David Smyth represents corporations and individuals facing federal and state government investigations and in complex litigation. His related work in corporate compliance, whistleblower issues, and data security extends to public companies and other entities with sophisticated regulatory matters.
David has a wide-ranging enforcement practice focusing on representation of corporations and individuals facing action by federal and state authorities. David also conducts internal corporate investigations and advises companies on compliance with federal and state securities laws and other laws and regulations. He has handled cases in three of the SEC’s regional offices and its headquarters in Washington, D.C., and has also led the defense of investigations by the U.S. Department of Justice, the Commodity Futures Trading Commission, and the Consumer Financial Protection Bureau. This investigative work has included leading the responses to numerous federal grand jury subpoenas and directing the crafting of Wells submissions to the SEC.
David's work in corporate compliance extends to public companies, investment advisers, broker-dealers, and other entities with complex regulatory issues. David also has an active pro bono criminal litigation practice in which he represents defendants charged with federal crimes.
In his work, David demonstrates the skills that make him a sought-after counselor and advocate: respect of the regulators, sensitivity to the nuances present in complex business environments, and deep understanding of his clients’ industries.
David practices complex business litigation and represents clients on a variety of financial issues, both in federal and state court and in arbitrations before FINRA. He has represented numerous businesses and individuals in matters involving alleged securities violations, interest rate swaps, and the assessment of business property taxes. In these matters, David brings a creative approach for his clients, seeking solutions where others have found insurmountable problems.
Recent matters have included:
- Representing an individual in novel litigation against the SEC involving a “survivor option” in corporate bonds;
- Representing a corporation and individual in litigation against an insurance company involving a welfare benefit plan under Section 419 of the Internal Revenue Code;
- Arguing the nation’s first motion to dismiss under SLUSA after the Supreme Court’s landmark decision in Chadbourne & Parke v. Troice (2014)
- Representing numerous clients in FINRA arbitrations involving alleged securities violations;
- Representing numerous clients in litigation involving interest rate swap derivatives;
- Representing the victim of an investment scheme involving violations of the anti-fraud and broker-dealer registration provisions of the federal securities laws. Recovered 110% of the lost investment.
David guides companies through complex networks of government agencies, rules, and regulations to help them efficiently comply with the law. In doing so, he keeps in mind that that efficiency is key to balancing business objectives with regulatory requirements. And when possible, David devises legal alternatives that are appropriate for a business in the face of challenging regulations.
In pursuit of these goals, David closely monitors:
- developments in the Guidelines Manual of the U.S. Sentencing Commission, in particular those relevant to corporate compliance and ethics programs.
- the 2012 Foreign Corrupt Practices Act Resource Guide, issued jointly by the Justice Department and the SEC, and
- public speeches by government officials.
All of these give clues to enforcement patterns before they happen. He brings all of that material to bear in drafting written compliance programs and training employees in the requirements of complex regulations. This effort allows clients to prevent minor compliance problems from mushrooming into expensive investigations.
David has particular experience in advising on compliance with the Foreign Corrupt Practices Act, data privacy laws, the Investment Advisers Act of 1940, whistleblower laws and regulations, and other securities regulations.
David has worked closely with data security issues since 2007, when he led the SEC’s investigation and litigation of then-novel cases involving online securities brokerage intrusions by Russian and East European hackers. Since then, David’s data security practice has continued to grow with the increasing proliferation of cyber attacks and other data breaches. He has leveraged his experience with government regulators in handling the responses to numerous data security incidents for corporate clients. He also counsels businesses on a wide range of issues related to data security and privacy, including drafting data privacy policies. Recently, on behalf of a multi-billion dollar data processing client, David led a nationwide research project to assess state laws addressing limitations of liability for data breaches in state contracts.
David is a Certified Information Privacy Professional/United States (CIPP/US), the preeminent credential in the field of privacy.
