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The government is a special adversary, with unique powers and vulnerabilities. Sullivan’s Government Investigations & White Collar Defense Group focuses on those crucial matters in which government agencies are our clients' adversaries.

At the core of the group is a team of seasoned investigative, trial and appellate attorneys, including former federal prosecutors, other former government attorneys and tax attorneys, who offer substantial experience derived collectively from many hundreds of investigations, regulatory actions and prosecutions. The Group works both on high-profile matters and on those in which a key priority is avoiding publicity.

Representative Client Work

  • Internal corporate investigations in a variety of industries, including financial services, technology, health care, telecommunications, manufacturing, business services and not-for-profit
  • Obtained the dismissal of all securities fraud and other criminal charges pending against a trading specialist in the Eastern District of New York
  • Successfully represented numerous targets of tax investigations and controversies involving in total billions of dollars in alleged tax obligations
  • Sued state Attorney General for use of false adverse publicity against client, obtaining valuable consideration in a prompt settlement
  • Successfully represented numerous directors and officers in response to SEC investigations
  • Obtained dismissal of assault charges against a celebrity and the sealing of all charges against him
  • Won a motion to suppress and the dismissal of all charges in a federal criminal prosecution in the District of Massachusetts
  • Successfully represented a leading national electronics retailer in quashing investigative subpoenas seeking customer information
  • Obtained dismissal of false statement claims brought by the Office of the Attorney General based on allegations of related-party transactions
  • Obtained reduction of charges from felonies to misdemeanors for professionals in matters ranging from alleged computer hacking in New Hampshire to alleged theft from a charity in New York
  • Represented a Japanese chemical company accused of price-fixing and exposed to penalties in excess of $100 million, resolved at a tiny fraction of that on the most favorable terms of any target
  • Representation of subjects and targets of high-profile “options backdating” and Ponzi-scheme investigations
  • Represented high profile asset manager in connection with investigation concerning the Bernie Madoff Ponzi scheme
  • Obtained a dismissal of environmental "whistleblower" complaints filed with federal and state authorities by disgruntled former employee of equipment components manufacturer
  • Defended a chemical manufacturer against U.S. EPA’s environmental clean-up and cost recovery claims involving contaminated watershed and surrounding property, and serving as co-counsel in private party and government CERCLA litigation
Viewpoints
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FINRA’s Small-Cap Sweep: Strategic Steps for Broker-Dealers
It has been approximately one (1) month since the Financial Industry Regulatory Authority (FINRA) has launched a targeted review of broker-dealer activity in small-capitalization offerings involving foreign issuers—particularly those with operations in foreign jurisdictions such as China. The scope of the review extends across both public and private offerings of small-cap exchange-listed issuers and applies to firms that have acted as underwriters, bookrunners, syndicate or selling-group members, placement agents, or engaged in follow-on trading or omnibus account activity. For broker-dealers active in this market segment between January 1, 2023, and September 30, 2025, this initiative warrants immediate attention. FINRA’s focus underscores the need for firms to proactively strengthen compliance, supervisory and due-diligence frameworks before scrutiny is initiated. Implications for Broker-Dealers For broker-dealers that have acted in offerings of foreign-issuer small-cap companies, or engaged in corresponding trading, the risk of regulatory inquiry is now heightened. Firms should assume that FINRA may request detailed documentation of supervisory procedures, training materials, due-diligence records, compensation arrangements, and transaction lists. Potential exposure encompasses both the underwriting/placement side and the secondary trading side, particularly where omnibus accounts or affiliate-linked trading have occurred. Moreover, compliance weaknesses in this area may expose firms to broader regulatory focus given FINRA’s emphasis on market integrity and manipulative trading risks in small-cap IPOs. As a result, firms should view this not simply as a matter of historical transactions but as an active compliance priority for present-day operations and future offerings. Strategic Compliance Priorities and Action Plan Broker-dealers should undertake an immediate, firm-wide review of their involvement in relevant small-cap foreign-issuer offerings. This review should begin with an inventory of all transactions, public or private, in which the firm acted as underwriter, bookrunner, syndicate or selling-group member, placement agent, or participated in secondary trading during the relevant period. Firms should review whether their written supervisory procedures (WSPs), compliance manuals, training materials and internal guidance adequately address the risks particular to small-cap foreign-issuer offerings. This includes controls around due diligence of issuers, audit-firm and management backgrounds, beneficial-owner structures, cross-border legal/regulatory risks, syndicate compensation, and trading after the offering. Surveillance systems and trading desk controls should similarly be assessed to ensure they capture unusual trading patterns consistent with manipulative or coordinated activity. Firms should evaluate whether their AML/KYC programs are appropriately scaled to the