We are accountants’ lawyers. Bingham’s Accountant Defense Practice Group represents the largest national accounting firms and their personnel in matters touching upon virtually every aspect of the accounting industry, and we have done so for decades.
In an environment of heightened scrutiny of corporate financial reporting, our lawyers have the experience to defend accounting firms zealously in the litigation or regulatory proceedings that often follow the disclosure of corporate malfeasance, undetected during the review or audit process. We are proficient in federal and state securities and other laws applicable to such litigation or proceedings, and we have a thorough comprehension of generally accepted accounting principles (GAAP) and generally accepted auditing standards (GAAS).
We have deep substantive knowledge of accounting issues and the organizational needs of large accounting firms, and we understand the need for firmwide coordination in responding to key issues that can arise across multiple jurisdictions. We appreciate the need to leverage firm resources — brief banks, institutional knowledge and other opportunities — to control costs. We know that you need to hear about developments quickly, so that your instructions can be executed effectively.
Federal and State Securities Litigation
Our litigators have extensive experience representing accounting firms in individual and class actions brought by clients and investors. We have successfully defended accounting firms in suits alleging violations of the Securities Act of 1933, the Securities Exchange Act of 1934 and state securities laws, as well as in cases with causes of action for fraud, breach of contract, negligent misrepresentation, breach of fiduciary duty, and secondary liability for aiding and abetting or conspiracy.
The environment for accountants has become increasingly challenging during the current business cycle, with the passage of the Sarbanes-Oxley Act of 2002 and heightened scrutiny by accounting regulatory bodies. Our group includes lawyer-CPAs and other lawyers with extensive in-depth knowledge of GAAP, GAAS, Section 10A reporting obligations and accounting rules and pronouncements by the Securities and Exchange Commission and the Public Company Accounting Oversight Board. We have first-hand knowledge of the broad investigative and disciplinary authority over registered public accounting firms and persons associated with such firms exercised by the PCAOB under Section 105 of the Sarbanes-Oxley Act of 2002.
When accounting firms or their personnel are the targets of regulatory investigations, our lawyers have the experience to assist in navigating the complex regulatory landscape, to negotiate amicable resolutions with multiple regulatory bodies and, if need be, to respond forcefully to investigatory tactics and handle concurrent enforcement proceedings. We have represented accounting firms and individuals in investigations and enforcement proceedings by the SEC, the PCAOB, United States Attorneys’ Offices, several state boards of accountancy and other state regulatory bodies. We have represented both accounting firms and individuals in connection with investigations conducted by the AICPA’s Quality Control Investigation Committee and the AICPA’s Ethics Committee.
We maintain a leading securities enforcement practice. Our experience dealing with government regulators and investigations enables us to vigorously defend accountants who may be targeted by the SEC, PCAOB or other regulatory bodies and handle multijurisdictional matters and parallel proceedings. We have appeared before the PCAOB and know its staff, which includes a number of SEC veterans in senior positions. We represented a Big Four firm in one of the first PCAOB enforcement actions. We represent accounting firms, their partners and their employees in connection with Wells Notices, handling responses from informal negotiations through presentations to SEC staff and formal submissions.
Our partners include former SEC senior officials who closely monitor SEC developments in real time. We know the staff, and we know what is important to them. When we speak with the staff, we know the difference between arguments that are non-starters and those that address real SEC concerns. We have a leadership position in the SEC defense bar and regularly work with senior practitioners at other firms on major matters. Our lawyers have served in key roles at the SEC, including an assistant director in the Enforcement Division and an SEC assistant general counsel, a chief of enforcement in the SEC’s San Francisco office and enforcement branch chiefs in the D.C. and Denver offices. Other Bingham lawyers have served as branch chiefs, senior counsel or as staff attorneys in Enforcement and other SEC divisions; one of our partners in a former director of enforcement at the Commodity Futures Trading Commission.
We also have one of the foremost national practices in dealing with state securities regulators. Partners have held key roles in state regulatory agencies or organizations and include a former president and a former executive director of NASAA, as well as the former chief securities regulators of Massachusetts and Maine. For state attorney general issues, we work with our affiliate Bingham Consulting, which includes former state attorneys general and DOJ alumni. Our London team includes two former heads of departments (Enforcement and Forensic Investigations) from the Financial Services Authority, making us one of the leading securities regulatory firms in the U.K.
We have the sensitivity, industry knowledge and regulatory and negotiating experience that can be useful to achieve favorable outcomes and avoid additional sanctions.
To effectively defend an accounting firm charged with accounting or auditing deficiencies or tax malpractice, a lawyer must understand not only the applicable law, but also the language of accounting and the standards that guide the accounting industry. The lawyers in our Accountant Defense Practice Group have the knowledge of GAAP and GAAS and tax law needed to assist our clients sued for malpractice or professional negligence.
We are representing (or have represented) numerous parties in matters relating to everything from stock options to subprime to tax strategies. We represent accounting firms, individuals and public companies in connection with SEC and grand jury investigations, derivative and class action lawsuits.
Sensitive Third-party Depositions and Document Productions
Responding to discovery requests from regulatory investigators or parties to litigation can present unique challenges. Our lawyers represent clients in assessing the sensitivity of the requests and responding to or managing formal and informal discovery requests by government agencies, regulatory bodies, bankruptcy trustees and private litigants, including subpoenas or other requests for documents and deposition or trial testimony.
When production is necessary, we can help meet the challenges of reviewing and producing email and other digital information. Our lawyers regularly create and negotiate economical and effective strategies to manage the discovery of electronic information in a particular litigation or investigation. Colleagues in our Electronic Document Retention and Discovery Practice are among the world’s thought leaders on these topics. Bingham is a founding sponsor of the Sedona Conference’s Working Group on International Electronic Information Management, Discovery and Disclosure.