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Dennis A. Stubblefield

Partner

Location: San Diego and Orange County, California
Phone: (619) 696-9500 
Direct: (760) 533-0233
Fax: (619) 615-5290
E-mail: [email protected]

Mr. Stubblefield is a partner of the firm.  He is in charge of its Orange County office.  He brings over 41 years’ experience in representing clients in securities enforcement, compliance and litigation matters.  He is one of just a handful of attorneys nationwide with substantial experience in all three sectors important to this practice area: the regulators (SEC Enforcement), in house (most recently as General Counsel of three AIG broker-dealers), and in private practice (with small, medium and large law firms).  His practice focuses on securities enforcement defense/internal investigations, and securities litigation and arbitration. 

Mr. Stubblefield has substantial experience, and success, in the defense of SEC and Finra investigations and enforcement matters.  Many of these matters have arisen in crisis management situations, for example with parallel civil and/or criminal proceedings and related regulatory issues, such as the pendency of broker-dealer membership applications or key registered representative compliance issues.

Mr. Stubblefield’s investigative experience includes handling numerous matters at the SEC, and various corporate internal investigations focused on securities and broker-dealer compliance, including short-selling, over-concentration in customer accounts and selling away/outside business activities of registered representatives.  He also has experience in employment-related investigations, particularly sexual harassment.

He has extensive experience in litigation and arbitration.  In addition to the litigation he handled at the SEC, Mr. Stubblefield has deep and broad experience in various types of securities litigation and arbitration, particularly the defense of broker-dealers and registered representatives in NASD (now Finra) arbitration.  He has represented promoters, investment advisers, investors, and officers and directors in various securities litigation matters.  He also has a broad background in other civil and business litigation.

During his career, Mr. Stubblefield has handled a wide variety of legal matters on behalf of broker-dealers, emphasizing the defense of customer-broker arbitrations, and regulatory/enforcement defense of firms and registered representatives.   As General Counsel of three AIG firms, Mr. Stubblefield was in charge of all legal functions of the respective firms, including management of outside counsel.  He has particularly extensive experience representing independent contractor firms.

Mr. Stubblefield’s experience also includes handling various compliance and risk management assignments on behalf of broker-dealers and investment advisers, and their representatives.  He was in charge of all compliance functions as CCO of two of the AIG firms, and supervised and/or participated in major projects such as revamping of major policies, procedures, forms and contracts.  In private practice, he has handled various compliance and risk management projects ranging from review of advertising and radio scripts of a broker-dealer OSJ to counseling an investment adviser of two private funds regarding steps necessary to be prepared for an imminent SEC subpoena, and related issues.

Mr. Stubblefield is particularly well-suited to provide accurate evaluation of securities claims and regulatory threats by virtue of his experience as both a mediator and expert witness.  He has mediated over 130 customer-broker and industry disputes, and has served as an expert witness on over a dozen matters, including broker-dealer suitability, due diligence, compliance and failure to supervise matters.

He has extensive experience, as lawyer, expert witness, and mediator, in matters involving alternative investments, including Tenant-in-Common (TIC)/Delaware Statutory Trust (DST) interests, and various other forms of private placements.  As lawyer, he has counseled broker-dealers in connection with the retail offer and sales of TICs and other non-conventional products such as forward contracts, including the drafting of ancillary disclosure documents designed to provide enhanced, simplified disclosure of material risks. 

Mr. Stubblefield brings a proactive, creative, common-sense approach to solving regulatory, enforcement, compliance and litigation issues on behalf of his clients, emphasizing, whenever possible, full, transparent cooperation with key regulators, and employing effective use of long-standing professional relationships to enhance client value and outcomes.

Mr. Stubblefield is a member of the California Bar.  He was formerly a Finra mediator and an NASD arbitrator.  He served an Adjunct Professor of Law at Western State College of Law (Fullerton/Irvine, CA) from 2013 to 2016, where he taught Securities Regulation (3 units) and Business Law Ethics (1 unit). He will be teaching a 2-unit Business Law Ethics class at Lewis & Clark Law School in Portland, Oregon, commencing Fall semester 2018.  He regularly presents and writes on various business/legal topics, particularly concerning securities regulation, broker-dealer compliance and supervision, and investment-related arbitration and mediation.