enhanced risk of foreign issuers and thinly-traded securities, and whether their vendor-risk frameworks adequately cover third-party trading platforms, omnibus accounts, and algorithmic or remote trading tools. From a governance standpoint, senior management, compliance heads and the board should elevate this matter within their risk-assessment frameworks. Firms should consider whether internal audit scopes and independent reviews cover this business line, whether incentives or compensation structures may have encouraged participation in higher-risk offerings, and whether escalation procedures are clearly defined and monitored. Finally, firms should prepare for regulatory engagement by gathering and organizing deal files, training logs, supervisory review documentation, compensation records and transaction lists now, rather than waiting until a request arrives. Key Takeaways The targeted review by FINRA of small-cap foreign-issuer offerings signals a clear regulatory priority and a call to broker-dealers to raise their vigilance. For firms with exposure in this area, now is the time to act. Waiting until after a request is received may leave a firm scrambling and vulnerable to findings of deficient controls or documentation. The themes underpinning the review—cross-border risk, thin-traded securities, manipulative activity, and weak controls—are broader than the specific focus and should prompt firms to proactively enhance controls across the board. Senior leadership should not view this as a niche compliance issue, but rather as a signal of elevated scrutiny across multiple lines of business. With proper preparation, firms can not only respond to potential regulatory requests but demonstrate a thoughtful, forward-looking compliance program aligned with the evolving risk landscape.
FINRA Launches Targeted Review of Small-Cap Foreign Offerings
The Financial Industry Regulatory Authority (FINRA) has announced a targeted review of broker-dealers involved in small-cap initial public offerings (IPOs) and related transactions for companies based in foreign jurisdictions, such as China. The review signals increased regulatory scrutiny of potential stock manipulation risks, cross-border due diligence practices and overall compliance controls within the small-cap market, which includes broker-dealers and ultimately issuers whose stock trades on U.S. exchanges. Overview FINRA’s latest initiative underscores the regulator’s focus on potential market-abuse risks tied to foreign small-cap listings. While FINRA has not specified the impetus for the sweep, the timing aligns with publicly announced emphases on cross-border enforcement efforts. The SEC, which oversees FINRA, announced in September the formation of a task force to combat cross-border fraud and securities-law violations in jurisdictions “where governmental control and other factors pose unique investor risks,” explicitly citing China. Earlier this year, Nasdaq proposed increasing the threshold size of IPOs for Chinese companies, including issuers based in Hong Kong and Macau, to $25 million, versus $15 million for other issuers. According to FINRA, the review targets member firms that participated in multiple small-cap offerings, defined as IPOs raising $25 million or less and priced between $4.00 and $8.00, between January 2023 and September 2025. The inquiry also extends to follow-on offerings and private placements linked to those transactions. Focus Areas FINRA has requested detailed information from firms that served as underwriters, bookrunners, syndicate members, selling group members, or placement agents in the identified offerings. The regulator is seeking documentation that addresses: Due diligence, insider trading and anti-money-laundering (AML) compliance policies, including internal training materials; Supervisory procedures related to cross-border offerings and compliance with SEC Regulation M and FINRA Rule 5210; and Comprehensive transaction records, including all professional participants (e.g., auditors, legal counsel and internal approvers). FINRA’s emphasis on documentation, deal structure and related-party identification indicates a broader assessment of firms’ governance and risk-management frameworks around small-cap and foreign issuer activity. Takeaways for Broker-Dealers Firms active in small-cap or foreign offerings should take immediate steps to assess their exposure and confirm the effectiveness of their compliance controls. Recommended actions include: Reviewing recent and pending small-cap transactions to determine whether they fall within FINRA’s stated parameters. Evaluating supervisory systems, due diligence processes and deal-approval workflows for coverage of cross-border risks and compliance with Regulation M and FINRA Rule 5210. Reviewing annual AML testing results to ensure trading surveillance programs, including alert thresholds, omnibus account oversight and escalation protocols, are effectively in place and reasonably designed to identify and address red flags. Preparing responsive documentation proactively to facilitate timely engagement with FINRA if contacted. Looking Ahead FINRA’s targeted review is part of a broader regulatory trend emphasizing cross-border transparency and control effectiveness. Firms with recurring involvement in small-cap or foreign offerings should anticipate heightened scrutiny from both FINRA and the SEC and ensure that their regulatory and compliance frameworks align with evolving expectations. Sullivan’s Small-Firm Task Force is advising clients on responding to FINRA requests and enhancing compliance programs to withstand heightened scrutiny in this area. The Task Force, comprised of lawyers from the firm’s transactional capital markets, regulatory compliance, and white collar/government investigations practice groups, will use its multidisciplinary approach to defend these inquiries and cost-effectively advance the agenda and priorities of the constituencies impacted by the evolving regulatory focus on targeted inquiries in the small-cap market.
