David S. Petron

DAVID PETRON's securities enforcement practice has covered the entire range of SEC enforcement matters, including investigations of securities fraud, insider trading, accounting fraud, disclosure irregularities, Foreign Corrupt Practices Act (FCPA) violations, investment adviser misconduct, broker-dealer matters, and credit rating agencies registered as Nationally Recognized Statistical Rating Organizations (NRSROs). He has defended a wide variety of clients in investigations before the U.S. Securities and Exchange Commission (SEC), the U.S. Department of Justice (DOJ), the Financial Industry Regulatory Authority (FINRA), the Commodity Futures Trading Commission (CFTC), the National Futures Association (NFA), and other regulators.

David has deep experience with the regulation of NRSROs and has represented multiple credit rating agencies in SEC investigations. For example, he represented two NRSROs in the SEC’s first off-channel communications enforcement actions against credit rating agencies. He has defended numerous SEC investigations of NRSROs, including one litigated enforcement action. He is regularly called on to advise credit rating agencies on regulatory and compliance issues and to conduct internal reviews for NRSROs. He has also served as regulatory counsel on transactions involving credit rating agencies. 

David routinely advises registered investment advisers on compliance matters involving conflicts of interest, cross-trading and principal trades, expense allocations, valuation, registration issues, and other regulatory topics. He has defended numerous investment advisers in SEC investigations and assisted advisers with SEC examinations. He has also advised clients on the application of the risk retention rules applicable to securitization transactions.

David also defends public companies and other clients in a variety of SEC investigations related to potential accounting fraud, financial reporting and disclosure violations, and other matters arising under the federal securities laws. David has handled investigations involving revenue recognition, valuation, goodwill, intangible assets, securitizations, alleged pyramid schemes, and insider trading.

David advises clients on all aspects of compliance with the FCPA, including the development and implementation of FCPA and anti-corruption compliance programs and procedures. David has led comprehensive reviews of companies’ FCPA compliance programs and advised clients on FCPA issues related to mergers and acquisitions. He has defended companies in FCPA investigations and conducted FCPA internal investigations.

Some highlights of David’s recent experience include the following:

• Successfully defended an alternative asset manager in an SEC examination and follow-on enforcement investigation; investigation closed without enforcement action.
• Represented a Fortune 200 company in an SEC investigation related to proxy disclosures, resulting in favorable settlement with no penalty imposed on the company.
• Advised a SPAC sponsor in an SEC investigation related to financial projections in a de-SPAC transaction; investigation closed with no charges against the sponsor.
• In the Matter of DBRS, Inc. — defended an NRSRO in investigation related to internal control structure applied to credit ratings for commercial mortgage-backed securities (CMBS). 
• In the Matter of Legal & General Investment Management America, Inc. — represented an investment adviser in an SEC investigation related to equity cross-trading; settled enforcement order noted extraordinary cooperation and remediation.

David is also a member of the firm’s Appellate team and has focused on regulatory matters involving the First Amendment. He was heavily involved in free speech cases challenging the FCC’s regulation of broadcast indecency before the FCC and all levels of the federal courts, including a victory in the Supreme Court in FCC v. Fox Television Stations, Inc. (2012). David has also been involved in religious liberty litigation on a variety of church-state issues. He has briefed cases in the Supreme Court and a variety of federal circuit courts and personally argued cases before the D.C. Circuit and the D.C. Court of Appeals.

David serves as a member of the firm’s Office of General Counsel.

David joined the firm following clerkships with Judge Susan H. Black of the Eleventh Circuit Court of Appeals and Chief Judge D. Brooks Smith of the Western District of Pennsylvania. During the latter clerkship, he assisted Judge Smith with matters related to his nomination and ultimate confirmation to the Third Circuit.

A sampling of David’s other clients and matters includes:

Investment Advisers/Investment Companies

• Broker-dealer off-channel communications investigations — represented multiple broker-dealers in SEC and CFTC enforcement actions involving off-channel communications, including several self-reported matters resulting in significant cooperation credit.
• In the Matter of AssetMark, Inc. — represented a turnkey asset management platform in an SEC investigation related to disclosure of conflicts of interest involving a cash sweep program.
• Advised registered investment adviser on internal review of principal trades.  
• Advised private investment fund in connection with potential trading on the basis of material nonpublic information.
• Defended a private insurance company in an SEC investigation of potential issues arising under the Investment Advisers Act of 1940; investigation closed without action.
• Represented a registered investment adviser in an SEC investigation involving potential conflicts of interest and valuation issues; investigation closed without action.
• Represented several registered investment advisers in examinations by the SEC.
• In the Matter of Guggenheim Partners Investment Management, LLC — represented a registered investment adviser in an SEC investigation of alleged violations of the Investment Advisers Act of 1940.

