Shannon Sprinkle and Matt Gass secured a dismissal for their law firm client in Fulton Superior Court on April 12, 2016.  The Plaintiff had filed a Complaint alleging wrongful foreclosure activities and RICO claims.  Shannon and Matt moved to dismiss the claim after Plaintiff and his attorney failed to participate in discovery efforts, which would have demonstrated the law firm had no liability.  The Fulton County Superior Court Judge agreed that dismissal was a proper sanction and dismissed the case with prejudice.

For informational purposes only. Past success does not indicate the likelihood of success in future cases.

Joe Kingma, Billy Newcomb and Matt Gass won a defense verdict in a seven day jury trial in March of 2016. Plaintiff had spent two million dollars prosecuting the defendant  law firm for defamation. Plaintiff was represented by a senior litigation partner at a large international law firm, as well as a recently retired partner from a large regional firm who was a commercial defamation expert.

For informational purposes only. Past success does not indicate the likelihood of success in future cases.

Joe Kingma and the Accounting Malpractice Defense Team will present a Professional Liability Seminar for Accountants. Professional Liability Seminar for Accountants Buckhead Club, May 19, 1:30 p.m. – 5:30 p.m.

Commercial Litigation Blog Posting by Matt Gass. On May 31, 2017, Former SEC Chair, Mary Jo White and former SEC Director of Enforcement, Andrew Ceresney presented a retrospective on recent enforcement trends and their insights on where the SEC might be heading. Here are a few takeaways: 1.   SEC enforcement actions are on the rise. From 2013 through 2016, 2,850 enforcement actions were filed. Judgments and orders over this period totaled more than $13.8 Billion. The use of big data contributed to the enforcement division’s increase in activity. 2.   The number of enforcement actions involving accounting firms and auditors is also seeing an upward trend. From 2013 through 2014, the SEC brought 37 Rule 102(e) proceedings against accountants for improper professional conduct. That number rose to 76 proceedings from 2015 to 2016.  The alleged improper conduct in these proceedings arose from claims of audit failure or independence violations. The SEC sees auditors as gatekeepers and partners in protecting investors and the integrity of the markets. 3.   The SEC’s numbers show a steady increase in financial reporting cases since 2013. From 2013-2014, 53 financial reporting cases were filed and 128 parties were charged. From 2015-2016, those numbers increased to 114 financial reporting cases and 191 parties charged. Despite the increase in cases, the SEC hasn’t uncovered any massive fraud cases on the level of Enron and WorldCom. Ms. White and Mr. Ceresney attribute this to improved financial reporting and internal controls promoted by Sarbanes Oxley.  The SEC would likely reconcile the touted effectiveness of Sarbanes Oxley with the increase in enforcement actions by arguing that regulations have deterred major crimes, allowing the Commission to focus on enforcing other violations. 4.   We can expect to see some changes with the new leadership. The new chair, Jay Clayton, appears focused on capital formation. Consistent with the overall focus on reducing regulation, Chair Clayton has expressed a desire to reduce barriers to going public. This may lead to an increase in enforcement activity around initial public offerings. Please click here for more information on our Commercial Litigation Blog.

Joe Kingma and the Accounting Malpractice Defense Team presented Risk Management for Audit and Accounting Firms at The Buckhead Club on May 19. Five Takeaways from the Carlock Copeland & Stair Accounting Risk Management Program 1. The Panama Papers, and Big Data in general, demonstrate the risk posed for accountants when clients hide or launder money offshore. An international consortium of major news sources is actively soliciting more leaks and tax officials from 28 countries met in April to plan a joint strategy to mine the Panama Papers for gold. High profile individuals whose names appear in the Papers searchable, online data base include: Lionel Messi, Jackie Chan, Simon Cowell, David Geffen, Pedro Almodovar, Nick Faldo, and Emma Watson. The database lists many U.S. CPA firms and diagrams their relation to various suspect transactions. Governments from Russia to Britain to Argentina have been rocked by the disclosures. Don’t get your firm's name added to the list and avoid overly aggressive strategies. Protect your own files from those who might like to steal your clients’ confidential information. 2. Professional judgment is what you get paid for, but can also be what you get sued for. Audit engagements in particular require lots of judgment calls. Make sure your firm’s work reflects good judgment and that those who make the judgment calls are properly trained and professionally skeptical. If you have young auditors in the field without onsite partner supervision, talk through the tough issues with them in advance. Do what you can to make your firm’s judgment solid and defensible. 3. Read your insurance policies. Policy provisions may be negotiable and you may gain value in ways beyond premium reductions. Be very accurate when filling out your application and compare it to your website. Submitting a neat and accurate application can save you real money. Price should not be your only consideration and you should check to see which carriers treat their clients well. Insurance coverage remains very reasonably priced and cyber coverage is a great deal. 4. Jurors hold outside accountants to high standards when a client suffers from internal fraud. You must keep your eyes and ears wide open even if you are just doing a tax return or a compilation. Take another look at your engagement letters to make sure you have included all the damage limitations and disclaimers the laws allows and avoid engagements where the client’s lack of internal controls creates too much risk. 5. Accountants are getting sued for defamation even when they make statements in good faith and in the course of their clients' engagements. Sometimes clients try to use your staff to say bad things about their employees. Don’t let your firm get sued for defamation that may not be covered by insurance.