Awards

Areas of Practice

  • Securities regulatory/enforcement defense/internal investigations
  • Securities litigation and arbitration

Education

  • Univ. of So. Cal. Law Center, Los Angeles, CA
    • J.D. — 1976 (top 25%)
    • Note and Article Editor, So. Cal. L. Rev.
  • Univ. of California at Berkeley
    • A.B. — 1972
    • Honors: Phi Beta Kappa
    • Major: Integrated Social Sciences

Bar Admissions

  • California
  • U.S. Court of Appeals, 9th Circuit
  • All United States District Courts in California

Representative Matters

SEC Enforcement Division

  • SEC v. Micro-Therapeutics, 1984 WL 2400, Fed. Sec. L. Rep. P 99,695 (S.D.N.Y. 1984).  Litigated, served as second chair in successful 3-week bench trial of manipulation case now known as “pump and dump”; prepared annotated criminal reference of promoter of scheme, which assisted U.S. Attorney in successful perjury prosecution.
  • SEC v. Monarch Oil and Gas/John Allen.  Supervised investigation of, and brought emergency TRO in U.S. District Court in Miami, obtained permanent injunctive relief against promoter of nationwide oil and gas boiler room fraud.
  • SEC v. Christos Netelkos, 592 F. Supp. 906 (S.D.N.Y. 1984).  Part of litigation team in action against promoter of counterfeit/unregistered securities; prepared pre-trial memorandum in support of ruling that defendant waived Fifth Amendment privilege.
  • Branch Chief, Enforcement, Miami Branch Office, 1982-1983
  • Selected to and  served on special projects including final Home Office review/revision of Staff Report on Transactions in Securities of the City of New York; review and analysis of underlying books and records of three reporting companies’ voluntary disclosure of foreign payments pursuant to Enforcement Division program to effectuate the purposes of the Foreign Corrupt Practices Act; review and analysis of the implications of the district court decision in United States v. Fields, 1977 WL 1022, Fed. Sec. L. Rep. P 96,074 (S.D.N.Y.1977).

Securities Regulatory and Enforcement Defense

  • Represented prime bank scheme promoter before SEC, and coordinated criminal counsel. and transactional counsel for investor rescission offer.
  • Represented broker-dealer in Finra follow-up inquiry from customer complaint by elderly customer against the firm and a founder/top producer.  Mr. Stubblefield prepared an extensive submission in response to Finra request for documents and information; strategy included the voluntary undertaking of an internal investigation.  Staff sent close-out letter within five months of submission.
  • Represented insurance agent/registered representative in two-year Finra investigation focusing on selling away issues arising from a nationwide Ponzi scheme; key issues in matter revolved around whether the representative’s marketing activities (a networking approach using introductions and referrals to and by his “Centers of Influence”) constituted violations of NASD Rule 3040.  Mr. Stubblefield’s strategy involved extensive, proactive, voluntary cooperation through voluminous responses to numerous Rule 8210 requests, voluntary submissions of additional documents and statements, and close cooperation with Finra Enforcement counsel; strategy was successful in Staff agreeing to abandon Rule 3040 charges in favor of proceeding primarily under former Rule 3030.
  • SEC v. Tendler, 2001 WL 753851, SEC Litigation Release No. 17058 (C.D. Cal., July 3, 2001)  Represented former officer/directors of a high-tech public company in early litigation of SEC accounting fraud case.  Work included participating in court-ordered settlement process including negotiations with SEC staff in connection with final settlement including favorable terms of disgorgement; case was pending in presence of both a federal court securities fraud class action, and a similarly-pled individual state court action against clients.

Private Securities Litigation

  • Scremin et al. v. Roth et al., No. CV 92-1389-IEG (S.D. Cal., May 25, 1995).  Mr. Stubblefield served as a senior member of a trial team at Stroock and Stroock and Lavan in defending two officers/directors in fraud-on-the-market case brought by Milberg Weiss.  Mr. Stubblefield took depositions of various named plaintiffs, and took and defended various expert depositions, including on damages.  He was primarily responsible for the vetting and selection of key expert on pharmaceutical/FDA issues.  He prepared various supporting declarations in connection with a Motion for Summary Judgment, which was granted on the basis of the failure of plaintiffs to raise any genuine issue of material fact on the element of scienter.
  • Weinman v. IMH et al., No. 1343146 (Cal. Superior Ct., County of Santa Barbara, Feb. 23, 2011).   Persuaded Plaintiff to dismiss registered investment adviser in state court securities fraud action; dismissal was obtained early in case, after initial document/written discovery, without necessity of investment adviser’s deposition.
  • Represented general partner of failed $20 million real estate syndication in securities fraud class action with parallel criminal investigation.
  • Consulting securities/corporate law counsel to sole practitioner on breach of fiduciary/fraud case involving a nursing home enterprise; coordinated the vetting and selection of securities/corporate law expert witness, assisted with pre-trial work and participated in successful mediation of case (with Peter Goldstein, Esq.).

