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SEC v. Obus: Insider Trading and Taking the SEC to Trial 2014


Speaker(s): Joel M. Cohen, Mary Kay Dunning
Recorded on: Jul. 29, 2014
PLI Program #: 60320

Joel M. Cohen, a trial lawyer and former federal prosecutor, has led or participated in 24 civil and criminal trials in federal and state courts. He is equally comfortable leading confidential investigations, managing crises, or advocating in court proceedings. His experience includes all aspects of FCPA/anticorruption issues, insider trading, securities and financial institution litigation, class actions, sanctions, money laundering and asset recovery, with a particular focus on international disputes and discovery. While in government service, he was the prosecutor of the so-called “Wolf of Wall Street,” was the first U.S. Legal Advisor to the French Ministry to Justice and was an advisor to the OECD in connection with its anti-corruption convention. Mr. Cohen has achieved significant victories pretrial and at trial in many high-profile matters, including:

  • Winning a jury trial in the closely-watched Securities and Exchange Commission v. Obus insider trading matter on behalf of Wynnefield Capital and its chief portfolio manager after a twelve-year battle with the SEC.
  • Obtaining summary judgment for Citi in a class action seeking more than $13 billion in damages for its alleged role in the Parmalat collapse.
  • Winning a jury trial for AllianceBernstein in which the Florida state pension fund attempted to recover $3.2 billion in losses sustained in Enron and other stocks, and successfully defended the same client in other significant Enron-related litigations, one of which resulted in an award of attorney’s fees and costs for his client.

His recent engagements include:

  • Represented senior management and employees of a European bank in a large U.S. economic sanctions investigation.
  • Acted as independent examiner for several Swiss banks in connection with the DOJ’s “Tax Non-Prosecution Program.”
  • SEC v. Obus: Achieved trial victory and exoneration for Nelson Obus and Wynnefield Capital, a prominent hedge fund, in one of the longest fought insider trading cases in history.
  • Abu Dabi Commercial Bank v. Moody’s et al: Successfully defended Moody’s in two matters concerning their ratings of structured investments.
  • North Carolina Utilities Commission/Duke Energy: Represented Duke Energy legacy board of director members in connection with outstanding derivative and class action litigations and a resolved regulatory matter arising from the Duke-Progress corporate merger.
  • Athale v. Sinotech: Successfully defended UBS, Citi and Lazard in a class action (and related SEC inquiry) alleging violation of federal securities laws in the underwriting of the $165 million IPO for SinoTech, a Chinese issuer delisted from NASDAQ following allegations that SinoTech was a shell operation.
  • SEC v. Allianz SE: Obtained a rare declination to prosecute from the Department of Justice and highly favorable SEC settlement on a cease-and-desist bases, in which both agencies were convinced not to proceed on an aggressive “private equity liability” theory relating to FCPA-related issues.
  • Expro: Represented a major oil and gas service company, involving reviews in more than a dozen countries, on five continents, resulting in no charges brought anywhere globally.
  • Represented several private equity and investment management funds in connection with SEC and Department of Justice FCPA-related investigations.
  • United States v. Alliance One: Acted as monitor counsel for AllianceOne in connection with a three year DOJ and SEC FCPA-related monitorship.
  • Represented several Fortune 100 companies in global regulatory investigations relating to corporate fraud, corruption/FCPA issues, sanctions issues, and insider trading concerns.
  • Represented a major accounting firm, convincing the SEC not to bring charges for alleged violations of the auditor independence rules.
  • Represented a Wall Street general counsel, convincing the SEC to decline to bring insider trading charges.
  • SEC v. Stoker: Represented the former head of CDO trading at a top global bank in connection with several related criminal and regulatory and civil litigations in which no charges were brought against client.
  • Represented multiple financial institutions in designing crisis management and global anticorruption programs.
  • Represented many audit and special committees of public companies and private company boards of directors in connection with allegations of wrongdoing.
  • Represented many tobacco and firearms producers in product liability actions.

