In an interesting turn of events, Claudius Modesti, who was the head enforcer at the Public Company Accounting Oversight Board for 14 years before leaving last May, will now be defending audit firms that run afoul of the PCAOB and the Securities and Exchange Commission in his new role with law firm Akin Gump Strauss Hauer & Feld LLP.
Modesti, who was the PCAOB’s first director of enforcement and investigations, has landed at Akin Gump as a partner in the firm’s white-collar defense and government investigations practice in Washington, DC.
This is a big-time hire for Akin Gump. Not only did Modesti have a distinguished career at the PCAOB, where he brought the hammer down on ne’er-do-well auditors, but as an assistant U.S. attorney for the U.S. Attorney’s Office for the Eastern District of Virginia, he led the investigation and prosecution of white-collar crimes, particularly securities fraud. He also worked in the U.S. Department of Justice’s Criminal Division Fraud Section, where he investigated, indicted, and prosecuted white-collar crimes.
“As the one and only PCAOB enforcement director to enter private practice, Claudius has a unique perspective that will resonate strongly with our clients,” Charles Connolly, a partner in Akin Gump’s white-collar practice, said in a statement. “He brings a truly defining quality in how to approach auditor, accounting, and more general SEC enforcement matters. With his substantial experience, Claudius is an outstanding addition to our litigation group, and I am very happy to have him on our team.”
In his new role, Modesti will be tasked with counseling and defending accounting firms, regulated entities, corporations, and individuals in regulatory investigations and enforcement proceedings involving the PCAOB and SEC, in addition to advising on other federal or state criminal investigations, according to Akin Gump.
“I look forward to developing a sophisticated practice at Akin Gump that is focused on auditor defense,” he said. “Combining this with a practice that also centers around securities enforcement and white-collar investigations will reap great benefits for the firm’s clients.”
Modesti joined the PCAOB in 2004 and helped build a team of attorneys and accountants in the enforcement group from scratch. During his tenure, he developed the PCAOB’s policies and procedures for identifying matters for investigation and led more than 100 such investigations annually, many of which involved cross-border audits. He also oversaw the PCAOB’s litigation process.
But Modesti was one of several senior staff members who bolted the PCAOB last year after a new chairman and board were appointed. He told the National Law Journal recently:
“I didn’t expect to be there for more than five or six years and I far exceeded my expectations working through the challenging and interesting work,” Modesti said of his time at the PCAOB. “I thought it’d be a good opportunity at this stage in my career to go for a new challenge.”
The PCAOB still hasn’t filled Modesti’s former position on a full-time basis. Mark Adler is currently acting director and chief trial counsel of the PCAOB Division of Enforcement and Investigations.