NRSROs

• NRSRO off-channel communications investigations — represented both DBRS Morningstar and KBRA in the first two SEC enforcement actions involving off-channel communications rules applicable to credit rating agencies. 
• SEC v. Morningstar Credit Ratings, LLC — defended an NRSRO in a litigated enforcement action; personally argued the NRSRO’s motion to dismiss, resulting in a partial dismissal of the SEC’s claims and the unprecedented dismissal of the SEC’s request for injunctive relief.
• Advised a private equity firm on credit rating regulatory matters in connection with the acquisition of an NRSRO.
• In the Matter of Hilltop Securities Inc. and Daniel C. Tracy — represented a broker-dealer in SEC’s investigation of municipal bond “flipping.”
• In the Matter of DBRS, Inc. — represented an NRSRO in an SEC investigation relating to credit ratings on CLO combination notes.
• In the Matter of Morningstar Credit Ratings, LLC — represented an NRSRO in a first-of-its-kind investigation involving sales and marketing practices.
• Represented an NRSRO in an investigation related to CMBS ratings practices; investigation closed without action.
• Represented an NRSRO in an investigation related to whistleblower protections and Rule 21F-17; investigation closed without action.

Public Companies

• Successfully defended a SPAC sponsor in an SEC investigation relating to fairness opinions; investigation closed without enforcement action.
• In the Matter of David Dickson and Stuart Andrew Spence — represented former CFO of McDermott International Ltd. in an SEC investigation of alleged accounting fraud; investigation resolved on non-fraud basis.
• SEC v. Desarrolladora Homex S.A.B. de C.V. — represented a foreign issuer in a revenue recognition fraud investigation; investigation settled with no civil money penalty.
• Represented a public company in an SEC investigation of potential disclosure and accounting issues; investigation closed without action.
• Conducted an internal investigation involving potentially fraudulent sales and accounting practices at a public company.
• SEC v. Raytheon Company — represented a defense contractor in an SEC investigation of accounting and disclosure issues.
• Represented a public company in an SEC investigation relating to a restatement concerning the company’s accounting for goodwill; proactive defense strategy led to early closure of investigation.

Broker-Dealers

• Represented multiple broker-dealers in SEC investigations of off-channel communications.
• Represented a broker-dealer in an SEC investigation of trading activity as an authorized participant in bond ETFs; investigation closed without action.
• Represented a broker-dealer in an SEC investigation of possible short-selling violations.
• SEC v. Morgan Stanley & Co. Incorporated — represented a broker-dealer in an SEC investigation of email retention and production issues.

Foreign Corrupt Practices Act

• United States v. Smith & Nephew, Inc. — defended a medical device manufacturer in an FCPA investigation by the SEC and DOJ. 
• Advised hedge funds and clients in the electronics, food processing, financial services, pharmaceutical, medical device, and telecommunications industries on the design and implementation of FCPA and anti-corruption compliance programs.
• Represented several multinational life sciences companies in FCPA investigations before the SEC and the DOJ.

Other Matters

• Successfully defended a clearing agency in a review proceeding before the SEC.
• Represented a private direct sales company in an SEC investigation; investigation closed without action.
• City of Cambridge Retirement System v. Altisource Asset Management Corp. — successfully  defended a public company in private securities fraud action in both the district court and the Third Circuit.
• Represented a swap execution facility (SEF) in a CFTC investigation of certain trading matters; investigation closed without action against the SEF.
• In the Matter of IBFX, Inc. — represented a retail foreign exchange dealer in the CFTC investigation relating to minimum net capital requirements.
• Fox Television Stations, Inc. v. FCC — represented a broadcaster in Second Circuit and Supreme Court cases challenging FCC’s regulation of broadcast indecency.
• Represented a major accounting firm in multiple investigations before the PCAOB. 
• Represented Kyle Sampson in Congressional and other investigations relating to the removal of several U.S. Attorneys.

David chairs the Credit Rating Agencies Subcommittee of the ABA’s Federal Regulation of Securities Committee. Before graduating summa cum laude from Notre Dame Law School, David served on the Notre Dame Law Review.