Julia Irvine 10 Jan 2019 11:32am

Modesti to defend audit firms against ex-employer

After 14 years as enforcer-in-chief of the US audit watchdog, Claudius Modesti has swapped sides and is to help defend clients of US law firm Akin Gump against the regulators

As a partner in the firm’s white collar defence and government investigations unit in Washington DC, he will be advising accounting firms, regulated entities, corporations and individuals caught up in regulatory investigations and enforcement proceedings involving the US Securities and Exchange Commission (SEC) and the Public Company Accounting Oversight Board (PCAOB).

Modesti's appointment is a coup for Akin Gump since he was the PCAOB’s first enforcement director, responsible for building up the enforcement team from its inception. His experience at the PCAOB leading on more than 100 investigations into US and foreign-based accountancy firms annually, together with his time spent working for the SEC, the fraud section of the Department of Justice’s Criminal Division, and as a federal prosecutor with the US Attorney’s Office for the Eastern District of Virginia, makes him uniquely qualified for his new role.

“Claudius’s extensive enforcement experience involving the regulation and oversight of the accounting and auditing industry represents a significant and distinct addition to our industry leading white collar capabilities,” said Akin Gump chairman Kim Koopersmith.

“His judgment, acumen and broad-based enforcement background will be greatly valued by our clients, and I am delighted to welcome him to Akin Gump.”

Modesti resigned from the PCAOB in May last year along with a number of other senior executives from the leadership team.

The exodus – which at the time left five of the PCAOB’s 12 offices with acting heads and another with a deputy director – followed the arrival of an entirely new board, headed up by new chairman William Duhnke, a former Republican senate staffer.

Commenting on his new role, Modesti said, “I look forward to developing a sophisticated practice at Akin Gump that is focused on auditor defence.

“Combining this with a practice that also centres around securities enforcement and white collar investigations will reap great benefits for the firm’s clients. Akin Gump’s white collar practice is known for being top-tier in the market, and I am excited about the opportunity to play a key role on this highly regarded team.”

Akin Gump is one of the US’s top 20 law firms, employing more than 900 lawyers and with an annual fee income of $1.039bn (£0.814bn). All partners are treated as equal and, according to the latest available statistics, earned $2.386m each in 2017.