Broker-Dealer Litigation and Arbitration

  • Defended wirehouse in $10 million securities fraud class action alleging complicity in real estate fraud involving 1031 exchanges; aggressive law and motion and discovery practice resulted in dismissal with prejudice of client on second amended complaint without the necessity of any client depositions, or production of any client documents.
  • Defended independent broker-dealer in NASD customer arbitration alleging churning and breach of fiduciary duty; where early analysis showed both turnover and cost-to-equity ratios to be problematic, Mr. Stubblefield worked closely and creatively with claimants’ counsel to achieve early settlement significantly under applicable E&O retention level.
  • Defended wirehouse and registered representative against pension plan in state court case involving large uncovered put writing during September/October 1987; achieved attractive settlement early in case.
  • Represented broker-dealers and registered representatives in various other retail customer arbitrations and litigation.
  • Defended wirehouse in preliminary injunctive challenge of makeup of NASD Arbitration panel; successfully defeated such challenge and obtained confirmation of award.

Investigations

  • Investigated broker-dealer, investment adviser, insider trading, management and accounting fraud at SEC’s Enforcement Division.  Conducted review of three corporate internal investigations, including underlying books and records, submitted by registrants pursuant to the Enforcement Division’s voluntary disclosure program of foreign payments in light of the Foreign Corrupt Practices Act.
  • Managed and participated in internal investigation at independent contractor broker-dealer of office-wide sales of low-priced speculative securities, coordinated efforts of outside counsel and CFA in investigation.
  • Investigated short-selling scheme by various market participants in securities of public company.
  • Internal investigation of sales practices (involving non-public REIT sales, many to elderly customers) of major producer/founder of independent contractor broker dealer in the context of a related customer complaint and a Finra inquiry.
  • Internal investigations of allegations of office-wide sexual harassment at wirehouse, and regional broker-dealer.

Broker-Dealer/Investment Adviser Compliance and Risk Management

  • Managed all legal functions of 3 AIG/SunAmerica broker-dealers and compliance functions for 2 of these firms; managed the revisions of written supervisory procedures (WSPs) of two broker-dealers to conform to AIG/SunAmerica template, managed roll-out to field; drafting/review of policies and procedures for Anti Money Laundering (AML), privacy, margin, remote office supervision, variable products, mutual funds, including switch/1035 exchange forms; managed major revisions of registered representative and OSJ contracts providing enhanced compliance and protections for the broker-dealer; compliance review of issues relating to representatives with key alliances with CPAs and real estate brokers; review of proposed private securities transactions under NASD Rule 3040 including     hedge fund offerings; due diligence on potential acquisition.
  • At AIG firm, in charge of restructuring leadership and management of a major threat involving a rogue broker whose actions triggered hundreds of filed and threatened NASD arbitration claims; Mr. Stubblefield’s strategy involved early counteraction of the unfavorable influence of the broker’s personal counsel, the establishment of a mediation process to resolve all claims, and the personal handling of an internal investigation of alleged selling away by the broker, and management of the ensuing challenges when the firm terminated the broker for cause; majority of cases successfully resolved in mediation process.
  • Litigation/Enforcement Defense management, on behalf of an independent broker-dealer, of a multi-pronged threat triggered by an elderly customer claim alleging unsuitability and over-concentration involving non-public REITS, where the broker of record was a major producer and founder of the broker-dealer, and where there existed several other membership and rep-oriented compliance issues (Mr. Stubblefield’s strategy, including a voluntary internal investigation, partly shared with Finra, resulted in an early settlement with the customer, and a close-out letter by the Staff within five months).
  • Litigation/Enforcement Defense management of a rep office transition.  Situation arose when office self-reported to its broker-dealer certain compliance issues following a voluntary audit, and where a disgruntled ex-employee wrongfully converted proprietary documents and furnished them to both Finra and State securities regulators; outside counsel for the broker-dealer conducted an extensive investigation, which resulted in the broker-dealer’s intended termination for cause of various registered persons within office.  Mr. Stubblefield’s strategy included intensive document review and client interviews, communications and negotiations with broker-dealer’s outside counsel on timing of, and acceptable language on, the U-5s, and leveraging his relationships with certain other broker-dealer business and compliance personnel to assist rep group to find a new broker-dealer quickly willing to accept the incoming group with knowledge of the impending derogatory U-5s and the coming regulatory follow-up investigations; his strategy was successful in negotiating acceptable U-5 language and facilitating timely new broker-dealer relationship, thereby minimizing risk and business costs to client.
  • While General Counsel at the AIG/SunAmerica firms, management of an emergency situation involving a recently-acquired registered rep who was improperly affiliated with a statutorily-disqualified individual; the broker-dealer had loaned a significant six-figure sum on a bonus note, the repayment of which appeared threatened, and unlikely if the rep was terminated regular way.  Mr. Stubblefield conceived and developed novel theory and approach supporting an ex-parte TRO and freeze order of all of rep’s assets on the rationale that public investors/the public interest was imminently threatened by the rep’s continued affiliation with the disqualified individual.  In contrast to what would have been the likely long wait in litigation for partial recovery in a standard legal action for damages, Mr. Stubblefield’s strategy resulted in the prompt, full collection of the bonus note proceeds, and recoupment of significant attorneys’ fees, as well as improved compliance of a key OSJ.
  • Risk management and compliance advice and coordination for investment adviser of two private funds; situation involved a pending SEC investigation of a closely-related matter, an imminent SEC subpoena to the client, and a pending investigation by an Assistant U.S. Attorney of certain aspects of the related matter, including the likely intention to prosecute one of the two primary individuals of the client investment adviser; strategy involved working with co-counsel on various investment adviser registration issues, referrals of client to specialized employment counsel, and to counsel to evaluate potential claims against securities transactional attorney involved in structuring the funds and the client’s management of and compensation from the funds.

