SEC's Canellos Returns to Milbank as Shearman Picks Up Orrick Heavyweights
This story originally appeared in sister publication The Litigation Daily.
Wednesday was a day of musical chairs for the New York securities bar. One top securities litigator and government enforcer opted to return to his longtime law firm, while another prominent practitioner landed at his fourth firm in eight years.
George Canellos, who announced his resignation as codirector of enforcement at the Securities and Exchange Commission in early January, is rejoining his old firm, Milbank, Tweed, Hadley & McCloy, as head of global litigation. Canellos' return to Milbank, which ends a monthlong guessing game about his destination, becomes official in mid-March, according to the firm.
Also on Wednesday, Shearman & Sterling announced that Joseph Frank, a well-regarded securities litigator whose active clients include Barclays PLC and Nomura Credit & Capital Inc., has joined the firm from Orrick. He is accompanied by two litigation colleagues, Matthew Craner, deputy securities chair of Orrick's securities litigation and regulatory enforcement practice, and Agnès Dunogué.
Joining the litigators in the move to Shearman are three leveraged finance partners who followed Frank to Orrick in 2011. They are Ronan Wicks, Patrick Flanagan and Jason White.
Canellos, 49, is the top securities enforcer to leave government for private practice since last September, when Wilmer Cutler Pickering Hale and Dorr lured Mark Cahn and Dan Berkovitz from the SEC and the U.S. Commodities Futures Trading Commission, respectively. Since Canellos was appointed SEC New York director in 2009 and then promoted to cohead the enforcement division with Andrew Ceresney in 2012, he's played a leading role in coordinating national efforts to target misconduct stemming from the financial crisis. "He's a rock star," said Jonathan Lindsey, a cofounder of legal recruiter Major, Lindsey & Africa.
Canellos prosecuted some of the agency's highest-profile cases, including insider trading actions against the hedge funds SAC Capital and Galleon Management LP, as well as numerous cases involving the sale of complex mortgage-backed securities. More recently, Canellos cochaired the Justice Department–led RMBS working group that spearheaded the $13 billion mega-settlement with JPMorgan Chase last November. Alongside Ceresney, Canellos successfully pushed for modifications of the SEC's settlement policy, requiring more defendants in some kinds of cases to make admissions of wrongdoing.
Unsurprisingly, Canellos said he received "an unbelievable flurry of interest from some great places" when he began looking for a new post in January. But ultimately, Milbank, the firm he left in 2009, won out. In addition to the many friends he still has there, Canellos said Milbank has "the right combination of next-generation talent in white-collar and securities, it's well-managed, it's big enough to handle the most extensive work for major clients." At the same time, he said, "it's small enough to be nimble and for you to know your partners."
Canellos' connections to the firm go back to his friendship with Milbank's new chair, Scott Edelman. The two began their careers together as litigation associates at Wachtell, Lipton, Rosen & Katz, and both went on to become assistant U.S. attorneys in Manhattan. Canellos served there nine years, winding up as chief of the major crimes unit. Edelman, who moved to Milbank in 1994 after four years in the U.S. attorney's office, convinced Canellos to join him in 2003. "George is going to be a terrific help in dealing with the DOJ, the CFTC and other agencies," said Edelman.
Meanwhile, Wednesday's move by Frank, Craner and Dunogue was the largest litigation lateral group Shearman & Sterling has acquired in recent years. Shearman has been working to build up its securities litigation capabilities, as described in this cover story last year in The American Lawyer. At the time, Shearman's litigation head, Adam Hakki, said that the firm was "focused on what is hot today—securities litigation, white-collar, IP and antitrust in certain jurisdictions."
Combined with four other partner acquisitions by Shearman since last August, Wednesday's additions bump the firm's U.S. litigation practice to 38 partners from 32 last June. Hakki, reached on Wednesday, said that Frank, Craner and Dunogue were attracted to Shearman because of its focus on financial institutions and "the strength of our white-collar practice, which is very complementary to a securities litigation practice."
Frank, 48, has made the rounds at several top litigation firms. After a stint as an associate at Paul, Weiss, Rifkind, Wharton & Garrison in 2003, he joined White & Case as a partner, then jumped to Latham & Watkins in 2006 before making the move to Orrick just three-and-a-half years ago. In his latest gig, he will serve as the global cohead of Shearman's securities litigation and enforcement practice.
In May, Frank beat Marc Kasowitz to win the first dismissal of a mortgage-backed securities repurchase or "put-back" suit in state court in New York on statute of limitations grounds. That win came for client Nomura in a $259 million case. And in 2012, he helped Barclays overcome an injunction bid by the Lehman Brothers estate attempting to block the sale by the bank and Bank of America of a stake in Archstone Enterprise LP to real estate mogul Sam Zell. (Lehman ultimately acquired the stake.)
Orrick trial lawyer and management committee member Peter Bicks said Orrick continues to be in expansion mode in global litigation, pointing out that, since 2012, the firm has added 15 litigation partners in nine offices, and that fully half the firm's lawyers are litigators. "Building this momentum is a top priority for Orrick," he said. "We wish Joe well."