Stephen T. Olson

Gibson Dunn is advising Gyre Therapeutics, Inc., an innovative, commercial-stage biopharmaceutical company dedicated to advancing fibrosis-first therapies across organ systems affected by chronic diseases, on its acquisition of Cullgen Inc. The all-stock transaction is valued at approximately $300 million.~~Our corporate team includes partners Branden Berns and Ryan Murr and associates Evan Shepherd, Lauren Navarro, Hunter Michielson, and Lauren Romagnoli. Partners Pamela Lawrence Endreny and Rachel Kleinberg and associate Elizabeth Johnson are advising on tax aspects, partner Bradley Smith is advising on antitrust aspects, partner David Wolber is advising on international trade aspects, and partner Sean Feller is advising on benefits.~~~~Download PDF~~

Mar 3

1 min

Nearly two dozen former U.S. Securities and Exchange Commission attorneys are among those urging the U.S. Supreme Court to put an end to the agency collecting disgorgement from those accused of wrongdoing without first identifying victims of the alleged fraud at hand. The attorneys, who include Gibson Dunn & Crutcher LLP partner Michael Piazza and Dickinson Wright PLLC's Jacob Frenkel, said the SEC's current view of disgorgement "risks eroding the very rule of law they once worked to uphold." Nick Morgan of Investor Choice Advocates Network, himself a former SEC attorney, filed the brief on behalf of his fellow attorneys on Monday. He said in a post on ICAN's website Tuesday that the Supreme Court "has the opportunity to force the agency back inside the boundaries Congress drew." "Congress gave the SEC the tools it needs to hold bad actors accountable," Morgan said in the post. "The problem is that the SEC has been reaching past those tools to avoid the work they require." The attorneys argued in the brief that the remedy the SEC is seeking against Ongkaruck Sripetch and other alleged fraudsters is a civil penalty, which requires the agency to give defendants an opportunity to defend themselves before a jury. "Disgorgement untethered from investor harm serves no restorative function; it punishes and deters, making it functionally identical to a civil penalty," the attorneys said. The SEC declined to comment Tuesday. Sripetch and the SEC both urged the Supreme Court to hear the case after the Ninth Circuit split with the Second Circuit in upholding a $2.2 million disgorgement against Sripetch, who the SEC says profited from a pump-and-dump scheme involving at least 20 penny stock companies. The Ninth Circuit acknowledged the split in its ruling, saying it disagreed with the Second Circuit's view that disgorgement requires a showing that investors suffered pecuniary harm. The SEC told the justices last year that disgorgement does not solely exist to return money to victims but is also a remedy that ensures wrongdoers like Sripetch aren't allowed to keep the profits from their wrongdoing. Frenkel of Dickinson Wright told Law360 on Tuesday it is not always true that the people from whom the SEC seeks disgorgement have been accused of any wrongdoing. He said he has a client who is facing a $44,000 disgorgement order due to alleged misconduct by her ex-husband despite never having identified any victims. "Any case before the Supreme Court that can curtail further the SEC's rampant abuse of disgorgement and pre-judgment interest cries out for weighing in to advocate for reinforcing and expanding the equitable requirements the Court established in Liu," Frenkel said in an email, referencing the last time the high court limited the SEC's disgorgement powers in 2020 in Liu v. SEC. Piazza of Gibson Dunn didn't immediately respond to a request for comment. In addition to the brief filed by the former attorneys, Sripetch also received the backing Monday of the U.S. Chamber of Commerce and the Cato Institute. Both organizations said the court determined in Liu that not only must a disgorgement award be limited to a wrongdoer's net profits, but that it also must also be "awarded for victims." "Clarifying that the SEC must show victims suffered losses to seek disgorgement, as the court should, would reaffirm the broader principle that narrowly interpreting grants of executive power is necessary to ensure fidelity to the rule of law and prevent executive overreach," the Cato Institute said in its brief. The SEC and any supporters of the agency's position have yet to file their briefs before the high court. The high court is scheduled to hear oral arguments in the case on April 20. The former SEC attorneys are represented by Nicolas Morgan of ICAN. The Cato Institute is represented by H. Hunter Bruton, John Gibbons and Noel Hudson of Smith Anderson Blount & Jernigan LLP. The Chamber of Commerce is represented by Janet Galeria and Matthew P. Sappington of the U.S. Chamber Litigation Center, and Adam G. Unikowsky and Daniel S.G. Schwei of Jenner & Block LLP. The SEC is represented by D. John Sauer of the U.S. Office of the Solicitor General, and by its own Jeffrey Finnell, Tracey Hardin, Daniel Staroselsky and Kerry Dingle. Sripetch is represented by Daniel L. Geyser and Michael Qian of Haynes Boone, and Kenneth P. White and Tyler Creekmore of Brown White & Osborn LLP. The case is Sripetch v. Securities and Exchange Commission, case number 25-466, in the Supreme Court of the United States.