Other Civil/Business Litigation

  • Experience in litigation matters involving products liability, title insurance, real estate, franchise disputes, unfair competition, injunctions/extraordinary relief, wrongful termination and corporate mismanagement/breach of duty claims.
  • Defended feed mill in products liability action alleging the sale of tainted feed to poultry breeding operation; eliminated fraud exposure through early motion practice; developed key defense theme of securities fraud and mismanagement on part of plaintiff/promoter; lead role in selection and deposition defense of various experts; prepared pre-trial materials; prepared settlement brief and participated in settlement resulting in payment of less than $100,000 on original $5 million claim.
  • Schwartz v. Rent-A-Wreck of America, Inc., et al., filed Nov.16, 2005 (C.D. Cal., Hon. M. Real).  Lead counsel on emergency federal court application to stop an unfair going private transaction; aggressive litigation tactics enabled client to be in a favorable position for a negotiated business solution which obviated protracted litigation (with Neville Johnson, Esq.).
  • Appointed by Bankruptcy Court in Florida to represent mortgage broker in obtaining relief from default judgment of $1.2 million entered prior to Mr. Stubblefield’s representation; matter settled early in case at cost of $50,000.
  • Defended former president of financial institution in Bankruptcy adversary proceeding alleging $220 million in losses, and negligence of client in connection with check-kiting scheme by bank customer; obtained a dismissal of all claims against client before any discovery taken.
  • AAA arbitration of claim on lender’s title policy for damages resulting from failure to discover that real estate parcel was landlocked.
  • As Assistant General Counsel at a major franchisor, in charge of all dispute resolution, including the management of a significant mass franchisee action which had previously been mishandled.  Mr. Stubblefield conducted an internal investigation of the matter, which resulted in a change of outside trial counsel, the termination of an in-house lawyer; he assisted the General Counsel and CEO in achieving a favorable settlement at mediation shortly after trial commenced.  Thereafter, in close cooperation with the CEO, he worked creatively with plaintiffs’ counsel on that case, to achieve early resolution of various similar individual claims, and to discourage such counsel from bringing any future litigation against the franchisor.

Expert Witness and Mediation

Mr. Stubblefield serves as an expert witness and mediator, providing these services separately from the firm:

  • Expert witness on behalf of investor in RDI Ponzi scheme (nationwide “black box” type scheme); qualified at trial in California Superior Court, County of San Diego, and testified regarding the nature of the scheme and why it violated state and federal securities registration and anti-fraud provisions; testimony assisted plaintiff’s counsel in obtaining judgment against promoter, including exemplary damages, fully collected by investor.
  • Expert witness consultation and/or testimony on various cases involving sales of fraudulent private placements directly by issuers.
  • Expert witness consultation and/or testimony on various customer-broker claims involving issues of suitability, over-concentration, due diligence, selling away, and compliance and supervision, including on matters involving Tenant in Common interests (TICs), Delaware Statutory Trusts (DSTs), other private placements
  • Mediation of over 130 cases, primarily involving retail customer-broker and industry claims (majority of cases resolved while pending in NASD/Finra arbitration); cases involved a wide range of issues including churning, suitability, over-concentration, due diligence, compliance and supervision; experience in mediation of cases with alternative investments including TICs, other private placements, and forward contracts.

