January 28, 2011 5:12 PM
Greenberg Traurig Terminates Partner Targeted by SEC in NewPoint Investigation
Posted by Brian Baxter
[Update, 1/28/11, 5:55 p.m. EST - A comment from Greenberg Traurig has been added to the tenth paragraph below, noting that the firm has terminated Tamman. According to a firm spokesperson, the termination occurred on Friday; the firm offered no more details regarding the time of the termination. As of the time of this update, Tamman's partner bio and his photo still were live on Greenberg Traurig's Web site.]
The SEC has instituted administrative proceedings against Santa Monica-based Greenberg Traurig corporate partner David Tamman for allegedly falsifying documents being turned over to the regulator's staff on behalf of a former client caught up in a securities fraud investigation.
In a six-page order instituting proceedings filed on Friday, the SEC claims Tamman engaged in improper professional conduct during an official agency examination of his client, Beverly Hills-based NewPoint Securities, which took place in April and May of 2009.
A year ago, the SEC sued NewPoint and several of its top executives, accusing the financial services firm of securities fraud and the unregistered sale of securities. As part of that action, the regulator also sought and obtained an injunction from a federal court in Los Angeles freezing NewPoint's assets and placing them into receivership.
The SEC's suit against NewPoint and its top executives claims that from 2003 until 2009, the defendants persuaded more than 100 members of Los Angeles's Iranian American community to purchase $20 million in debt instruments.
According to that complaint, NewPoint president and co-owner John Farahi, his wife Gissou Rastegar Farahi, and controller Elaneh Amouei misled investors by telling them that the investments were low-risk, even though most of the money was transferred to accounts used by Farahi to fund the construction of a "multimillion-dollar personal residence in Beverly Hills." The Farahis and Amouei also were charged with engaging in risky options futures trading that saw the Farahis lose $18 million in late 2008 and early 2009. (The case against the Farahis is pending.)
Tamman's work for NewPoint touched two firms as the SEC built its case against the company. Prior to joining Greenberg Traurig in November 2009, Tamman, an investment funds and corporate transactions partner, worked at Nixon Peabody, which served as NewPoint's outside counsel. According to November 2009 report in the Los Angeles Daily Journal, the SEC subpoenaed both Tamman and Nixon Peabody for NewPoint records.
The SEC allegations against Tamman announced on Friday accuse the attorney of doctoring NewPoint's private placement memoranda--a document used in the sale of securities--to include information about a loan to Farahi that wasn't disclosed to investors.
The SEC's action does not mention Greenberg Traurig or Nixon Peabody by name. It refers to Tamman's employer as a "large international law firm"--the agency claims he ordered firm associates and IT personnel to further alter the documents' "metadata" so that the SEC's staff probing NewPoint wouldn't be able to differentiate them from the originals.
Nixon Peabody offered the following statement when contacted by The Am Law Daily on Friday. "Mr. Tamman was hired by the firm as an income partner in February 2007," the firm says. "We terminated Mr. Tamman in October 2009 as soon as we learned of the SEC's investigation and he failed to explain to us his actions. We have fully cooperated with the SEC in its investigation and will continue to do so."
Greenberg Traurig, contacted several times on Friday, provided the following comment to The Am Law Daily via e-mail at 5:38 p.m. EST: "David Tamman was terminated by the firm. The allegations in the SEC complaint, which he failed to disclose to us, allege conduct and actions which took place at a former firm and of which we were not aware." As of 5:55 p.m. EST, Tamman's partner bio and his photo were still live on Greenberg Traurig's Web site. (Click here to download a PDF of that page.)
Tamman did not respond to a request for comment, nor did his lawyer, Crowell & Moring white-collar and regulatory partner Thomas Hanusik in Washington, D.C.
Brent Smyth and Finola Manvelian from the SEC's regional office in Los Angeles conducted the agency's investigation. Donna McCaffrey and Christopher Bruckmann from the SEC's office of the general counsel are leading the SEC's litigation against Tamman. Richard Humes, associate general counsel in the SEC's office of the general counsel in Washington, D.C., says that the next step in the case will see Tamman appear before an administrative law judge in Los Angeles, once one is appointed.
Gary Lincenberg, a name partner at Los Angeles litigation boutique Bird, Marella, Boxer, Wolpert, Nessim, Drooks & Lincenberg, is representing Farahi on the SEC charges. Lincenberg was in a meeting on Friday and unavailable for comment.Make a comment