Financial Investigations, Restatement and Accounting

Overview

Handling matters that range from minor books and records violations to allegations of intentional accounting misconduct, the Financial Investigations, Restatement and Accounting team (FIRA) combines the resources of seasoned financial litigators, Securities and Exchange Commission (SEC) defense counsel and corporate disclosure and governance professionals to help companies navigate their way through accounting-related special investigations, government inquiries and, when necessary, financial restatements. Our team of specialized accounting and finance focused litigators, white collar lawyers and corporate teams bring decades of experience to the handling of all aspects of accounting and auditing issues.

The FIRA team has represented companies, officers and directors, accountants and auditors in matters involving complex technical interpretations of Generally Accepted Accounting Practices (GAAP), internal control issues, bribery and FCPA sourced revenue situations and allegations of active employee accounting fraud. We know the difference between small accounting mistakes and accounting fraud, and how each situation governs the potential need for a restatement. With our depth and experience, the FIRA team helps clients handle the full range of accounting-related issues, from discrete matters to large, complex international securities cases.

The Financial Investigations, Restatement and Accounting practice team is led by John J. Carney, Jonathan R. Barr and Jimmy Fokas.

John J. Carney, a former practicing CPA at a Big Four accounting firm, SEC Senior Counsel in the Division of Enforcement and Department of Justice (DOJ) Securities Fraud Chief, has unparalleled experience investigating and defending cases involving technical accounting issues, restatements and allegations of affirmative financial misconduct. As a prosecutor, he successfully served as the lead counsel in the Cendant accounting and restatement fraud trial securing a victory after a nine-month trial. As defense counsel, he constructed a “bottom up” accounting defense resulting in an unprecedented non- fraud resolution in the Diebold, Inc. SEC restatement matter. His expertise and knowledge of accounting issues have earned him recognition by the American Institute of Certified Public Accountants as certified in financial forensics, while his skill as a courtroom advocate has resulted in favorable verdicts and national recognition as the “go to” lawyer in high-stakes accounting cases. Mr. Carney has been nationally recognized as one of the best securities enforcement defense lawyers in the U.S. and he is a frequent lecturer on accounting, restatement issues and related trial strategy to both the private bar and government agencies, including the SEC and the DOJ.

Jonathan R. Barr, a former Assistant U.S. Attorney, DOJ Fraud Section Trial Attorney and SEC Senior Counsel in the Division of Enforcement, is a seasoned advocate who brings more than two decades of experience to advise and defend clients facing government investigations into complex financial accounting matters. In private practice, Mr. Barr has successfully represented NYSE companies, General Counsels, Chief Financial Officers and a Chief Compliance Officer in complex government investigations. His recent engagements include the representation of a Chief Financial Officer and a General Counsel in SEC investigations initiated as a result of accounting restatements. Numerous rating organizations have recognized Mr. Barr’s skill in representing clients in government investigations, and the Securities Docket notably named Mr. Barr to its “Enforcement 40” list of the 40 top securities enforcement defense lawyers in the country.

During his tenure as Senior Counsel at the SEC’s Division of Enforcement, Jimmy Fokas was a lead member of the team that investigated and commenced a civil prosecution against Symbol Technologies, Inc. and certain former executives, alleging widespread accounting irregularities. Mr. Fokas’s efforts resulted in Symbol restating its financial results related to revenue, expenses and net income for a four-year period, with adjustments of almost $500 million. Mr. Fokas also investigated, and commenced civil actions involving offering fraud and fraudulent trading practices. In private practice, Mr. Fokas has conducted internal investigations and represented individuals and entities concerning accounting irregularities before the SEC and other government agencies. Mr. Fokas helps his clients navigate the complexities of government investigations by mastering complex fact patterns and crafting a strategy intended to deliver favorable outcomes while minimizing reputational and financial risks.

Our FIRA team has successfully represented accounting firms and individuals in accounting-related matters before the SEC, the Public Company Accounting Oversight Board (PCAOB), the DOJ, and state regulatory offices. We conduct internal accounting-related investigations, which are timely, targeted, confidential and comprehensive, and are designed to avoid disrupting business operations and minimize reputational and financial risks. We also advise public company boards concerning their handling of accounting errors and irregularities.

Our corporate lawyers handle corporate governance, securities compliance and related matters on behalf of our clients. These governance issues include working alongside legal and compliance departments on behalf of management, audit committees, special committees and boards of directors to identity violations and recommend remedial actions including facilitating any mandatory or voluntary self-disclosures to government agencies and developing corporate governance programs. Our FIRA team also regularly assists clients with compliance and disclosure requirements under securities laws and related regulations.

The FIRA team has been nationally recognized and is Chambers ranked for white collar matters. Our members have been named to the Securities Docket “Enforcement 40,” a list of the 40 top securities enforcement defense lawyers in the country. FIRA team members regularly lecture and write on important accounting issues, including financial statement materiality, technical accounting applications and emerging disclosure issues.

Select Experience

  • Successfully represented senior management of Diebold Inc., a Fortune 50 company, in multiple federal and state proceedings concerning highly technical revenue recognition issues, disclosure and securities fraud in connection with a multibillion-dollar accounting restatement over a five-year period.
  • Successfully performed a comprehensive investigation for the audit committee and executive management of a global payment operator regarding compliance with federal financial regulations.
  • Advised the Chairman and CEO of a multibillion-dollar public company during internal and SEC investigations related to alleged revenue recognition, internal control and governance misconduct.
  • Conducted an internal investigation of revenue channel stuffing and accounting violations related to rebate programs promoted by an international health care products company, and drafted training guidelines for business and sales employees.
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Experience

  • Successfully represented senior management of Diebold Inc., a Fortune 50 company, in multiple federal and state proceedings concerning highly technical revenue recognition issues, disclosure and securities fraud in connection with a multibillion-dollar accounting restatement over a five-year period.
  • Successfully performed a comprehensive investigation for the audit committee and executive management of a global payment operator regarding compliance with federal financial regulations.
  • Advised the Chairman and CEO of a multibillion-dollar public company during internal and SEC investigations related to alleged revenue recognition, internal control and governance misconduct.
  • Conducted an internal investigation of revenue channel stuffing and accounting violations related to rebate programs promoted by an international health care products company, and drafted training guidelines for business and sales employees.
  • Conducted revenue recognition related investigation for defense contractor in Russia, Belarus, Kazakhstan and the Ukraine to assess potential exposure.
  • Conducted an internal investigation of senior European technology company executives in connection with alleged accounting violations relating to prepayment provisions in customer contracts.
  • Represented the former officers of a major governmental financial institution under parallel investigations brought by multiple federal agencies, including the SEC, and related class action litigation following a $4.5 billion accounting restatement.

Recognition

  • Law360 White Collar “Practice Group of the Year” (2014)
  • Chambers USA: Litigation: White-Collar Crime & Government Investigations in New York (2013 to 2016)
  • The Legal 500 United States: Dispute Resolution: White-collar criminal defense (2016)
  • BTI Client Service 30: BakerHostetler advanced 19 positions to #9 (2016)
  • U.S. News - Best Lawyers "Best Law Firms" Criminal Defense - White Collar (2016)
    • Metro Cleveland, Tier 2
    • Metro New York, Tier 1
    • Metro Washington, D.C., Tier 3
  • The Best Lawyers in America© (2016)
    • 4 lawyers named in Criminal Defense: White-Collar

Key Contacts