Mr. Cohen is committed to pro bono work. He serves on the board of or acts as outside counsel to several prominent nonprofit entities, including New York Lawyers for the Public Interest, Lawyers Without Borders, and Jericho Project. He successfully led a team of Gibson Dunn attorneys in representing all plaintiffs in a high-profile immigration civil rights case (Barrera v. Boughton) in Connecticut federal court, which resulted in the largest settlement in history for such claims, for which the Firm has been awarded the National Legal Aid & Defender Association’s 2010 Beacon of Justice Award, and The New York Times noted the accomplishment in an editorial, and his team received the National Law Journal’s Hot Pro Bono 2012 designation.

Mr. Cohen previously was Head of U.S. Litigation at Clifford Chance, where he practiced from 2004 to 2009. From 1999 to 2004, he practiced with Greenberg Traurig. From 1992 to 1999, he served as Assistant United States Attorney in the Eastern District of New York, supervising the Business/Securities Fraud Unit, where he received numerous awards from the Department of Justice and law enforcement agencies. Mr. Cohen was the prosecutor of Jordan Belfort and Stratton Oakmont, which is the focus of “The Wolf of Wall Street” film by Martin Scorsese. He was an adviser to OECD in connection with the effort to prohibit corruption in international transactions and was the first Department of Justice legal liaison advisor to the French Ministry of Justice. Mr. Cohen has published several articles on securities, international and white collar litigation issues and has been a presenter and chair at many professional conferences. He is also a frequent commentator in print and television media. Mr. Cohen has been named a leading white collar criminal defense attorney by The Best Lawyers in America©, a “Litigation Star” by Benchmark Litigation, a “Super Lawyer” in Criminal Litigation, and his work is noted by Legal 500 in the areas of white collar criminal defense and securities litigation, and in Chambers in the white collar area. In addition, The Am Law Litigation Daily named Mr. Cohen as one of its Litigators of the Week after winning a jury defense verdict in an insider trading case on behalf of Nelson Obus, general partner of Wynnefield Capital.

Mr. Cohen received his bachelor’s degree from Middlebury College, his master’s degree in History from Duke University and his Juris Doctor from Duke University Law School, where he was a moot court champion. He is a member of the bars of New York and Massachusetts.

Recent Speaking Engagements

  • False Claims Act Conference, New York, May 2014
  • Keynote Speaker, Offshore Alert Conference, Miami, May 2014
  • Hedge Fund Compliance Master Class, New York, February 2014
  • “The Wolf of Wall Street: Behind the Scenes of Stratton Oakmont,” Heyman Center on Corporate Governance, January 2014
  • Financial Institutions in the Crosshairs: The False Claims Act and FIRREA, October 2013
  • Private Equity Operations & Compliance Forum, September 2013
  • SEC & DOJ Hot Topics 2013 Breakfast Briefing, New York, December 2012
  • PLI FCPA 2012 Conference, New York, May 2012
  • ACI National Conference on FCPA, New York, April 2012
  • PLI FCPA 2011 Conference, New York, May 2011
  • ACI FCPA-Health Sciences Conference, New York, May 2010
  • ACI Annual FCPA Conference, Washington, D.C., November 2008
  • Legal IQ Annual Securities Litigation Conference, New York, May 2008
  • “Ethics and Experts,” 2007 Antitrust Law Section Symposium, New York State Bar Association

