Top SEC lawyer on 'Fabulous Fab' trial to depart agency

By Sarah N. Lynch

WASHINGTON, Sept 27 | Fri Sep 27, 2013 5:53pm EDT

WASHINGTON, Sept 27 (Reuters) - Matthew Martens, the top trial lawyer at the U.S. Securities and Exchange Commission who led the agency to victory in its blockbuster civil fraud case against Goldman Sachs Vice President Fabrice Tourre, is leaving the SEC at the end of September.

The SEC said its current deputy chief litigation counsel, Matthew Solomon, will take over the top position.

The SEC's case against Tourre was one of the most high-profile matters to emerge out of the 2007-2009 financial crisis. At the heart of the SEC's case was whether Tourre had misled investors in a synthetic collateralized debt obligation (CDO) called Abacus 2007-AC1.

The SEC said Tourre, who once referred to himself as "the fabulous Fab" in an email, should have let investors know that Paulson & Co Inc, the hedge fund run by billionaire John Paulson, had helped choose the subprime mortgage securities underlying the CDO and was betting against it.

Leading up to the trial against Tourre, many critics openly questioned the strength of the SEC's case, saying the agency was wrong to target a low-level Goldman employee.

Goldman Sachs had previously settled the matter with the SEC for $550 million; no high-level executives were charged in the case.

Martens was able to convince a jury that Tourre was liable for fraud, marking what most consider to be the highlight of his three years working at the SEC.

Martens' plans to leave the SEC this fall were widely expected.

Reuters first reported in May, well before the Tourre trial began, that Martens was testing the waters for prospective employment at several law firms

At that time, he was inquiring internally about whether certain firms including Kirkland & Ellis; Paul, Weiss, Rifkind, Wharton & Garrison; WilmerHale; Latham & Watkins, and Cleary Gottlieb Steen & Hamilton were representing clients in SEC cases.

In some instances, Martens recused himself from working on those cases in order to comply with strict ethics rules that prevent employees from working on matters involving prospective employers.

The SEC's announcement on Friday did not say where Martens plans to go next. Martens could not be immediately reached for comment.

Solomon has served as second in command in the SEC's trial unit since June 2012.

Before working at the SEC, Solomon was a federal prosecutor for more than 10 years.

View the original article here

UPDATE 1-Top SEC lawyer on 'Fabulous Fab' trial to depart agency

By Sarah N. Lynch

WASHINGTON, Sept 27 (Reuters) - Matthew Martens, the top trial lawyer at the U.S. Securities and Exchange Commission who led the agency to victory in its blockbuster civil fraud case against Goldman Sachs Vice President Fabrice Tourre, is leaving the SEC at the end of September.

The SEC said its current deputy chief litigation counsel, Matthew Solomon, will take over the top position.

The SEC's case against Tourre was one of the most high-profile matters to emerge out of the 2007-2009 financial crisis. At the heart of the SEC's case was whether Tourre had misled investors in a synthetic collateralized debt obligation (CDO) called Abacus 2007-AC1.

The SEC said Tourre, who once referred to himself as "the fabulous Fab" in an email, should have let investors know that Paulson & Co Inc, the hedge fund run by billionaire John Paulson, had helped choose the subprime mortgage securities underlying the CDO and was betting against it.

Leading up to the trial against Tourre, many critics openly questioned the strength of the SEC's case, saying the agency was wrong to target a low-level Goldman employee.

Goldman Sachs had previously settled the matter with the SEC for $550 million; no high-level executives were charged in the case.

Martens was able to convince a jury that Tourre was liable for fraud, marking what most consider to be the highlight of his three years working at the SEC.

Martens' plans to leave the SEC this fall were widely expected.

Reuters first reported in May, well before the Tourre trial began, that Martens was testing the waters for prospective employment at several law firms

At that time, he was inquiring internally about whether certain firms including Kirkland & Ellis; Paul, Weiss, Rifkind, Wharton & Garrison; WilmerHale; Latham & Watkins, and Cleary Gottlieb Steen & Hamilton were representing clients in SEC cases.