Sullivan & Worcester Announces Creation of Small-Firm Task Force to Address Latest FINRA Small-Cap IPO Sweep
New York, NY – Sullivan & Worcester announced today the creation of its Small-Firm Task Force, a dedicated cross-disciplinary team designed to support small to mid-sized broker-dealers in navigating the review announced by the Financial Industry Regulatory Authority (FINRA) of firms’ practices relating to public and private offerings of small-capitalization, exchange-listed issuers with business operations in foreign jurisdictions, such as China. The FINRA announcement targeting small-cap offerings also seeks to review compliance with Reg M and FINRA Rule 5210, governing quotes of securities. Sullivan’s Task Force is intended to assist firms in responding to inquiries and effecting meaningful compliance during the review period and beyond. In light of FINRA’s renewed focus on small-cap issuers that have foreign business operations, the Task Force brings together members of Sullivan’s market-leading Capital Markets, Government Investigations, Regulatory Compliance and Securities Litigation practice groups. The integrated team offers clients comprehensive, practical counsel tailored to helping issuers, underwriters and other market participants assess, mitigate and manage potential risk exposures, compliance obligations and disclosure challenges. Managing Partner of Sullivan’s New York office David E. Danovitch explained the firm’s move: “No sooner than the industry is beginning to stabilize do we see another major sweep and inquiry into matters that have been covered by various agencies over the past several years. We are uniquely positioned to assist firms in responding to these inquiries. Our longstanding practice throughout Asia and our in-depth experience with Reg M issues and related compliance will now be used as a resource to assist firms in responding to these inquiries and review and, if necessary, proactively improve their procedures.” Danovitch, who also maintains his securities licenses at a small broker-dealer, added: “This is a crushing request that covers nearly three years. The market for small-cap offerings has been challenged since early 2022. The markets are just beginning to improve. This is an unfortunate development.” In addition to Danovitch, Sullivan Partners Michael Dyson and Meghan Rohan will round out the Task Force. The creation of the Small-Firm Task Force underscores Sullivan’s ongoing commitment to helping clients navigate complex legal environments with integrated, forward-thinking solutions. For more information about the Task Force, please contact: David E. Danovitch Partner | New York ddanovitch@sullivanlaw.com | 212 660 3060 Michael T. Dyson Partner | Washington, D.C. mdyson@sullivanlaw.com | 202 775 1217 Meghan Rohan Partner | New York mrohan@sullivanlaw.com | 212 660 3040 About Sullivan Sullivan & Worcester (Sullivan) is a global, mid-sized law firm with lawyers in Boston, London, New York, Tel Aviv and Washington, D.C. Sullivan’s clients, including Fortune 500 companies, leading financial services firms and asset managers, boards of directors, real estate companies, and emerging businesses, rely on Sullivan’s ability to navigate complex legal and operational landscapes, the impeccable judgment of its lawyers, and its commitment to best‑in‑class client service.
Sullivan Attorneys Named to 2022 Top Lawyers List by Boston Magazine
Boston, MA - Sullivan is delighted to share that 13 of its attorneys were selected to be included in Boston magazine's 2022 Top Lawyers list. To compile the list, area lawyers were invited to nominate up to three of their peers in a select number of specialties. The top vote-getters in each specialty were then reviewed by an advisory board of select lawyers, chosen for their credentials and the high number of votes they received. The Sullivan attorneys recognized, by specialty, were: Bankruptcy and Workout Amy A. Zuccarello Civil Law Litigation Ryan Rosenblatt Erika L. Todd Commercial Litigation Patrick P. Dinardo Laura Steinberg Corporate Counsel Lewis N. Segall Land Use Environment Victor N. Baltera Real Estate Ashley H. Brooks Tax Law Richard L. Jones David A. Guadagnoli Amy E. Sheridan Trusts and Estate Rosemary Wilson About Sullivan Sullivan & Worcester (Sullivan) is a leading AmLaw 200 law firm with over 200 attorneys in Boston, London, New York, Tel Aviv and Washington, DC. Sullivan’s clients, including Fortune 500 companies and emerging businesses, rely on Sullivan’s strategic vision, comfort with complexity and intense focus on results. As a global law firm, Sullivan’s reach extends beyond the United States. Sullivan has represented clients around the world and has a deep bench for working on a variety of matters and issues affecting clients globally.