Summer 2003 – Issue 66 - Stanford Lawyer - Stanford University

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14 NICKI LOCKERSUMMER2003her elegant St. John suit, with Peter Pan lapels, that complementsher piercing green eyes. Her talk concentrates on thesubject that is on everyone's mind: "How to get off theSEC's radar screen." There's no easy answer, she warns,noting that even companies in compliance with GenerallyAccepted Accounting Principles have found themselvesbefore the SEC. She urges companies to implement systemsto detect fraud. That would include, for instance, a quarterlyreview of all deals in which the company is both buyingfrom and selling to the same partner. And she cautionsagainst Degenhardt's advice to drop by immediately afterreceiving his cal!. "You don't go by there until you've donesome type of investigation," she says. The company needs toknow beforehand how serious the problem is, as well as todemonstrate its intent to get to the bottom of it, she adds.The respect Locker shows to the SEC is typical of herstyle-and an important new trait for lawyers handlingtoday's securities cases. The relationship between plaintiffs'N"icki Locker was certainly bright. She graduated fromYale College summa cum laude in a special major shedesigned herself (law and ethics in medicine) and was electedto Phi Beta Kappa. In her senior year, it appeared that shewould fulfill her mother's dream. She was accepted into thejoint MDI]D program at Duke University and was ready togo until she had a sudden revelation. "I didn't like to look atblood," she says.Locker grew up in Queens, and she has the accent toprove it. Her mother was the general counsel at QueensCollege. Her father, a mechanical engineer, was a nationalhandball champion. Locker was an all-city field hockey playerand a member of the tennis team at Yale. She recently rana marathon and is now training to do a triathalon.For law school, Locker decided that she needed to getaway from the East and enrolled at Stanford. She was a clerkto Anthony Kennedy, at that time a Judge on the U.S. CourtofAppeals for the Ninth Circuit (now a Justice on the"I think this work is a blast," says Lockerand defense lawyers in securities litigation has traditionallybeen as contentious as any in a profession that has in recentyears lost much of its civility. "You see lawyers on both sidesmaking extreme arguments," notes Robert Gans, a plaintiffs'lawyer who has been litigating against Locker for three yearsin a case involving the company Network Associates. Manyplaintiffs' lawyers believe that corporate executives are out todefraud shareholders, and many corporate hlwyers see allshareholder lawsuits as frivolous, he says. "Nicki isn't one ofthose," he adds. "Aside from being an excellent lawyer, she'sa straight shooter-she doesn't hide the bal!."Such credibility is of particular importance now, becauseresolving cases involves a greater amount of collaborationbetween the two sides. It's no longer enough to simply getthe case dismissed or have the insurer payout a settlement.Increasingly, the company must work with the parties bringingthe action to show that it has adopted better practices.Grundfest highlights this change in a forthcoming article."Settling entities will have to agree to forms of behaviormodification that will promote 'good governance' agendasand provide for active monitoring designed to assure thatwrongful conduct does not recur," he says. "The simpleinjunction commanding 'go and sin no more' will becomescarcer in the evolving enforcement environment."An Unlikely Securities StarNicki Locker was not supposed to be a securities litigator."Every good Jewish mother wants a bright daughter to be adoctor," says Lola Locker, Nicki's mother.Supreme Coun), then joined 'Nilson Sonsini, where she hasstayed her entire career. She married Lionel Boissiere, MBA'85, in 1986, and they have a nine-year-old son, Jacob, and aseven-year-old daughter, Jaye CorioLocker's career is unusual in that she started in intellectualproperty, migrated to commercial litigation, then, as apartner, decided to make her specialty securities litigation, afield in which the finn is renowned. "In lieu of a midlife crisis,she decided to change directions in her career," remarksBoris Feldman, a Wilson Sonsini partner and one of thenation's most highly regarded securities litigators. Few otherlawyers, he says, could have done it: She would put her childrento bed, then read decisions, briefs, and the statutes intothe early morning hours. "In very short order she knew asmuch as any of us," he says.Locker insists that she's not entirely sure why she madethe switch. She says she was drawn to securities litigationpartly because that's where the big cases are, and partlybecause it seemed like a challenge. "I want to be where theaction is," she says. "I like pressure, I like high profile, I likevery intense.\tVhat can I say? I think this work is a blast."And she makes an admission that would raise the eyebrowsof some corporate defense lawyers: "If I weren't at WilsonSonsini, I'd love to work at the SEC."The switch only added to her stature within WilsonSonsini. She has served on the executive and compensationcommittees and was the co-chair of the member nominatingcommittee, which selects new partners. Larry Sonsini, thefirm's chairman, calls her a leader who has a "future in high