Mar 3

3 min

The SEC enforcement action highlights the agency’s continuing scrutiny of valuation practices and disclosures by private fund sponsors of illiquid investments.~~The Securities and Exchange Commission (the SEC) recently announced a settled enforcement action that highlights the agency’s continuing scrutiny of valuation practices and disclosures by private fund sponsors of illiquid investments. On February 25, 2026, the SEC settled claims against a formerly registered investment adviser and private fund manager (the Adviser) concerning the sufficiency of established fair valuation procedures for principal sales of loans to private fund clients (the Funds) during a brief period of extreme market dislocation at the beginning of the pandemic. Without admitting or denying the SEC’s allegations, the Adviser agreed to settle to negligence-based violations and a $900,000 penalty.[1]~~Key Takeaways:~~The SEC Order:~~According to the SEC’s Order, the Adviser, based in Chicago, originated certain senior loans using proprietary capital, typically held the loans for 30–60 days, then sold portions of such loans to the Funds. The advisory agreements with the Funds and the private placement memoranda stated that the Adviser would sell loans to the Funds at “fair value” or “fair market value” as reasonably determined by the Adviser without any third party valuation and on terms “no less favorable to [the Funds] as the terms [they] would obtain in a comparable arm’s length transaction with a non-Affiliate.”~~The Order outlines the key components of the Adviser’s valuation policy and practice:~~The loan sales at issue in the SEC’s Order occurred during a very narrow time period at the beginning of the coronavirus pandemic: March 2020 through May 2020. During this period, the Adviser sold portions of loans to the Funds that it had originated before the start of the pandemic at par value less the unamortized loan fee, consistent with the written valuation policy and prior practice. According to the Order, in light of the unusual market conditions, the Adviser should have done more to confirm that loans were being sold at fair value: “between March 2020 and May 2020, at the start of the coronavirus pandemic, during a period of disruption in U.S. financial markets, [the Adviser] continued to sell performing loans it originated before the market disruption at par value less the unamortized loan fee and failed to determine the effect of the market disruption on the fair market value of those loans.”~~The order also notes a number of mitigating facts. First, all but one of the loans at issue either continued to perform or were fully repaid by the borrowers. Second, in May 2021, in response to an examination deficiency letter concerning this activity, the Adviser voluntarily reimbursed the Funds over $5 million and made enhancements to its disclosures and policies regarding its loan transfer practices.~~To settle the matter, the Adviser agreed, without admitting or denying, to negligence-based violations of Sections 206(2) and 206(4) of the Advisers Act, and Rule 206(4)‑8, and to pay a $900,000 penalty.~~The Bottom Line:~~This action reflects continued regulatory scrutiny by the SEC’s Divisions of Examinations and Enforcement of valuation practices and compliance with related disclosures by private fund sponsors of illiquid investments (as discussed further in previous Gibson Dunn alerts here and here), particularly in affiliated transactions, and should be of interest to sponsors that warehouse investments on their own account or at a fund with the intent to transfer to a parallel or co-investment vehicle, sponsor continuation funds, lead secondary transactions, pursue a “season and sell” credit strategy, or otherwise engage in principal and other related-party transactions across funds, among other activities. Even where consent is obtained and the subject investment ultimately performs to expectations, the SEC signals an expectation for contemporaneous evidence that affiliate transaction pricing reflects current market conditions rather than defaulting to adjusted cost without further consideration, with a particular focus on sales occurring during a period of market distress or volatility.~~[1] In Re: Madison Capital Funding LLC, Advisers Act Release No. 6948 (February 25, 2026), available at https://www.sec.gov/files/litigation/admin/2026/ia-6948.pdf.~~[2] Although the SEC’s Order states that the Adviser’s sales to the Funds were principal transactions subject to Section 206(3) of the Advisers Act, the Order does not analyze whether the loans constitute “securities.”~~The following Gibson Dunn lawyers prepared this update: Kevin Bettsteller, Marian Fowler, Osman Nawaz, Mark Schonfeld, Lauren Cook Jackson, and Jordan Alston*.~~Gibson Dunn’s lawyers are available to assist with any questions you may have regarding the issues and considerations discussed above. Please contact the Gibson Dunn lawyer with whom you usually work, the authors, or any of the following leaders and members of the firm’s Investment Funds or Securities Enforcement practice groups:~~Investment Funds: Carolyn Abram – Dubai (+971 4 318 4647, cabram@gibsondunn.com) Kevin Bettsteller – Los Angeles (+1 310.552.8566, kbettsteller@gibsondunn.com) Albert S. Cho – Hong Kong (+852 2214 3811, acho@gibsondunn.com) Candice S. Choh – Los Angeles (+1 310.552.8658, cchoh@gibsondunn.com) Shannon Errico – New York (+1 212.351.2448, serrico@gibsondunn.com) Blake E. Estes – New York (+1 332.253.7778, bestes@gibsondunn.com) Marian Fowler – Washington, D.C. (+1 202.955.8525, mfowler@gibsondunn.com) A.J. Frey – Washington, D.C./New York (+1 202.887.3793, afrey@gibsondunn.com) Shukie Grossman – New York (+1 212.351.2369, sgrossman@gibsondunn.com) James M. Hays – Houston (+1 346.718.6642, jhays@gibsondunn.com) Kira Idoko – New York (+1 212.351.3951, kidoko@gibsondunn.com) Duncan K. R. McKay – New York (+1 212.351.2603, dmckay@gibsondunn.com) Gregory Merz – Washington, D.C. (+1 202.887.3637, gmerz@gibsondunn.com) Eve Mrozek – New York (+1 212.351.4053, emrozek@gibsondunn.com) James O’Donnell – London (+44 20 7071 4261, jodonnell@gibsondunn.com) Roger D. Singer – New York (+1 212.351.3888, rsinger@gibsondunn.com) Edward D. Sopher – New York (+1 212.351.3918, esopher@gibsondunn.com) C. William Thomas, Jr. – Washington, D.C. (+1 202.887.3735, wthomas@gibsondunn.com) Kate Timmerman – New York (+1 212.351.2628, ktimmerman@gibsondunn.com)~~Securities Enforcement: Mark K. Schonfeld – New York (+1 212.351.2433, mschonfeld@gibsondunn.com) David Woodcock – Dallas (+1 214.698.3211, dwoodcock@gibsondunn.com) Jina L. Choi – San Francisco (+1 415.393.8221, jchoi@gibsondunn.com) Osman Nawaz – New York (+1 212.351.3940, onawaz@gibsondunn.com) Tina Samanta – New York (+1 212.351.2469, tsamanta@gibsondunn.com) Lauren Cook Jackson – Washington, D.C. (+1 202.955.8293, ljackson@gibsondunn.com)~~*Admitted only in New York; practicing under the supervision of members of the District of Columbia Bar under D.C. App. R. 49.~~© 2026 Gibson, Dunn & Crutcher LLP.  All rights reserved.  For contact and other information, please visit us at www.gibsondunn.com.~~Attorney Advertising: These materials were prepared for general informational purposes only based on information available at the time of publication and are not intended as, do not constitute, and should not be relied upon as, legal advice or a legal opinion on any specific facts or circumstances. Gibson Dunn (and its affiliates, attorneys, and employees) shall not have any liability in connection with any use of these materials.  The sharing of these materials does not establish an attorney-client relationship with the recipient and should not be relied upon as an alternative for advice from qualified counsel.  Please note that facts and circumstances may vary, and prior results do not guarantee a similar outcome.~~Download PDF~~

