Jim Lundy is a partner and litigator within the Securities Enforcement & Litigation Practice Group at Foley & Lardner LLP, based in the firm’s Chicago office. Jim successfully resolves high-stakes enforcement matters by drawing on his deep technical insights and emotional intelligence.
Jim seeks to protect the reputations and stakeholder relationships of his clients under investigation by the Securities and Exchange Commission and other regulatory bodies, leveraging his experience working in the SEC’s Division of Enforcement for almost a decade. Jim spent the last several years of his service with the SEC helping lead the Division of Examinations program for the Midwest region. His clients include public companies and their boards of directors, investment advisers, broker-dealers, hedge and private equity funds, investment banks, futures trading firms, and the leaders of these organizations. He has helped clients resolve high-stakes SEC and other regulatory investigations with no charges filed, and he has lowered enforcement settlement demands by hundreds of millions of dollars. Jim also leads internal investigations; serves as an independent monitor; provides counsel on governance, compliance, and policy issues; handles cybersecurity regulatory investigations; defends clients in complex financial services litigation; and serves as an independent monitor.
Public Companies and Internal Investigations
- Represented a CEO in the automotive industry, concerning an SEC enforcement investigation pursuant to the SEC’s Earnings Per Share Initiative.
- Represented a CEO and company in the logistics industry in a parallel investigation by the SEC and the Department of Justice into the company’s accounting practices after a multiyear restatement that led to the resignation of the CFO and subsequent charges against him and certain other corporate officers. While the CFO was criminally convicted, no charges were filed against the CEO or the company by the SEC or DOJ. Also provided counsel to the company’s board of directors and audit committee throughout the investigative process.
- Led an internal investigation of an international company in the semiconductor industry regarding potential internal control and financial reporting violations due to misappropriations of company funds by an officer of an Asian subsidiary, and provided counsel to the company’s board of directors and audit committee. As a result of the internal investigation, the client self-reported to the SEC, and Jim persuaded them not to pursue an enforcement action.
Investment Advisers, Broker-Dealers, and Other Firm/Fund Work
- Represented the general counsel and chief compliance officer of a private equity fund in an investigation involving the valuations of illiquid assets and complex custody-rule compliance issues.
- Represented a dual registrant in an investigation conducted by the SEC’s Asset Management specialty unit after a referral from the Division of Examinations, and obtained termination notices for both the investment adviser and the broker-dealer, closing the investigation without charges. This was despite the Division of Examinations’ deficiency letter alleging obstruction of justice and securities fraud violations by the firm.
- Represented the chief compliance officer of a large mutual fund complex in an SEC investigation involving trading and valuation issues for certain illiquid holdings of a fixed-income mutual fund. The SEC focused its investigation on the alleged mismarking of bonds to inflate their pricing at the end of a quarter. Based on strategies used at the client’s SEC testimony session and a “white paper” submission, the SEC issued a termination notice closing its investigation without charges.
Futures and Derivatives
- Represented a futures trader affiliated with a futures commission merchant (FCM) in Commodities Futures Trading Commission (CFTC) and CME Market Regulation investigations into the trader’s and the FCM’s practices regarding alleged manipulative trading in certain exchanges of futures for physical transactions. After presenting the trader for interviews and making submissions, the CFTC and CME closed their investigations without taking action against the trader and the FCM.
- Represented a sub-adviser to a mutual fund in an investigation conducted by the SEC’s Complex Financial Instrument specialty unit regarding the client’s derivatives-based hedging strategy. Due to a “black swan” event, the mutual fund suffered almost $100 million ($275 million notional) in losses. Through a series of presentations and other advocacy efforts, persuaded the SEC to terminate the investigation without taking any action.
*Certain of these matters were handled prior to joining Foley.
- Panelist, “Prevention of Misuse of MNPI and Insider Trading: Alternative Data and Expert Networks,” Investment Adviser Compliance Conference (March 14, 2023)
- Panelist, “Arbitrations: From the Starting Gate to the Finish Line,” Futures Industry Association L&C Division webinar (September 22, 2022)
- Quoted, “‘Educators Are Angry’: Equitable’s $50M Penalty Points to Wider 403(b) Problems,” ThinkAdvisor (July 27, 2022)
- Quoted resource, “Advisers should brace for tougher SEC scrutiny of expert networks for MNPI,” Private Funds CFO (July 19, 2022)
- Quoted, “Agenda-driven SEC determined to prevail despite critics’ pushback,” InvestmentNews (July 11, 2022)
- Quoted, “Small Indexers Gird for Potential SEC Rule,” Ignites (July 1, 2022)
- Quoted, “NYC Bar Proposal Could Quell Persistent 'Fear' CCOs Face,” Law360 Pulse (June 9, 2022)
- Quoted, “SEC fines 12 firms total of $292,523 in Form CRS enforcement actions,” Investment News (February 22, 2022)
- Quoted, “Expect Reg BI Enforcement Actions, DOL Rollover Crackdown in 2022,” ThinkAdvisor (January 6, 2022)
- Presenter, “Insider Trading in the Crosshairs: Expert-Network Compliance Best Practices,” webinar (December 15, 2021)
- Quoted, “Surge In Tips To SEC Exposes Gaps In Internal Reporting,” Law360 Employment Authority (November 19, 2021)
- Quoted, “SEC to Require More Admissions of Wrongdoing,” ThinkAdvisor (October 14, 2021)
- Quoted, “SEC's New Enforcement Chief May Bring Wider Net to Reg BI,” WealthManagement.com (July 29, 2021)
- Developer, “Understanding and Avoiding Spoofing Behavior,” FIA (June 30, 2021)
- Quoted, “Companies Scramble To Meet SEC's SolarWinds Info Deadline,” Law360 (June 25, 2021)
- Quoted, “Your advisor might be able to sidestep this federal disclosure rule. That may not be a bad thing, some say,” CNBC Advisor Insight (October 12, 2020)
- Speaker, “SEC Exam Trends, Prep and Expectations,” AIMA May Fund Manager Briefing — Chicago (May 21, 2019)
- Presenter, “Spoofing, surveillance, & supervision,” FIA Law & Compliance Division webinar series (January 17, 2019)
- Quoted, “SEC wants mom and pop investors to weigh in on investment-advice rule,” CNBC “You Money Your Future” (April 19, 2018)
- Quoted, “DOJ, CFTC Spoofing Cases Show Cooperation Running High,” Law360 (January 29, 2018)
- Co-author, “Compliance and Legal Officer Guidelines to Prevent Non-Line Supervisory Liability” (March 2017)
- Chambers USA: America’s Leading Lawyers for Business – Litigation: Securities (2022)
- Federal Bureau of Investigation — Exceptional Service in the Public Interest Award
- Securities & Exchange Commission — Shannon D. Ayers Examination Award of Excellence; Chairman’s Award for Excellence; multiple SEC Director’s Awards; multiple SEC Special Act Awards
- DePaul University College of Law (JD)
- DePaul University (MBA)
- University of Illinois at Urbana-Champaign (BA)
- Association of SEC Alumni (ASECA), Director, 2021–2024
- National Society of Compliance Professionals, Investment Advisers Forum Co-leader (2022)
- Futures Industry Association, Law & Compliance Executive Committee Member, 2018–2020
- Securities Industry and Financial Markets Association (SIFMA)
- Special Olympics Chicago, the Warrior Scholar Project and LINK Unlimited Scholars