In some instances, Martens recused himself from working on those cases in order to comply with strict ethics rules that prevent employees from working on matters involving prospective employers.

The SEC's announcement on Friday did not say where Martens plans to go next. Martens declined to comment. A source familiar with the matter said he had not decided.

Solomon has served as second in command in the SEC's trial unit since June 2012.

Before working at the SEC, Solomon was a federal prosecutor for more than 10 years.

View the original article here

Bank of America fraud trial spotlights whistleblower awards

By Nate Raymond

NEW YORK, Sept 27 | Fri Sep 27, 2013 5:16pm EDT

NEW YORK, Sept 27 (Reuters) - The former executive who blew the whistle on questionable mortgage lending at Countrywide Financial Inc could reap up to $1.6 million under a law dating from the 1980s savings-and-loan crisis.

Edward O'Donnell filed a whistleblower lawsuit last year, the basis for a U.S. Justice Department case against Countrywide's parent, Bank of America Corp, that went to trial this week.

The Justice Department accuses Countrywide of fraudulently selling thousands mortgages it knew were bad to Fannie Mae and Freddie Mac, which suffered losses when the loans defaulted.

The lawsuits say a Countrywide program called the "High Speed Swim Lane," also called "HSSL" or "Hustle," starting in 2007 eliminated quality checkpoints and compensated employees based on loan volume.

O'Donnell filed his lawsuit under the False Claims Act, which allows whistleblowers to bring cases on behalf of the government against companies that defraud the United States.

Before the trial, the judge dismissed the government's claims under the False Claims Act, which eliminated O'Donnell's ability to recoup 15 percent to 30 percent of the up to $848.2 million in penalties the Justice Department has said it would ask for.

But in court on Tuesday, a lawyer from the U.S. Attorney's Office confirmed that O'Donnell also filed a whistleblower claim directly with the Justice Department under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA).

FIRREA is a savings-and-loan-era law that has become a key tool in efforts to pursue institutions over the financial crisis. Among other provisions, the 1989 law has a 10-year statute of limitations, longer than the limit of other laws used in financial fraud cases.

Less publicized is the ability of whistleblowers to bring claims asserting violations of FIRREA. Under a process set up in a separate law in 1990, the Justice Department has a year to investigate claims under FIRREA submitted by whistleblowers.

O'Donnell filed a FIRREA declaration in February 2012, the same day as he filed his lawsuit in federal court in New York. The Justice Department intervened in the case in October 2012.

In testimony Friday, O'Donnell said he filed the lawsuit because he did not believe anyone in the government was aware of Countrywide's "Hustle" program.

"Because they were not aware of it, no one was being held accountable," O'Donnell said.

'GET RICH QUICK'

But in opening statements Tuesday, a lawyer for Bank of America sought to cast O'Donnell in different light, saying he entered, "into a little bit of a get-rich-quick scheme."

"He had read about the fact maybe as a whistleblower he might collect some money by going back five or six years and saying that, you know what, this is a fraud," said Brendan Sullivan of the law firm Williams & Connolly.

With FIRREA complaints, whistleblowers such as O'Donnell are entitled to a range of awards. But they are capped at $1.6 million, much less than the multimillion-dollar prizes whistleblowers in False Claims Act cases have earned.

O'Donnell's potential recovery, for example, pales in comparison to the $31 million earned by Sherry Hunt, a former employee who filed a complaint against Citigroup Inc under the False Claims Act. The Justice Department intervened in her case and obtained a $158.3 million settlement in February 2012.

Plaintiffs lawyers say they have been giving more attention lately to whistleblower awards under FIRREA. But the small size of the potential award for FIRREA complaints makes it less attractive for potential whistleblowers to step forward and risk their careers and reputations on a case, some lawyers say.

"If it was a 15 to 30 percent bounty provision for whistleblowers bringing claims under FIRREA, you'd see more," said Shayne Stevenson, a lawyer at Hagens Berman Sobol Shapiro, who has brought other False Claims Act cases against Bank of America.

O'Donnell's strategy of filing both a False Claims Act case and a FIRREA declaration might be becoming more common. Mark Labaton, a lawyer at Motley Rice, said he was considering doing the same for at least one purported whistleblower soon.