Recent Publications

  • Op-ed, “The Real Belfort Story Missing From ‘Wolf’ Movie,” The New York Times, January 7, 2014.
  • “Nepotism: Friendly Relations? When Nepotism May Violate the FCPA,” The FCPA Report, October 17, 2012
  • “Foreign Corrupt Practices Act,” The US Private Real Estate Fund Compliance Guide, Private Equity International, June 1, 2012
  • “Does That Settle It? Well, Maybe Not,” National Law Journal, April 9, 2012
  • “Private Equity Investment and the FCPA,” Review of Securities and Commodities Regulations, Fall 2011
  • “Insider Trading: It’s Not for Suits,” Law Journal Newsletters, December 2010
  • “Six Ways a Board Can Manage FCPA Risk,” Corporate Board Member Magazine, October 1, 2010
  • “UK Serious Fraud Office Discusses Details of UK Bribery Act with Gibson Dunn,” September 7, 2010
  • “Erosion of the Fiduciary Duty Requirement in Insider Trading Actions,” Securities Litigation Journal, American Bar Association, Spring 2010
  • “Narrow, Don’t Abolish: The Facilitating Payments Exception to the FCPA,” The New York Law Journal, July 8, 2010
  • “Mutual Fund Litigation Triggered By the Credit Crisis,” The Review of Securities & Commodities Regulation,” June 3, 2009
  • “Under the FCPA, Who Is a Foreign Official Anyway?”, The Business Lawyer, 2008
  • “Due Diligence Under the Foreign Corrupt Practices Act: Defining a Foreign Official,” Clifford Chance US Regulatory & White Collar Update, 2008
  • “Anti-Money Laundering Laws and Regulations for Broker-Dealers: Spotlight on Foreign Broker-Dealers,” Clifford Chance Client Memo, 2008
  • “The U.S. Foreign Corrupt Practices Act and its Application to Foreign Companies that Do Not Issues Securities in the U.S.,” Clifford Chance Client Memo, 2008
  • “Five Things to Know About the FCPA,” Corporate Compliance Zeitschrift, January 2008
  • “SEC on Corporate Penalties: Two Steps Forward, One Step Backward,” New York Law Journal, February 2006
  • “Toward True Deterrence of Government Misconduct,” New York Law Journal, October 2004
  • “Regulation FD,” New York Law Journal, October 2002

Recent Media

  • “SEC Loses Insider-Trading Case,” The Wall Street Journal, May 30, 2014
  • “After Fighting Insider Trading Charges for 10 Years, a Fund Manager Is Cleared,” The New York Times, May 30, 2014
  • “12 Years Later, a Fund Manager Gets to Give His Side,” The New York Times, May 27, 2014
  • “Nelson Obus’s Lawyer Says His Client Is Honest or the ‘Lamest Insider Trader in History’,” The Wall Street Journal, May 19, 2014
  • “NY fund manager made insider trading ‘jackpot,’ SEC tells jurors,” Reuters, May 19, 2014
  • “The Wolf Hound Of Wall Street: Joel M. Cohen on Jordan Belfort, White Collar Work, And Corruption.” Forbes, May 6, 2014
  • “Inside Money: The real sheep of Wall Street?,” The New Zealand Herald, January 14, 2014
  • “Prosecutors Give Poor Reviews to Restitution From 'Wolf of Wall Street',” WSJ.com, January 12, 2014
  • “Jordan Belfort: The real wolf of Wall Street and the men who brought him down,” The Independent, January 12, 2014
  • “Boulton and Co.”, Sky News, January 10, 2014
  • “The Wolf of Wall Street: Why we like a villain,” BBC News, January 9, 2014
  • “'Wolf of Wall Street' prosecutor says film glorifies Belfort,” Fox Business, January 9, 2014
  • “Blockbuster Backlash,” CBS Morning News, January 8, 2014
  • “The Wolf of Wall Street Glorifies Crook’s Misdeeds Critics Say,” CBS Insider News, January 8, 2014
  • Op-ed, “The Real Belfort Story Missing From ‘Wolf’ Movie,” The New York Times, January 7, 2014
  • “‘Wolf of Wall Street’ Prosecutor Lambasts the Movie - Joel Cohen on Jordan Belfort,” WSJ.com, January 2, 2014
  • “Gibson Dunn teams with Lawyers Without Borders on Kenyan anticorruption effort,” National Law Journal, August 21, 2012
  • “Pro Bono Hot List,” National Law Journal, January 2, 2012
  • “The Curious Case of Nelson Obus,” The New York Times, Sunday Business Section Feature Article, June 5, 2011
  • “Attorneys from Gibson Dunn Tally 9000 Hours in Day Laborer’s Cause,” National Law Journal, March 24, 2011
  • “Danbury 11,” Editorial, The New York Times, March 14, 2011

