Curriculum Vitae
CHARLES R. LUNDELIUS, JR.
BERKELEY RESEARCH GROUP, LLC
1800 M Street, NW, Second Floor
Washington, DC 20036
Direct: +1 202 480 2684
clundelius@thinkbrg.com
Charles Lundelius, CPA/ABV/CFF is the Managing Director of BRG’s Capital Markets Accounting
Practice, specializing in regulation of and securities trading by broker-
dealers, investment advisers,
hedge funds, insurance companies and banks
and commodities trading by futures commission
merchants. He consults with and provides expert testimony on behalf of clients in the areas of:
• securities, commodity futures and investment management,
• valuation and investment banking, and
• insurance.
Specific engagements for each area are listed on the following pages.
As an expert witness over the past thirty years, Mr. Lundelius has testified in over seventy different
cases. When the United States Securities and Exchange Commission (“SEC”) identified key cases it
brought relating to the 2007 financial crisis, Mr. Lundelius had testified or was asked to testify in three
of those matters.
1
Also, among Mr. Lundelius’ more notable consulting engagements, the SEC
Inspector General asked Mr. Lundelius to lead the team investigating the SEC’s failure to uncover the
Madoff Ponzi scheme.
Mr. Lundelius is a Certified Public Accountant and is Accredited in Business Valuation and Certified in
Financial Forensics by the American Institute of Certified Public Accountants. In addition, while a
senior officer of a Financial Industry Regulatory Authority (“FINRA”) broker/dealer that served as lead
underwriter for securities syndications, Mr. Lundelius held a FINRA General Securities Principal
license (Series 24, 7 and 63) and was a Registered Investment Adviser. In 1999, Mr. Lundelius was
appointed by the NASDAQ Board of Directors to serve on the NASDAQ Listing Qualifications Panel,
the body that reviews the listing and delisting of securities traded on The NASDAQ Stock Market.
2
His
term ended in 2006.
1
SEC Enforcement Actions Addressing Misconduct That Led to or Arose From the Financial Crisis,
http://www.sec.gov/spotlight/enf-actions-fc.shtml
.
2
“NASDAQ” stands for National Association of Securities Dealers Automated Quotations.
2
Mr. Lundelius has over 40 years of experience, including 7 years in securities and investment banking
in Houston and 3 years as senior vice president and chief financial officer of a life and health
reinsurance carrier in Dallas. Mr. Lundelius’ securities and investment banking experience includes
underwriting, portfolio management, derivatives, high-yield bond and securities and commodities
market analysis. He has consulted and/or testified in the areas of the underwriting process, securities
market pricing, hedge fund operations, investment suitability, securities fraud, fiduciary duties,
compliance and due diligence practices. He has given testimony before administrative hearings of the
SEC, in federal and state courts, at FINRA arbitrations, and before governmental hearings. Mr.
Lundelius has qualified as an expert in securities trading and valuation, Investment Adviser and
Investment Company Act matters, damages, financial analysis, accounting, fiduciary duties and
econometrics. Also, while working for major, international accounting firms over several years, Mr.
Lundelius served as an auditor of financial institutions, including broker-dealers, banks and thrifts, in
the practice of public accountancy.
In his capacity as insurance company chief financial officer (“CFO”), Mr. Lundelius’ duties included
managing the company's bond investment portfolio, financial forecasting, and regulatory reporting. In
addition, Mr. Lundelius’ firm participated in the National Association of Insurance Commissioners’ pilot
study that led to the implementation of risk-based capital measurement in the insurance industry.
Concurrent with his service as insurance company CFO, Mr. Lundelius was also CFO of one of the
largest managing general agencies in the U.S., writing in excess of $40,000,000 in new premium
business annually, and served as trustee of the firm’s self-directed 401k pension plan. Mr. Lundelius
also served on the board of directors of the life and health insurance company and the boards of
several insurance marketing firms. In his present role as a consultant, Mr. Lundelius has analyzed
finite reinsurance issues relating to various SEC and criminal investigations.
In 2003, Mr. Lundelius authored Financial Reporting Fraud: A Practical Guide to Detection and
Internal Control, peer-reviewed and published by the AICPA, which has been used as a textbook in
academic and professional courses. The second edition of the book was released in July, 2010.