"Often it makes sense to do both because often you do not know which is the more practical statute to use to get damages," Labaton said.

A spokeswoman for the Justice Department could not immediately provide statistics on how many FIRREA whistleblower claims it had received. A lawyer for O'Donnell did not respond to request for comment.

The case is U.S. ex rel. O'Donnell v. Bank of America Corp et al, U.S. District Court, Southern District of New York, No. 12-01422.

View the original article here

Brain Cancer vaccine trial

A brain cancer trial that uses a patient’s tumour to develop their own personalised vaccine is being piloted for the first time in the UK.

King’s College London and  King’s College Hospital  – both part of King’s Health Partners Academic Health Sciences Centre – will be the first in the UK to jointly trial the DCVax® therapy which is already significantly extending life for patients in a US trial.

From July, King’s will begin recruiting patients newly diagnosed with Glioblastoma mulltiforme (GBM) - the most common and most aggressive primary malignant form of brain cancer.

Current survival time in the UK following Glioblastoma diagnosis is around 12 -18 months. However, in two initial clinical trials in the US, the vaccine delayed the recurrence of the tumour to two years, and extended patients’ average survival to three years – without toxic side effects.

Patients with suspected Glioblastoma undergo immediate surgery to remove as much of the tumour as possible. Patients on the trial will have the same surgery but the removed tumour will be sent to a specialised facility at King’s College London. There, experts will use each patient’s tumour to develop a personalised vaccine using the DCVax® immune therapy.

Following six weeks of standard combined radiotherapy and chemotherapy, the first personalised vaccine will be administered as a simple injection under the skin in the arm. There will be up to ten injections in total, administered over a two year period.

Mr Keyoumars Ashkan, Lead for Neuro-Oncology at King’s College Hospital said: 'We are pleased to be leading the way in bringing these novel immune therapies to patients in the UK. Brain cancers are some of the most lethal cancers, and there is a great need for new and better treatments.

'The positive data from the clinical trials in the US were very encouraging in delaying disease progression and extending survival times, without significant toxic side effects. We are hopeful that similar results will be seen in the large, randomised clinical trial which we are now helping to bring to the UK.'

King’s sees and treats hundreds of Glioblastoma patients each year, many of whom are in their 40’s and 50’s. Symptoms of Glioblastoma include severe headaches, nausea, vomiting, fits, dizziness and speech problems.

Farzin Farzaneh, Professor of Molecular Medicine and head of cGMP cell product manufacturing at King’s College London, said: 'We are excited to be undertaking the manufacture of the vaccine here at King’s. Such immune therapies represent an exciting new class of products, and we are pleased to apply our expertise and facilities for cell therapy to help bring DCVax® immune therapies to the UK and to collaborating centres in Europe.'

DCVax® is a personalised immune therapy developed by US company Northwest Biotherapeutics. 

Patients interested in being involved in the trial can email patients@nwbio.com for further information.

For further information about King’s, visit our ‘King’s in Brief’ page.

View the original article here

£1.3m grant for epilepsy self-management trial

Researchers at King’s College London’s Institute of Psychiatry in collaboration with King’s College Hospital NHS Foundation Trust and Epilepsy Action, have been awarded £1.3m by the National Institute for Health Research Health Technology Assessment (NIHR HTA) Programme, to assess the effectiveness of self-management education for adults with epilepsy.

In the UK 600,000 people live with epilepsy. Despite improvements in epilepsy treatments, 30% of people with epilepsy continue to experience seizures, which may significantly affect their quality of life.

The trial, led by Professor Leone Ridsdale, a neurologist at King’s Institute of Psychiatry, will look at how effective a programme called ‘Self-Management education for adults with poorly controlled epILEpsy’ (SMILE) is in helping those with poorly controlled seizures to learn about dealing with their epilepsy.

Professor Ridsdale says: “People with other long-term conditions, like diabetes, are offered self-learning packages, which have been tested by means of randomized controlled trials. Despite having a long-term condition which can impact severely on their thoughts, feelings and social life, people with epilepsy have not routinely been offered opportunities to learn how to manage their condition in the context of their daily lives.”

