The Securities and Exchange Commission has obtained judgments against former Dewey & LeBoeuf LLP executives Stephen DiCarmine and Joel Sanders in an enforcement action arising from their roles in an alleged fraudulent $150 million bond offering.
In 2014, the SEC filed charges against DiCarmine, Sanders, and others in federal district court in Manhattan alleging that in 2008 and 2009, Sanders, then the chief financial officer of Dewey & LeBoeuf, in conjunction with other employees, devised a scheme and directed his staff, to materially falsify the firm’s financial statements in order to meet lender covenants. The SEC further alleged that DiCarmine, the firm’s executive director, was aware of these efforts.
In March 2010, Dewey & LeBoeuf conducted a $150 million private placement of bonds. The SEC claims that Sanders defrauded investors in the offering by, among other things, providing a private placement memorandum to investors that incorporated the fraudulent financial statements.
The SEC further alleged that Sanders and DiCarmine participated in a conference call where the firm’s false financial information was provided to investors.
Both Sanders and DiCarmine agreed to be permanently enjoined from various securities law violations. Additionally, Sanders is prohibited from acting as an officer or director of a public company, and will pay disgorgement plus prejudgment interest, as well as civil monetary penalties that will be determined by the court at a later date.
To resolve the SEC’s case against him, DiCarmine will pay a civil monetary penalty of $35,000.