David previously served as an Assistant Director in the Securities and Exchange Commission’s Division of Enforcement. While at the SEC from 2005 to 2011, he spearheaded high-profile investigations and litigation involving insider trading, financial statement and disclosure fraud, the Foreign Corrupt Practices Act, investment advisory fraud, auditor misconduct and broker-dealer misconduct. David was also instrumental in establishing and supervising the Enforcement Division’s Office of Market Intelligence, created in the wake of the Bernard Madoff scandal to revamp the SEC’s process for receiving and analyzing whistleblower tips regarding potential violations of the federal securities laws. David’s work in hedge fund investigations was the origin of the SEC’s Aberrational Performance Inquiry.
David brings that experience to bear in private practice. His recent clients have included:
- A biotechnology company regarding potential FCPA violations in China;
- An investment management firm in a complex investigation by the SEC’s Asset Management Unit;
- An out-of-state law firm in an investigation by N.C. State Bar’s Authorized Practice Committee;
- An individual in an investigation conducted by the Consumer Financial Protection Bureau;
- The CEO of a formerly private company in SEC financial fraud investigation;
- An individual in federal criminal Electronic Benefit Transfer fraud investigation;
- Registered securities brokers in numerous FINRA investigations;
- The former CEO of large publicly traded technology company in an SEC insider trading investigation – client not charged with misconduct;
- The former CEO of a private company in an SEC insider trading investigation – client not charged with misconduct;
- An attorney in an investigation by N.C. State Bar’s Grievance Committee;
- An individual in an SEC insider trading investigation – client not charged with misconduct.
- An individual in connection with an SEC investigation into alleged Ponzi scheme – client not charged with misconduct;
- An individual in investigation into forex trading by the Commodity Futures Trading Commission – client not charged with misconduct;
- An individual in parallel insider trading investigations by the SEC and Justice Department.
SEC Law and Policy Award (2011)
SEC Business Processes Award (2011)
SEC Enforcement Division Director’s Awards (2006-2009)
Charles Marshall and David Smyth Discuss Data Security at Agio Cyber Security Incident Response Event (Oct. 1, 2014)
David Smyth Discusses Securities Compliance in 2013 with Carolina Security Traders Association (May 26, 2013)
David Smyth Discusses SEC Accounting and Audit Enforcement Actions with N.C.S.U. Accounting Society (Apr. 18, 2013)
David Smyth Moderates Panel on Dodd-Frank/SEC Whistleblower Provisions at N.C. Bar Association's Business Law Institute (Feb. 22, 2013)
Corruption Law's Importance to Triangle Companies, Triangle Business Journal (May 4, 2012)
Extracting the Thorn(burg) in SEC's Side, Law360: Legal News & Data (Apr. 17, 2012)
Case Study: SEC v. BankAtlantic, Law360: Legal News & Data (Mar. 5, 2012)
"FCPA Risks and Coping Strategies," Conducting a Cross-Border Business From North Carolina, Brooks Pierce and Dixon Hughes Goodman seminar (Nov. 10, 2011)
A New Framework for Analyzing Gag Orders against Trial Witnesses, 56 Baylor L. Rev. 89 (2004)
David previously served as an Assistant Director in the Securities and Exchange Commission’s Division of Enforcement. While at the SEC from 2005 to 2011, he spearheaded high-profile investigations and litigation, involving insider trading, financial statement and disclosure fraud, the Foreign Corrupt Practices Act, investment advisory fraud, auditor misconduct and broker-dealer misconduct. David was also instrumental in establishing and supervising the Enforcement Division’s Office of Market Intelligence, created in the wake of the Bernard Madoff scandal to revamp the SEC’s process for receiving and analyzing whistleblower tips regarding potential violations of the federal securities laws. David’s work in hedge fund investigations was the origin of the SEC’s Aberrational Performance Inquiry. David shares his insight on SEC enforcement actions and related issues on his blog, Cady Bar the Door.