Gerald Hodgkins

December 3, 2020, Covington Alert

I. Introduction On November 2, 2020, the SEC’s Division of Enforcement issued its Annual Report for Fiscal Year 2020 and just two weeks later Jay Clayton confirmed that he would be ending his tenure as Chairman of the SEC at the end of this year.[1]  In a year dominated by the COVID-19 pandemic, Chairman Clayton caps off his enforcement legacy with what could ...

October 9, 2020, Covington Alert

Last week, the SEC announced settled enforcement actions against two public companies and two former senior executives based on small allegedly improper quarterly accounting adjustments that cumulatively overstated the companies’ reported earnings per share (EPS) by as little as one penny. These actions arise from the agency’s ongoing EPS initiative, which ...

September 29, 2020, Covington Alert

Last week, a divided Securities and Exchange Commission amended its whistleblower rules, hailing the changes as adding “clarity, efficiency and transparency to its successful whistleblower program.” Although the agency made a large number of changes to the program, the amendments should not have a significant overall effect on SEC whistleblower activity, which ...

June 24, 2020, Covington Alert

On June 22, 2020, in Liu v. SEC, the U.S. Supreme Court, by an 8-1 majority, upheld the SEC’s decades-old practice of seeking disgorgement of ill-gotten gains from securities law violators in civil enforcement actions filed in federal district court. The SEC’s victory, however, was tempered by the Court’s insistence that disgorgement must be strictly limited to ...

June 23, 2020, Law360

Gerald Hodgkins is quoted in Law360 regarding the U.S. Supreme Court’s opinion in Liu v. SEC, which determined that the SEC can obtain disgorgement through enforcement actions in district courts as a form of equitable relief. Mr. Hodgkins says the regulator's current practice of seeking a tippee's profits from a tipper in insider trading cases likely won't fly ...

April 14, 2020, Law360

Amanda Kramer and Gerald Hodgkins were quoted in Law360 regarding the potential fraud schemes that may be exposed  during the COVID-19 pandemic. Ms. Kramer says, “Ponzi schemes are often discovered when investors seek to redeem their investments and learn that the money's not there. As we saw in the wake of the 2008 financial crisis, a loss of confidence in the ...

January 30, 2020, Covington Alert

It has been another strong year in anti-corruption enforcement, with 2019 meeting or beating the high-water mark for enforcement across a number of measurements.

January 8, 2020, Covington Alert

In United States v. Blaszczak,[i] a divided panel of the Second Circuit held that the federal wire fraud statute and a rarely used securities fraud statute criminalize insider trading beyond the reach of what is covered by the statute historically used to prosecute the offense. The decision may lead to an increase in insider trading prosecutions, including those ...

November 25, 2019

Due to a dramatic increase in administrative proceedings against investment advisers, combined with a noticeable increase in issuer reporting / audit and accounting cases, the Securities and Exchange Commission ended Fiscal Year 2019 with a slight increase in enforcement activity compared to 2018.  Absent the results of its share class selection disclosure ...

November 6, 2019, Wall Street Journal

Gerald Hodgkins is quoted in the Wall Street Journal regarding an SEC enforcement case targeting the sale of higher-fee mutual funds. Mr. Hodgkins found that fines against such defendants are usually harder for the government to collect. Unlike Wall Street banks and public companies that are quick to pay, individuals and smaller firms accused of brazen frauds ...

October 8, 2019, Covington Alert

A pharmaceutical company, Mylan, N.V., recently paid $30 million to settle an SEC enforcement action alleging multiple disclosure failures arising from an investigation by the Department of Justice.

October 2, 2019, Covington Alert

The enforcement staff of the Public Company Accounting Oversight Board (“PCAOB”) recently issued guidance for when it will recommend to the PCAOB disclosing the identity of non-party audit clients in disciplinary orders against auditors. The guidance confirms a policy change that we identified earlier this year.

April 15, 2019, Law360

February 27, 2019, Covington Advisory

On February 26, 2019, the Public Company Accounting Oversight Board (“PCAOB”) for the first time issued disciplinary orders against auditors that protected the identity of the auditors’ client. In the past, the PCAOB had a practice of identifying the audit client by name in disciplinary orders if the matter involved violations of auditing standards by the ...

Q1 2019, Covington Alert

It was business as usual for FCPA enforcement in 2018. The U.S. Department of Justice (“DOJ”) and the U.S. Securities and Exchange Commission (“SEC”) collected a total of $1 billion from seventeen corporate defendants, including through their share of two high-value, multi-jurisdictional enforcement actions. DOJ also announced thirteen new FCPA prosecutions ...

Winter 2019, Covington Alert

It was business as usual for FCPA enforcement in 2018. The U.S. Department of Justice (“DOJ”) and the U.S. Securities and Exchange Commission (“SEC”) collected a total of $1 billion from seventeen corporate defendants, including through their share of two high-value, multi-jurisdictional enforcement actions. DOJ also announced thirteen new FCPA prosecutions ...

January 16, 2019, Covington Alert

On December 26, 2018, the U.S. Securities and Exchange Commission ("SEC") settled an enforcement action against Centrais Eléctricas Brasileiras S.A. ("Eletrobras"), an electric utilities holding company majority-owned and controlled by the Brazilian government.

