This coming Wednesday in Houston, U.S. Securities and Exchange Commission Regional Director Eric Werner of the Fort Worth office will be the featured guest at Texas Lawbook CLE hosted by Vinson & Elkins and Holland & Knight.
Texas Lawbook subscribers and members of the Association of Corporate Counsel’s Houston and DFW Chapters are welcome to attend in person in Houston or via a webcast.
The CLE panel, which includes former SEC associate director Jessica Magee, will be moderated by former SEC senior counsel for enforcement Rebecca Fike, who is now a partner at Vinson & Elkins. During her decade at the federal agency, Fike was involved in dozens of large enforcement actions against companies and executives, including electric vehicle maker Nikola Corp. and its Chief Executive Officer Trevor Milton. Details of the CLE are below.
In advance of next Wednesday’s CLE, Fike gave an interview to The Texas Lawbook.
Texas Lawbook: Eric Werner has now been on the job as SEC FWRO director for one year. What are the biggest impacts you think he has had so far and what impact do you think he will have?
Rebecca Fike: Eric has spent his entire legal career at the SEC and brings a deep well of knowledge and connections to the regional director role, which is often chosen from outside the commission. The history he has with each person who works at the FWRO, beginning on Day 1 of his job as regional director, is a big asset in managing such a large group of staff. I think this is particularly true in a post-Covid SEC, where staff can do the vast majority of their work from home. Hiring and promotions are also where Eric has had, and will continue to have, a big impact. Since he had to vacate his prior role of associate director to become regional director, picking the new associate over enforcement was a big decision, and David Fraser is a great pick. Continuing to be a key voice in promotion decisions can leave a lasting impact on an organization with generally slow turnover.
Lawbook: What do you think have been the biggest areas of focus for the FWRO during the past year, and what do you think it will be in the year ahead?
Fike: Based on the actions I’m seeing from Fort Worth regional office on the defense side, which is obviously a very limited slice of their docket, it seems like they are focused on the full gamut of securities enforcement. From public company cases, to accounting, to private offering frauds, to market manipulation — the office remains dedicated to pursuing sophisticated matters on all fronts.
Lawbook: What are the biggest challenges facing the FWRO?
Fike: Generally, I think the challenges facing the FWRO are the same as those facing any SEC office: limited resources, lack of certainty in the fiscal process, and the inability to hire and backfill attorneys and other professionals as often as they are needed. This feels particularly acute at the FWRO because of the explosive growth in population and business activity in Texas over the last few years. Texas has some of the country’s most populous cities and more Fortune 500 companies than any other state. Where there is money and industry, the SEC will be looking for staff to launch investigations, and it can be hard to keep up.
Lawbook: Has the SEC’s whistleblower initiatives resulted in any significant matters yet for the FWRO? If yes, what were they? If no, why do you think it hasn’t?
Fike: Now that I’m back in private practice, I don’t usually get to know the origin of the investigations I work on from the defense side. However, based on the increasing number of whistleblower-originated cases I worked on in my last several years at the Commission, I’d imagine many if not most of the cases I’m working now from the outside are the result of the whistleblower program. The program has been wildly successful at the SEC, so much so that [the Southern District of New York] and the DOJ are now adopting their own versions. The Whistleblower program announces its results each year and in 2023 the Office of the Whistleblower received 18,000 tips, up from 12,300 the year before. Traditionally FWRO has received many of those tips, due to the great attorneys in the office and the large Texas footprint they cover.
Lawbook: What are one or two predictions regarding the FWRO for the year ahead?
Fike: I predict the office will remain very active and aggressive in the year ahead. With the new leadership firmly in place and everyone seemingly settled in the post-Covid remote work environment, I expect to see a lot of cases being filed out of the office. I think we will continue to see the traditional oil and gas offering fraud cases, because for as long as those schemes exist the SEC and especially FWRO will go after them, but I also expect to see large public company matters, market manipulation cases, FCPA cases and more.
Please join The Texas Lawbook on Wednesday, June 5 at noon for an update on the key developments in SEC enforcement affecting corporate litigation, compliance and disclosures. Email Publisher Brooks Igo at brooks.igo@texaslawbook.net to register and receive more information. You are invited to submit questions for the panel with your registration.