Volunteering with not-for-profit organizations, Mr. Lundelius has served on finance and audit
committees overseeing financial reporting, internal control, investment management and policy, and
operational issues. For a major Episcopal Church congregation in Washington, DC, Mr. Lundelius
analyzed investment objectives and operating cash requirements to develop long-term investment
policy, as well as processes to monitor performance. For another congregation, as chair of the finance
committee, Mr. Lundelius analyzed internal control, supervised the change in accounting systems,
revised administrative and investment policies, and updated budgeting processes. Currently, under
appointment by the Episcopal Diocese of Washington, Mr. Lundelius now serves as the Chair of the
Diocesan Audit Committee, overseeing internal control for the multi-million dollar operating budget for
the diocese and its endowment funds. Mr. Lundelius also has served on the Diocesan Finance
Committee and as a seminar instructor to church treasurers on Not-For-Profit accounting and internal
3
control issues, and he has consulted with the diocese on audit and accounting issues relating to
diocesan financial statements. In addition, in 2021, Mr. Lundelius published a teacher’s guide and
classroom manual for confirmation in the Episcopal Church and an accompanying student reference
book.
3
Securities, Commodity Futures and Investment Management Expertise
In the areas of securities and commodity futures transactions, investment management and related
regulatory regimes, Mr. Lundelius has:
Securities Transactions and Regulation
• On behalf of the SEC’s Office of Inspector General, assisted in the investigation of the failure of
the SEC to uncover the Madoff Ponzi scheme. Mr. Lundelius led a team of securities experts
that interviewed SEC examinations staff and reviewed examination work papers, policies and
procedures and related documents. His work was cited by the Inspector General throughout
the IG’s report of investigation,
4
and his team issued a separate report of recommendations to
improve operations at the SEC Office of Compliance Inspections and Examinations.
5
Mr.
Lundelius supervised the analysis of purported trading volume on behalf of investors by
comparison of trading reported by Bernard L Madoff Investment Securities LLC (“BMIS”) to
FINRA and NSCC,
6
as well as securities positions held at DTC,
7
and he developed findings
relating to how the SEC could have detected Madoff’s fictitious trades. Mr. Lundelius and his
team also developed recommendations for improvement of SEC broker-dealer and investment
adviser examinations. In his written testimony before the US Senate Committee on Banking,
Housing and Urban Affairs, the Inspector General said Mr. Lundelius and his team brought
specialized experience:
… including expertise in complex financial fraud investigations, securities-related
inspections and examinations, hedge fund operations, cash flow analysis and
valuations, market regulation rules, market structure issues, accounting fraud,
3
The teacher’s guide was titled Did Not Our Heart Burn Within Us? and the reference was titled Then Opened He Their
Understanding.
4
Investigation of Failure of the SEC to Uncover Bernard Madoff’s Ponzi Scheme, August 31, 2009,
http://www.sec.gov/news/studies/2009/oig-509.pdf
.
5
Review and Analysis of OCIE Examinations of Bernard L. Madoff Investment Securities, LLC, SEC OIG Report No. 468,
September 29, 2009,
https://www.sec.gov/oig/reportspubs/468.pdf.
6
“NSCC” is the National Securities Clearing Corporation, a subsidiary of the Depository Trust & Clearing Corporation
(“DTCC”), which provides clearing, settlement, risk management, central counterparty services and a guarantee of
completion for certain transactions for virtually all broker-to-broker trades involving equities, corporate and municipal debt,
American depositary receipts, exchange-traded funds, and unit investment trusts.
7
“DTC” is the Depositary Trust Company, another subsidiary of DTCC, which effects "book-entry" changes to ownership
of the securities. DTC provides securities movements for NSCC's net settlements, and settlement for institutional trades
(which typically involve money and securities transfers between custodian banks and broker/dealers), as well as money
market instruments.
4
investment suitability, the underwriting process and compliance and due diligence
practices.
8
• With regard to investment advisers who recommended investments in Madoff funds, was
qualified as an expert in investment adviser due diligence and testified in multiple arbitrations on
the fiduciary duties of advisers.
• On behalf of KPMG LLP, was qualified in international arbitration as an expert in auditing
standards, investment fund operations and forensic accounting. Mr. Lundelius testified
regarding the legitimate and illegitimate operations of BMIS, materiality of compliance with
trading directives and the presumed findings of auditors had those auditors performed extended
procedures at BMIS as a service organization during the audits of funds that invested with
Madoff. Testimony included the roles of NSCC, DTC and London Stock Exchange in securities
clearance, the role of primary dealers in trading and custody of US Treasury securities, and
OTC options trading in Europe.