Mar 3

5 min

Lawdragon~~Lawdragon has named 32 Gibson Dunn lawyers to its list of 500 Global Leaders in Crisis Management. The publication calls these lawyers “the advisors who are the legal world’s emergency responders – when investigators turn their eye to a client, a deal attracts activist activity or an industry goes under the relentless microscope of a class action.”~~Congratulations to: Matt Axelrod, Amanda Aycock, Matt Benjamin, Ryan Bergsieker, Barry Berke, Robert Blume, Michael Bopp, Ted Boutrous, Reed Brodsky, Stephanie Brooker, David Burns, John Chesley, Jina Choi, Collin Cox, Lee Crain, M. Kendall Day, Stuart Delery, Mylan Denerstein, Michael Dore, Patrick Doris, Theane Evangelis, Douglas Fuchs, Brian Gilchrist, Nicola Hanna, Sacha Harber-Kelly, Dani James, Christopher Joralemon, Michael Martinez, Karin Portlock, Orin Snyder, Maurice Suh, and Debra Wong Yang.~~Download PDF~~

Feb 27

1 min

Gibson Dunn advised the underwriters on Targa Resources Corp.’s offering of $1.5 billion of senior notes.~~The firm’s corporate team was led by partner Doug Rayburn and included associates Alexis Levine and Tara Adhikari. Senior counsel Gregory Nelson advised on tax aspects; associate Taylor Cathleen Amato advised on environmental aspects.~~~~Download PDF~~

Mar 3

1 min