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Keker & Van Nest Partner Stuart Gasner Wins Appeal on Behalf of Former ESSI Exec

Law 360

The Eighth Circuit on Tuesday upheld the dismissal of a securities suit attempting to hold a former Engineered Support Systems Inc. director liable for a disclosure violation concerning backdated stock options issued to executives.

The appeals court agreed with the district court that the U.S. Securities and Exchange Commission provided little evidence that ESSI Outside Director Michael Shanahan Jr.'s approval of the options contradicted company representations and constituted material misstatements or omissions in connection with the sale of securities.

Stuart Gasner of Keker & Van Nest LLP, an attorney for Shanahan, hailed the ruling as a proper check on regulators that had become overzealous in options backdating cases.

“The decision marks a fitting end to this chapter of SEC enforcement — an enforcement program that went too far in my opinion,” Gasner told Law360 on Tuesday.

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