NICKI LOCKER 15STANFORDLAWYERlevel management" at Wilson Sonsini.What makes Locker's success all the more remarkable isthat securities litigation remains one of the last male bastionsin the legal profession. For better or worse, there's a machismoto the field, and a widespread perception remains thatwomen face a tougher time being rainmakers in such highstakecases, says Feldman. Locker, however, has managedto build a strong client list, including Agilent Technologies,Guidant, 12 Technologies, Juniper Networks, NetworksAssociates, and Veritas Software, among others.Settling with ReformsNo case has done more for Locker's reputation for being onthe leading edge of securities litigation than a giant shareholderlawsuit charging that the stock prices of several hundredinitial public offerings were fraudulently inflated. Itinvolves 309 companies that went public and the 55 brokeragefirms that underwrote the offerings. There are dozensof defense lawyers on the case, but Locker represents moreissuers than anyone else-50 high-tech companies-and shewas one of the two defense lawyers for the issuers who presentedoral arguments in the case.After U.S. District CourtJudge Shira A. Scheindlindeclined to dismiss the claims, Locker and the other lawyersrepresenting the issuers worked with the insurance companiesto hammer out a proposal for an unprecedented settlement,guaranteeing to pay investors $1 billion if the plaintiffsAssuming the settlement goes through, it will be a coupfor the issuers. The guarantee would average out to roughly$3.3 million per issuer, to be paid-if at all-by the insurers."The issuing companies probably view Nicki as a hero," saysGrundfest. "It may get them out of this complex litigationwithout having to dig into corporate pockets."The deal, however, is also significant for what it showsabout corporate defense lawyers being willing to step up andreform corporate practice. Whether the issuers publiclyaccept the plaintiffs' argument that they should have beenaware of the alleged stock manipulations by the underwriters,the settlement places the issuers in the position ofadding pressure to the underwriters to improve their practices.Ne71' York Times reporter Gretchen Morgenson writesthat the proposed settlement creates an incentive for thecompanies to assist the plaintiffs' lawyers in their actionagainst the Wall Street firms. Locker says it's too soon to saywhether that incentive will lead to any action. But MelvinWeiss, the lead lawyer on the other side, told Morgensonthat the agreement would require issuers to provide documentsand other support to the shareholder lawyers.The IPO case is unique among securities cases in itsscale and its focus on public offerings. But even in more typicalcases, Locker has demonstrated an ability to win for herclients, while also improving corporate practices. Take herrepresentation of Network Associates, a company that hadacknowledged problems in its accounting and had restated"The issuing companies probably view Nicki as a hero,"says Law Professor Joseph Grundfestdo not win at lcast that much from the underwriters. "This isthe mother of all securities settlements," remarks JeffRudman, a partner at Hale and Dorr who serves with Lockeron the steering committee of lawyers representing the issuers.The settlement proposal, which has yet to be approved,is not the work of one lawyer, but Rudman describes Lockeras invaluable in working through the "endless negotiations"with insurance lawyers and plaintiffs' lawyers. "If there's asemicolon missing on page 42, she'll find it," he says. Andshe made sure that the very complicated formulas in the dealwere not obfuscated in jargon, but spelled out clearly. SaysRudman: "Other folks in the room might be abashed at saying,'I don't know what this means,' but Nicki would interrupt,'Look fellows, I know you're all geniuses, but whydon't you explain it to me, because I know I'm not stupid.'"(One colleague refers to Locker as Columbo with a St.John's wardrobe.) The problem often wasn't with Locker,but with a clause that didn't make sensc.its earnings and revenues.Locker and other lawyers at Wilson Sonsini aggressivelyfought a class action lawsuit against their client, and in Marchthey succeeded in having a large portion of the fraud claimsdismissed. The briefs highlighted her encyclopedic grasp ofthe facts. They persuaded the judge, for instance, that theplaintiffs' confidential witnesses didn't have the basis toknow the information that they had provided the plaintiffs.And the judge was also convinced that the complaint's allegationsweren't "sufficiently particularized" to state a claimfor revenue recognition fraud.In the past, such a court outcome would have been sufficientrepresentation for a corporate attorney, but Locker didmore. She scrutinized the company's operations, and, in theareas where it did not meet best practices, she worked withthe new management to make improvements. Kent Roberts,general counsel at Network Associates, says that the first fewtimes he met her, it didn't feel like she was working for him,
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