Winter 2018, Lexis Practice Advisor

November 8, 2018, Corporate Crime Reporter

Gerald Hodgkins is featured in an interview with Corporate Crime Reporter regarding the SEC proposal to limit the size of whistleblower awards. Under current SEC rules, whistleblowers are entitled to an award of ten to thirty percent of the recovery. The securities industry is now pushing to limit the size of SEC whistleblower awards. Under a proposed SEC rule, ...

November 6, 2018, Corporate Counsel

Gerald Hodgkins is quoted in Corporate Counsel regarding the SEC’s annual enforcement report. Reflecting on the data, Mr. Hodgkins says, “You’re seeing more cases that are really honed in on the operating metrics and financial goals of the company. These newer cases are focused on particular operating goals, operating metrics. It has increasing emphasis by the ...

November 3, 2018

Due to a flurry of enforcement activity in the last quarter of Fiscal Year 2018, which closed at the end of September, the Securities and Exchange Commission filed nearly 10% more cases in 2018 than in the year before. The agency topped last year's numbers in every major category of cases except issuer disclosure and accounting, which were down about 13% from ...

November 3, 2018, The New York Times

Gerald Hodgkins is quoted in The New York Times regarding SEC enforcement activity during the first 20 months of the current Administration. Mr. Hodgkins says there was an uptick in enforcement in 2018 against fraudulent stock offerings and investment advisers accused of lying and stealing. At the same time, the SEC brought fewer market manipulation cases, which ...

October 25, 2018, Covington Alert

On October 16, 2018, the Securities and Exchange Commission (the “Commission”) issued a Section 21(a) report of investigation (the “Report”) warning public companies about the importance of assessing the likelihood of cyber-related threats when designing internal accounting controls. The Report described the Division of Enforcement’s investigation of nine ...

October 5, 2018, Covington Alert

Over 3,000 commenters submitted letters to the Securities and Exchange Commission ("SEC") concerning the agency's recently proposed amendments to its whistleblower rules. This response reflects the perceived importance of the SEC's proposal to companies and employees.

July 19, 2018, Covington Alert

Last week, in SEC v. Cohen, a federal district court dismissed an SEC enforcement action, in its entirety, on statute-of-limitations grounds. Most notably, citing the Supreme Court’s 2017 Kokesh decision, the court held that the injunction sought by the SEC in the case "would function at least partly to punish Defendants and is therefore a penalty" for purposes ...

April 24, 2018, Covington Alert

On Wednesday, April 18th, the SEC introduced a much-anticipated package of proposed rules and formal guidance concerning the standards of conduct for financial professionals. The more than 1,000-page proposal, which emerged eight years after Congress required the agency to conduct a study on the topic, addresses whether investment advisers and broker-dealers ...

March 28, 2018, Commercial Dispute Resolution

Commercial Dispute Resolution highlights the arrival of David Luttinger and Gerald Hodgkins at Covington. Commenting on Luttinger's addition, Mitchell Dolin says that the firm was “drawn to his superb national reputation as a trial lawyer in the coverage field and to his strengths as an individual and colleague.” According to David Kornblau, Hodgkins’ “broad ...

March 13, 2018, Compliance Reporter

Gerald Hodgkins is quoted in a Compliance Reporter article regarding a recent settlement between Valor Capital Asset Management and the Securities and Exchange Commission. According to Hodgkins, the settlement serves as an example of the way the agency’s improved data analytics can help regulators spot potentially problematic activity. “What is different in this ...

February 23, 2018, Covington Alert

On Wednesday, the Supreme Court issued its much-anticipated decision in Digital Realty Trust, Inc. v. Somers. Ruling 9-0, the Court held that the Dodd-Frank Act prohibits retaliation against whistleblowers only if they reported suspected wrongdoing directly to the SEC.

February 21, 2018, Compliance Reporter

Gerald Hodgkins is quoted in a Compliance Reporter article regarding his recent arrival as a partner in Covington's Securities Litigation and Enforcement and White Collar Defense and Investigations practices. “I bring to the table a deep understanding of what the issues are that drive the SEC and division of enforcement, along with what pressures affect them and ...

February 13, 2018, Global Investigations Review

Gerald Hodgkins is quoted in a Global Investigations Review article regarding his recent arrival at Covington. According to Hodgkins, he chose Covington after witnessing its excellent defence work while at the U.S. Securities and Exchange Commission.

February 12, 2018

WASHINGTON—Gerald Hodgkins has joined Covington as a partner in the Securities Litigation and Enforcement and White Collar Defense and Investigations practices in Washington. Mr. Hodgkins most recently served as an Associate Director in the Enforcement Division of the Securities and Exchange Commission and has worked at the SEC’s Enforcement Division since ...

February 12, 2018, Law360

Gerald Hodgkins and David Kornblau are quoted in a Law360 article regarding Hodgkin's recent arrival as a partner in Covington's Securities Litigation and Enforcement and White Collar Defense and Investigations practices. Hodgkins says he is looking forward to “enhancing” Covington’s SEC enforcement practice, as well as complementing its white collar and ...

February 12, 2018, The National Law Journal

Gerald Hodgkins is quoted by The National Law Journal in an article regarding his recent move to Covington. "I was attracted to Covington because of the quality of its lawyers and its culture of teamwork and collaboration,” Hodgkins says. “I look forward to playing a key role in enhancing the firm’s SEC enforcement practice and complementing the firm’s prominent ...