal regulation of international trade, both outbound (export compliance) and inbound (customs). Mr. Marinelli's practice also encompasses compliance with the Foreign Corrupt Practices Act and USA Patriot Act. He has experience in counseling technology, telecommunications and life sciences companies in the area of export and import transactions, the development of trade compliance programs and representing companies involved in government audits, investigations and enforcement proceedings. Prior to joining Cooley, Mr. Marinelli was a partner at Gray Cary Ware & Freidenrich. Before that, he practiced with the firm of Baker Botts for over ten years where he made partner. Mr. Marinelli received his J.D. from Catholic University Columbus School of Law where he served as Editor-in-Chief of the Catholic University Law Review. He received an A.B. from Brown University in 1982. Mr. Marinelli is admitted to practice before the U.S. Court of Appeals for the Federal Circuit and U.S. Court of International Trade and is a member of the District of Columbia Bar. NEAL STEPHENS PARTNER OFFICE: PRACTICES: Palo Alto—Five Palo Alto Square Five Palo Alto Square 3000 El Camino Real Palo Alto, California 94306-2155 Commercial Class Action Litigation Commercial Litigation Securities Litigation White Collar & Regulatory Defense T: 650/843-5442 F: 650/857-0663 E: [email protected] Neal J. Stephens is a partner in the Litigation department at Cooley Godward Kronish, and is resident in the Palo Alto office. Mr. Stephens is a trial lawyer who specializes in white collar criminal defense, internal investigations and complex civil litigation. He has handled more than 30 trials in federal and state courts during his career. Mr. Stephens has represented officers and directors in investigations by various U.S. Attorney's Offices and the SEC related to accounting fraud, insider trading, RICO, antitrust violations and numerous other alleged criminal violations. Mr. Stephens has also conducted internal corporate investigations for Audit or Special Committees of public companies related to accounting fraud allegations, including several investigations in Asia. On civil matters, Mr. Stephens has represented clients in a wide variety of complex civil litigation, including antitrust, securities, unfair competition and class action litigation. Representative matters include: Criminal/Regulatory Matters: Trial counsel for Kent Roberts, former general counsel of McAfee, Inc., in stock option backdating cases brought by the DOJ and SEC. Mr. Roberts defeated both the DOJ (at trial) and the SEC (who voluntarily dismissed prior to trial), making him the only executive in a stock option backdating case to defeat either the DOJ or the SEC. Represented a software company in a SEC enforcement action regarding accounting fraud. Represented a microchip company in a trade secrets investigation by the DOJ. Represented a biotech company in an insider trading investigation by the SEC. Represented a telecommunications company in an insider trading investigation by the SEC. Represented a senior executive of a networking company in parallel investigations conducted by the DOJ and SEC regarding alleged accounting fraud. Represented executives in a criminal antitrust investigation of the DRAM industry. Represented executives of a telecommunications company in a fraud investigation of a hedge fund conducted by the DOJ and SEC. Represented a director of a software company in a criminal insider trading investigation. Internal Investigations: Represented the Audit Committee of a data storage company in an internal investigation conducted throughout Asia related to potential revenue recognition fraud. Represented the Audit Committee of a telecommunications company in an internal investigation in Taiwan and China related to allegations of revenue recognition fraud. Represented the Audit Committee of a medical device company related to allegations of false advertising and accounting fraud. Represented the Audit Committee of a software company in an internal investigation related to FCPA and embezzlement allegations in Asia. Represented the Audit Committee of a software company in an internal investigation related to potential revenue recognition fraud. Represented the Audit Committee of a flat panel display equipment supplier in an internal investigation related to potential accounting fraud in Asia. Represented the Special Committee of the Board of Trustees at St. Mary's College in an internal investigation related to a failed pledge exceeding $100M. Complex Civil Litigation: Represented Covidien (formerly Tyco Healthcare) on several antitrust cases alleging violations of Sections I and II of the Sherman Act, false advertising under the Lanham Act and unfair competition under various state laws. Defended cases in federal courts in Texarkana, Los Angeles, Boston and St. Louis. Represented United States Gypsum Company in several product defect cases, including an industry wide national class action related to alleged product defects where plaintiffs asserted violations of California's Unfair Business Practices Act, Section 17200 and California's Consumer Legal Remedies Act ("CLRA"). Represented Siebel Systems in shareholder litigation related to a potential merger. Represented several venture capital firms in FOIA litigation related to the disclosure of financial information. Represented a director of a medical device company in derivative shareholder litigation. Prior to joining Cooley in 2000, Mr. Stephens was an Assistant United States Attorney in Miami, Florida where he served as Chief of the Major Narcotics Section. He also served as Regional Coordinator of the Organized Crime Drug Enforcement Task Force for the Florida/Caribbean Region. Mr. Stephens ran investigations that resulted in the extradition and prosecution of high-level Colombian traffickers, including relatives and associates of Pablo Escobar, the former head of the Medellin cartel. He received national awards from both the Justice Department and DEA for his work on international wiretap prosecutions. Mr. Stephens also taught courses regarding trial advocacy, wiretaps and electronic surveillance, and the prosecution of criminal organizations to other federal prosecutors and agents. Mr. Stephens received his J.D. in 1990 from Harvard Law School and, after graduating, served as a law clerk to the Honorable Alicemarie H. Stotler, United States District Judge, Central District of California. He attended Stanford University on a soccer scholarship, graduating with distinction in 1987. Mr. Stephens has been recognized as a Super Lawyer in Northern California since 2006. He is a member of the American Bar Association and has served as Co-Chair of its Computer and Internet Litigation Section. Mr. Stephens is also a member of the National Institute for Trial Advocacy ("NITA") and has taught trial advocacy at several NITA seminars. Mr. Stephens is also a member of the State Bar of California and the Santa Clara County Bar Association and handles pro bono matters with the Northern California Innocence Project.
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