Publications and Presentations

Securities-related Topics

  • Letter to the Editor, The Wall Street Journal, in response to Op-Ed piece by Henry Manne which argued, in effect, that all Insider Trading should be legal; letter published May 6, 2014.
  • “Finra: Fiduciary Standards, Examination and Enforcement Program Priorities,” panel presentation at National Regulatory Services Fall Conference, October 2013 (with David Greene).
  • “Representing Clients in SEC Investigations,” December 2012, Orange County Lawyer magazine, Newport Beach, CA.
  • “(Securities) Seller Beware,” December 2010, North County Lawyer magazine, Vista, CA.
  • “Get Your Money Back! Claims Against Brokers and Financial Advisors: The View from Both Sides,” MCLE presentation, North County Bar Association, Civil Litigation Section, October 2010 (with Brian Miller).
  • “The Future of Arbitration: Finra Initiatives and New SEC Oversight,” panel presentation at National Regulatory Services Fall Conference, October 2010 (with David Sobel).
  • “Mediation Strategies in Professional Line Cases,” panel presentation at Professional Lines Attorney Network, Regional Workshop, February 2010 (with Samuel Edgerton, Chad Weaver and Jami Maciel).
  • “ADR for Investor-Stockbroker Disputes,” two-part article, October and December 2009, North County Lawyer magazine.
  • “The Nuts and Bolts of Customer-Stockbroker Arbitration,” December 2009, Orange County Lawyer magazine.
  • “Guilty Until Proven Innocent: What You Need to Know about Arbitration,” NAIBD Webinar on risk prevention and arbitration strategy for broker-dealers, September 2009 (with Lisa Roth, Chad Weaver, Houston Goddard and Robert Girard).
  • “Nuts and Bolts of Securities Arbitration and Mediation,” MCLE presentation, Orange County Bar Association, ADR Section, February 2009 (with Skip Raring and Terry Ross), and North County Bar Association, ADR Section, April 2009 (with Terry Ross).
  • “Maximizing Mediation,” May 2008, North County Lawyer magazine.

Other Professional Topics

  • “The Care and Feeding of CEOs (and GCs too): Reflections of a Former General Counsel,” July 2014, Orange County Lawyer magazine.
  • “The Care and Feeding of CEOs (and GCs too),” MCLE Seminar, Orange County Bar Association, May 2014.  Conceived, developed and co-moderated program regarding the needs of corporate clients from their outside counsel (with Wayne Gross, co-moderator, and panelists Michael Baroni, Lucy Dunn, Ashley Good and Mark Peterson).
  • “Getting to Successful Collaboration in Government and Political Contexts,” MCLE program by former 5-term Congressman Tom Campbell, Dean of the Dale E. Fowler School of Law at Chapman University, Orange County Bar Association joint section meeting, October 2012.  Responsible for initial outreach which led to program, necessary steps in development of logistics and promotion; introduction of Dean Campbell.
  • “Building a Successful Solo or Small Firm,” MCLE Annual Program of the Solo Practitioner and Small Firm Section of Orange County Bar Association, September 2012.  Developed and prepared outline for program, moderated panel (with Rosanne Faul, Dimetria Jackson, Neil Pedersen and Douglas Schroeder).

Professional Associations and Memberships

  • Orange County Bar Association (Newport Beach, CA); member, Executive Board of Solo Practitioner and Small Firm Section (2010-2014; chair, 2012)
  • North County Bar Association (Vista, CA); member, Editorial Board, North County Lawyer magazine
  • Multnomah Bar Association, Portland, OR
  • Federal Bar Association, Oregon Chapter
  • Clark County Bar Association, Vancouver, WA
  • King County Bar Association, Seattle, WA
  • American Bar Association
  • National Society of Compliance Professionals
  • Adjunct Professor of Law: Securities Regulation (3 units), Business Law Ethics (1 unit), Western State College of Law, Irvine, CA (2013-2016); Business Law Ethics (2 units), Lewis & Clark Law School, Portland, OR (upcoming Fall semester 2018)(with Peter Jarvis).
  • National Institute of Trial Advocacy (Boulder, CO), 1978, participant
  • Former arbitrator, mediator, NASD/Finra