The workshops help people achieve a better understanding of the causes of and treatments for epilepsy and identify factors that can help or hinder them improve their own self-management. People become more able to recognise patterns in the occurrence of their seizures and better able to deal with some of the stressful aspects of having epilepsy. People attending the groups hear about and learn from the experiences of other people with epilepsy, and are given a course book containing the information from the workshop as well as other sources of information about living with epilepsy.

SMILE is based on a German programme called MOSES which has been delivered to small groups of patients and carers in some European countries for 13 years. Whilst the programme has been translated into English, the research team recognise that the delivery of the programme needs to be modified, so as to make it relevant and acceptable in the UK context, and evaluated.

The specific aims of the research programme are:

To test the hypothesis that SMILE will lead to improved quality of life, and other outcomes, like participants’ own sense of control of their epilepsy, at 12 months follow-up. To describe users’ views of SMILE, including barriers to participation and the perceived benefits of the intervention. To measure the cost-effectiveness and implications of SMILE for NHS service use.

Margaret Rawnsley, Research Officer at Epilepsy Action, says: “We are delighted to collaborate with King’s College London on this project.  The views of people with epilepsy are an important part of this study. Among other things, we will work with the team to ensure people with epilepsy are involved in the research in a meaningful way. We firmly believe that this study has the potential to benefit people living with epilepsy.”

Professor Laura Goldstein, clinical neuropsychologist at King’s Institute of Psychiatry and co-principal investigator says: "Our study offers the first opportunity in the UK to evaluate this programme systematically. We hope that this exciting research will have a lasting impact and are delighted that Epilepsy Action is working with King’s to develop this."

The research group at King’s includes Professor Paul McCrone, health economist, Professor Sabine Landau, statistician,  Professor Myfanwy Morgan, sociologist of health and Professor Mark Richardson, epileptologist and Head of the Department of Clinical Neurosciences. Up to 20 neurologists in the UK with an interest in epilepsy have agreed to act as local principal investigators inviting their patients to participate. Workshop leaders will include Epilepsy Nurse Specialists and EEG Technicians working at King’s College Hospital NHS Foundation Trust and other centres in SE England.

The research is funded through the NIHR Health Technology Assessment (HTA) Programme with additional support from the King’s College Hospital NHS Foundation Trust and the NIHR Biomedical Research Centre for Mental Health at the South London and Maudsley NHS Foundation Trust and King’s College London.

For further information, please contact Seil Collins, Press Officer, King’s College London, Institute of Psychiatry. Email: seil.collins@kcl.ac.uk or tel: 0044 207 848 5377

National Institute for Health Research Health Technology Assessment (NIHR HTA) Programme

1. The National Institute for Health Research Health Technology Assessment (NIHR HTA) programme funds research about the effectiveness, costs, and broader impact of health technologies for those who use, manage and provide care in the NHS. It is the largest NIHR programme and publishes the results of its research in the Health Technology Assessment journal, with over 600 issues published to date. The journal’s 2011 Impact Factor (4.255) ranked it in the top 10% of medical and health-related journals. All issues are available for download, free of charge, from the website. The HTA Programme is funded by the NIHR, with contributions from the CSO in Scotland, NISCHR in Wales, and the HSC R&D Division, Public Health Agency in Northern Ireland.www.hta.ac.uk.

2. The National Institute for Health Research (NIHR) is funded by the Department of Health to improve the health and wealth of the nation through research. Since its establishment in April 2006, the NIHR has transformed research in the NHS. It has increased the volume of applied health research for the benefit of patients and the public, driven faster translation of basic science discoveries into tangible benefits for patients and the economy, and developed and supported the people who conduct and contribute to applied health research. The NIHR plays a key role in the Government’s strategy for economic growth, attracting investment by the life-sciences industries through its world-class infrastructure for health research. Together, the NIHR people, programmes, centres of excellence and systems represent the most integrated health research system in the world. For further information, visit the NIHR website (www.nihr.ac.uk).

View the original article here