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500Lawdragon Q & A with:Perrie WeinerPerrie Weiner first took an interest in thesecurities markets at the age of 13, when he would listento his father and older brother (both lawyers) talkshop. It’s an interest that has served him well: Weineris international co-chair of the securities litigationpractice at DLA Piper, where he also serves as managingpartner of the Century City office and as a memberof the firm’s executive and policy committees.Weiner is kept busy and energized jumping from onecutting-edge trend of securities litigation to the next.In recent years, Weiner played a lead role in defendingclass-action suits and regulatory actions againstChinese-based companies that entered the U.S. marketsthrough “reverse mergers” – a controversy thathas received significant news coverage.LAWDRAGon: Why have reverse mergers posed theseregulatory complications?PERRIE WEINER: While there is nothing inherentlyproblematic with Chinese Reverse Mergers, indeed thevast majority of them are sound, the U.S. Securitiesand Exchange Commission (SEC) has identified two primaryregulatory complications. The first relates to thequality of the auditing and financial reporting. In particular,according to a report by the staff of the PublicCompany Accounting Oversight Board (PCAOB), thereis a concern that U.S. auditing firms in certain instancesmay be issuing audit opinions on the financials ofthese companies, but not engaging in much or any oftheir own work. Instead, the U.S. firms may be issuingan opinion based almost entirely on work performed byChinese audit firms....The other regulatory complication, raised andacknowledged by the SEC, is that even though thesecompanies are registered in the U.S., there are limitationson the ability to enforce securities laws, and forinvestors to recover their losses if disclosures are everfound to be untrue.LD: Why has there been such an uptick in the lawsuitsfiled against these types of defendants?PW: The primary reason for the uptick in lawsuits issimply this – the intentionally false or reckless negativeanalytical reports being publicly disseminated byself-proclaimed “analysts” who are shorting the stockin the very companies about which they are reporting.Plaintiffs’ class action lawyers, then, essentially republishthose reports by cutting and pasting them intosecurities class action or derivative action complaints.Those unverified accusations and conclusions common-bY John rYanly form the basis of the purported fraud allegations inthe complaints. It’s a very profitable cottage industrythat has developed over night, for both analysts andplaintiffs’ class action lawyers, alike.LD: What are the challenges of these cases separatefrom other securities litigation cases?PW: Perhaps the greatest challenge is the need to bridgethe cultural divide. And, that applies equally with respectto our China-based clients, as well as with the SEC,FINRA and plaintiffs’ counsel that we interface with.Many China-based companies, and their managementteams, didn’t undergo the learning process ofwhat it means to be a public, reporting company in theU.S. before they became public. Moreover, U.S. basedlitigation appears to China-based companies to beincredibly invasive. Many companies in China do notunderstand the discovery process of U.S. based litigation,and what it takes to defend a U.S. securitiesclass or derivative action successfully, much less anSEC and/or FINRA investigation.The more I explain the process to new clients andhear myself speak, the more I’ve come to realize howtruly invasive and burdensome the U.S. litigation processis. Too many lawyers lack the necessary empathy.LD: Have you always practiced in securities litigation?PW: My earliest years, following a federal judicialexternship and then clerkship in the central district ofCalifornia, involved handling a wide variety of casesincluding complex commercial, banking, products liabilityas well as the more traditional forms of securitieslitigation. I soon narrowed my focus, primarily, tosecurities litigation. To keep things interesting andfresh, I carved several niches in this practice areaalong the way, and have enjoyed an extremely diversified,broad based securities practice, including hedgefund litigation, options back dating litigation, mortgagebacked securities litigation, Reserve Fund litigation,Auction Rate Securities litigation, “pay to play”litigation, as well as the more traditional “stock drop”types of securities cases, etc.There is a very strong regulatory component to mysecurities practice, as my team and I handle a largenumber of cases opposite the SEC, U.S. Attorneys’Office, A.G.’s office, FINRA, etc. I also balance thiswith a fairly large consumer class action practice onbehalf of a number of institutional clients. It’s incrediblydiversified, and a true international practice.See the full Q&A at www.lawdragon.com/lawyer-limelights/perrie-weiner.L A W D R A G O N 172 I s s u e 13Photo by: Dave Lauridsen