PRACTICES

  • Real Estate Investment Trust (REIT)
  • Securities Enforcement
  • Securities Litigation
  • White Collar Defense and Investigations

EDUCATION

  • Duke University
    1988 Juris Doctor
    1988 Master of Arts
  • Middlebury College
    1984 Bachelor of Arts

ADMISSIONS

  • Massachusetts Bar
  • New York Bar

RECENT PUBLICATIONS

Webcast - Financial Institutions in the Crosshairs: The False Claims Act and FIRREA

Decoding FCPA Enforcement: The U.S. Government Issues Comprehensive Guidance on the Foreign Corrupt Practices Act

Nepotism: Friendly Relations? When Nepotism May Violate the FCPA

Foreign Corrupt Practices Act

Does That Settle It? Well, Maybe Not


Mary Kay Dunning is an associate in the New York office of Gibson, Dunn & Crutcher and a member of the Firm’s Litigation Practice Group. Ms. Dunning’s practice includes securities and complex commercial litigation, white collar defense and investigations, and global anti-corruption matters.

Ms. Dunning has represented financial institutions and individuals in insider trading investigations and regularly counsels clients regarding compliance with the securities laws. Recently, she was a member of the Gibson Dunn team that secured a jury trial victory on behalf of Wynnefield Capital and its portfolio manager, Nelson Obus, in SEC v. Obus, one of the longest running insider trading cases in history. Ms. Dunning also has experience in counseling boards of directors of public companies on corporate governance issues, and she has worked on teams that have conducted confidential investigations for boards of directors and privately held companies. Her practice also includes representing multinational companies in government and internal investigations pursuant to the U.S. Foreign Corrupt Practices Act, and she assists clients in drafting FCPA policies and strengthening their anti-bribery compliance programs.

Ms. Dunning is the Vice Chair of the Firm’s Associates Committee. Her pro bono work includes matters related to civil rights and immigration. She was part of a team of Gibson Dunn attorneys who represented plaintiffs on a pro bono basis in a high-profile immigration civil rights case (Barrera v. Boughton), which resulted in a favorable settlement for the plaintiffs and earned Gibson Dunn the National Legal Aid & Defender Association’s 2010 Beacon of Justice Award.

In 2013, Ms. Dunning was recognized by Super Lawyers New York Metro as a “Rising Star” in Business Litigation. She was also recognized as one of the Top Women Attorneys in Metro New York Rising Stars, as published in The New York Times Magazine in May 2014.

In 2004, Ms. Dunning graduated from Georgetown University Law Center, where she was the Publications Editor of The Tax Lawyer. Upon graduation, she served as a law clerk to The Honorable Deborah T. Poritz, Chief Justice of the New Jersey Supreme Court. Ms. Dunning received a Bachelor of Arts degree summa cum laude in Romance Languages and Literatures from Princeton University in 1999. She then joined Teach For America and spent two years teaching public school in Newark, New Jersey, before going to law school.

Ms. Dunning is admitted to practice law in New York, New Jersey, the District of Columbia, and the United States District Court for the Southern and Eastern Districts of New York.

PRACTICES

Securities Enforcement
Securities Litigation
White Collar Defense and Investigations

EDUCATION

Georgetown University
2004 Juris Doctor
Princeton University
1999 Bachelor of Arts

ADMISSIONS

District of Columbia Bar
New Jersey Bar
New York Bar

RECENT PUBLICATIONS

Implications Of The SEC's Recent Trial Losses

2013 Year-End Securities Enforcement Update

Webcast - Financial Institutions in the Crosshairs: The False Claims Act and FIRREA

2013 Mid-Year Securities Enforcement Update

Does That Settle It? Well, Maybe Not