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For some lawyers, stepping in front of a company’s board can feel like entering a shooting range — you never quite know if it’s going to be open season on you. But it seems like it’s second nature to William Baker III. So observes Todd Buchardt, general counsel at Voyager Learning Co. (formerly ProQuest). Buchardt looked to Baker to help manage board members’ expectations — and to give sound legal advice — while the digital information company was in the midst of a Securities and Exchange Commission investigation into accounting irregularities. The investigation began in 2006 and is still ongoing. Not long after the SEC got started, the company was also hit by several class actions. “Bill was good about managing expectations from a timing perspective,” says Buchardt. “Commercial people think when you say the next step will happen quickly, it means now. Bill was able to tell them that SEC time is a little different. Maybe 60 days, but in fairness that’s quick.” When it comes to explaining how the SEC works, no one knows better than Baker, a partner in the D.C. office of Latham & Watkins. He didn’t start out seeking securities law expertise. After finishing law school and a U.S. district court clerkship, Baker moved to Washington to work as an associate in Baker & Hostetler’s antitrust practice. But he wasn’t that enthusiastic about antitrust, and he noticed that the SEC’s Division of Enforcement was very active. “I thought I would go there for a year or two and figure out what I wanted to do and have some fun,” he recalls. Fifteen years later, he had risen to associate director of the Enforcement Division. During his tenure at the SEC, Baker led some high-profile investigations, including one that led to a $195 million settlement with 21 securities firms and the National Association of Securities Dealers and another into the business debacle of WorldCom Inc. Some of those investigations involved multiple agencies — an experience that now helps Baker in the private sector. “He is able to weave a common defense that is not always SEC-specific,” explains Jay Dalton, senior vice president and general counsel of Willbros USA Inc. Last year, parent company Willbros Group reached an agreement in principle with the SEC and the Justice Department to settle investigations into possible violations of the Foreign Corrupt Practices Act. Willbros will pay penalties and disgorgement of $32.3 million. Baker left the SEC after the WorldCom case, jumping to Latham & Watkins in 2003. While the firm had a strong securities practice on the West Coast, Baker was brought on to build up the SEC enforcement practice in Washington. He quickly proved his mettle. Just weeks after joining Latham & Watkins, Baker got a call from a good friend to represent a senior officer at HealthSouth Corp. While the SEC smelled blood in the massive accounting fraud at HealthSouth, Baker was trying to ensure that his client wouldn’t be charged. Ultimately, he was able to persuade the SEC that his client was a victim of a corrupt system. “It was an eye-opening experience seeing things from the other side,” says Baker. He has also become the lead attorney representing long-time Latham client Bally Total Fitness Corp. in several matters relating to accounting errors. He has counseled the company through SEC and Justice Department investigations along with several private class actions. In February, Bally said that it had reached a settlement with the SEC over certain financial restatements. Bally will not pay any monetary penalty. But the SEC investigation continues, and Baker is still working on it for Bally. “They had what seemed to be a relatively small accounting issue, which ultimately proved to be much larger,” says Baker. While Baker largely handles SEC enforcement cases, he also spends considerable time counseling companies on disclosure issues — essentially getting ahead of any problem. He explains, “I think you have to make them understand the importance of cooperating with the government while not necessarily surrendering everything.”

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