Date: April 21st, 2018 9:55 PM
Author: Demanding Galvanic Toaster
SEC Lawyer Scott Friestad, Bedridden With Cancer, Kept Working Until His Final Days
Iowa-born attorney was a low-key mentor and admired stalwart in agency’s enforcement division
By James R. Hagerty
April 20, 2018 10:30 a.m. ET
4 COMMENTS
For the last several months of his life, as he was dying of cancer, Scott Friestad was mostly confined to bed and unable to go into his office in Washington at the Securities and Exchange Commission. So Mr. Friestad worked from bed, advising his colleagues on matters he was overseeing as an associate director of the agency’s enforcement division. Having only recently retired his BlackBerry , he relied on an iPhone.
The SEC is often a temporary stop for lawyers who then go into private practice, frequently to defend corporations from the agency. Mr. Friestad, an Iowa native, stayed for 23 years. Colleagues said he relished the work and was a widely admired mentor.
“He didn’t pound the table and try to get the highest penalty; he tried to get to the right outcome,” said Daniel Hawke, a former SEC colleague who is now a partner at the law firm of Arnold & Porter in Washington.
Stephanie Avakian, a co-director of the SEC enforcement division, described him as low-key and a good listener. “He seemed to always have good ideas about the way out of a problem,” she said.
Mr. Friestad died April 4 at his home in Fairfax, Va. He was 55 and had been suffering for years from urothelial cancer.
One of his cases zeroed in on Amazon.com. The SEC found that Amazon had redrafted a document allowing another internet retailer, Ashford.com, to improperly defer expenses and avoid missing a forecast for quarterly results. Amazon and Ashford weren’t fined but agreed to a cease-and-desist order. The case became a model of how the SEC could pursue companies for contributing to wrongdoing at other firms, said Linda Thomsen, a former SEC enforcement director who promoted Mr. Friestad while he was on her team.
He also helped lead a case against Merrill Lynch & Co. The SEC said the securities firm used internal information about its clients’ stock trading to help Merrill traders make profitable trades for the firm’s own account. Without admitting or denying wrongdoing, Merrill agreed in 2011 to pay $10 million to settle the accusations. The firm also took steps to separate proprietary trading from client trading.
“One of our goals in a case like this is to make sure that the problems we find are fixed going forward,” Mr. Friestad said at the time.
In one of the last cases he oversaw, foreign affiliates of the accounting firms KPMG, Deloitte Touche Tohmatsu and BDO agreed in mid-March to pay a total of $390,000 to settle SEC allegations that they improperly used other firms to help them audit a South African company. The SEC found that KPMG’s South African affiliate and a Canadian affiliate of BDO were the principal auditors of a South Africa-based company, but the two firms relied heavily on work by Deloitte and KPMG firms in Zimbabwe for an audit. Because the Zimbabwe firms weren’t registered with the U.S. Public Company Accounting Oversight Board, the work wasn’t subject to the required regulatory oversight, the SEC said.
Scott William Friestad was born June 8, 1962, and grew up in Johnston, Iowa, a suburb of Des Moines. He was the second of eight children. His father was a superintendent of schools.
The younger Mr. Friestad received a bachelor’s degree at the University of Iowa, where he studied accounting, and earned his law degree at the same school. He worked for the law firms of Streich Lang in Phoenix and Dewey Ballantine in New York before joining the SEC in 1995.
He is survived by his wife, Kimberly Sanders, a teacher, along with their sons Thomas and Wilson, both Eagle scouts. His survivors also include three brothers and four sisters.
He started each workday with the largest size of Starbucks coffee in a double cup. When he didn’t finish it, he saved the rest for the next day.
Write to James R. Hagerty at bob.hagerty@wsj.com
(http://www.autoadmit.com/thread.php?thread_id=3956168&forum_id=2#35891324)