Under SEC Proposal, Perkins Coie Client and Former Insurance Executive Michael Van Gilder’s Conduct Much More Limited than Originally Alleged
DENVER, Col. (March 3, 2014) - Accepting Mr. Van Gilder’s long-held position that he did not engage in legally cognizable tipping of others, that his conduct was more limited in time and extent than initially alleged, and that he should only be held responsible for the narrow actions he personally took in 2007, the SEC late last week filed its “Unopposed Motion for Entry of Proposed Final Judgments Against Defendant Michael Van Gilder and relief Defendant Stephen Diltz,” as well as its Second Amended Complaint, in federal District Court in Denver.
Mr. Van Gilder was represented by Perkins Coie SEC Litigation partner Jose A. Lopez as well as Investigations and White Collar Defense partners (and former federal prosecutors) Robert N. Miller and T. Markus Funk.
“We are exceptionally pleased that the SEC now recognizes Mr. Van Gilder’s very limited role in this unfortunate episode, now more than a half-decade old,” said Miller. “We have come a long way since the early SEC and DOJ complaints alleging that Mr. Van Gilder tipped relatives, his broker, and his co-worker – the evidence proved that nobody ever traded on any information obtained from Mr. Van Gilder, and we are gratified that the government, as reflected by its proposed resolution of this matter, now agrees and has informed the Court of the same.”
The conduct at issue took place in late 2007, when Mr. Van Gilder was a successful businessman, civic leader, and the 40-year-old father of two young girls. (DOJ and the SEC filed their criminal and civil charges in 2012). As was evident from the more than 40 letters submitted on his behalf in the criminal case, Mr. Van Gilder throughout his life has been a decent and hard-working family man who led an otherwise exemplary life and gave much of himself to his community. Mr. Van Gilder at all relevant times has fully acknowledged that, in 2007, he made several grievous mistakes, falling prey to an uncharacteristic lapse of judgment. As Judge Daniel in the criminal case recognized, that misconduct did not tell the whole story, nor did it justify the prosecution’s attempt to use this case - and Mr. Van Gilder - to seek one of, if not the, harshest known sentences for comparable insider trading cases. Judge Daniel sentenced Mr. Van Gilder to a period of 6 months’ home confinement.
Here, the SEC in its Unopposed Filing has recommended that Mr. Van Gilder be “[e]njoined from future violations of the federal securities laws the Complaint alleged he had violated; to pay disgorgement of $109,265representing profits that Van Gilder gained as a result of the conduct alleged in the Complaint, plus prejudgment interest thereon in the amount of $22,667 for a total of $131,932, provided this amount is credit[ed] by the $86,100 payment Defendant made pursuant to the August 20, 2013 Order of Forfeiture entered against Van Gilder in United States v. Michael Van Gilder, 12-cr-00447- WYD (D. Colo.); and to pay a civil penalty of $109,265.”
Miller and Funk in the criminal case highlighted Mr. Van Gilder’s deep remorse and shame triggered by the harm he knows his conduct has inflicted upon his family, friends and community; the severe consequences Mr. Van Gilder faces as a convicted felon; the extraordinary damage to his personal and his family business’s reputations; the pending parallel SEC civil proceeding (Mr. Van Gilder’s case has been the subject of extensive media coverage in local outlets, as well as national media such as The New York Times); the permanent loss of his job and life-long profession (through the revocation of his insurance licenses); the very limited temporal and substantive role he played in this offense (an offense for which he continues to stand as the only person charged); the fact that he, by the time of his sentencing, will already have paid the government any “profits” he made; and, of particular significance, the sentences imposed in similar cases in this district and throughout the nation.
As Miller and Funk argued in their written submission, “[s]winging for the bleachers might be appropriate in a baseball game. But given this conduct, and the personal characteristics of this defendant, we urge this Court to decline the prosecutor’s request to use Mr. Van Gilder to make sentencing history.”
Perkins Coie's White Collar & Investigations practice represents companies and individuals in a wide range of complex matters at the federal, state and local levels, and advises clients on all aspects of corporate compliance programs. Our team includes former U.S. Attorneys and Assistant U.S. Attorneys, a former SEC Enforcement Branch Chief, SEC counsel, a U.S. State Department attorney, state prosecutors, and other former government regulators. We have managed numerous parallel criminal and civil proceedings with federal and state prosecutors as well as many government agencies and regulatory bodies, including the Department of Justice (DOJ), Securities and Exchange Commission (SEC), Commodity Futures Trading Commission (CFTC), Federal Reserve, Federal Trade Commission (FTC), Internal Revenue Service (IRS) and Financial Industry Regulatory Authority (FINRA). We also have substantial criminal appellate expertise, in both federal and state courts.
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