• On behalf of PricewaterhouseCoopers Canada and PricewaterhouseCoopers Netherlands,
testified regarding auditing standards under both US Generally Accepted Auditing Standards
(“US GAAS”)
9
and International Standards on Auditing (“ISA”)
10
relating to audits of funds that
invested with BMIS. Areas of testimony included the regulatory framework for broker-dealers
and investment advisers, the auditors’ role related to internal control and assessing materiality
under US Generally Accepted Accounting Principles (“US GAAP”),
11
materiality of compliance
with trading directives, and how the Madoff fraud was perpetrated.
• In a matter before the High Court of Ireland, prepared a report to address sub-custodian and
direct custodian issues under the US Customer Protection Rule (SEC Rule 15c3-3 and NASD
12
Rule 3230) relating to the handling of funds between BMIS and HSBC.
• On behalf of the SEC, assisted in the investigation of alleged use of odd-lot non-agency
mortgage-backed securities (“MBS”) by a major fixed income fund manager to increase returns
on its total return Exchange-Traded Fund. Analysis included determination of size, liquidity,
quantity and trading patterns of odd-lot MBS, as well as impact of odd-lot values on fund returns
during the early stages of the fund. Analysis also included review of auditor work papers
relating to valuation of financial instruments. The fund manager settled by admitting alleged
infractions.
8
Written Testimony of H. David Kotz, Inspector General of the Securities and Exchange Commission, Before the US
Senate Committee on Banking, Housing and Urban Affairs, September 10, 2009.
9
Generally Accepted Auditing Standards in the United States are promulgated by the Public Company Accounting
Oversight Board for SEC registrants and by the Auditing Standards Board of the AICPA for non-registrants.
10
International Standards on Auditing are issued by the International Auditing and Assurance Standards Board.
11
“US GAAP” are the Generally Accepted Accounting Principles for the United States promulgated by the Financial
Accounting Standards Board.
12
The National Association of Securities Dealers, Inc. (“NASD”) was the predecessor self-regulatory organization to
FINRA.
5
• On behalf of Metropolitan West Securities, a unit of Wells Fargo, analyzed the operations of a
broker-dealer subsidiary of a bank holding company with regard to sale of Structured
Investment Vehicle (SIV-lite) Asset Backed Commercial Paper to an insurance company.
Analysis included a detailed evaluation of the capital structure and vintages of the SIV-lite as
well as liquidation and wind-down procedures, evaluations by Nationally Recognized Statistical
Rating Organizations, and broker due diligence procedures. With regard to suitability, analysis
included evaluations under the Exchange Act of 1934, Investment Advisers Act of 1940,
Federal Reserve Board Regulation R, FINRA regulations and California Insurance Code
requirements.
• On behalf of Wells Fargo & Company, testified at a FINRA arbitration regarding investment
suitability, adviser fiduciary duties, and securities-backed lines of credit (“SBLOCs”). Analysis
included use of margin under FRB Regulation T, SBLOCs under Regulation U and bank
brokerage operations under Regulation R. Testimony on fiduciary duties included evolution of
SEC standards contained in regulations and publications from the Division of Investment
Management. Mr. Lundelius also assessed customer sophistication based on emails and text
messages between the customer and the broker’s registered representative.
• On behalf of regional wirehouse firms, assessed validity of short positions taken in the process
of underwriting Private Investment in Public Equity Securities (“PIPEs”) offerings. Analyses
included compliance with short selling rules prior to PIPEs issuance, liquidity of PIPEs markets,
and valuation of related securities.
• On another PIPEs matter in which the SEC alleged inflated share prices created excess
compensation for an investment manager, evaluated the impact of PIPE offerings and equity
lines of credit on issuer stock price, Rule 144 considerations, and valuations of securities
issued.
• Testified on behalf of a private equity fund regarding appropriateness of investments in PIPEs
and equity lines of credit.
• While serving on the NASDAQ Listing Qualifications Panel, evaluated multiple financing
proposals by listed firms attempting to increase capital utilizing PIPEs, equity lines of credit, and
similar vehicles.
• Testified at NASD enforcement proceeding regarding commissions relating to allocations of Hot
IPO
13
shares brought by NASD Department of Enforcement (DOE) against Ken Langone’s
broker-dealer, Invemed Associates, with regard to Rule 17a-5 broker accounting and books and
records requirements. Mr. Lundelius’ testimony included opinions on US GAAP, US GAAS, and
SEC rules and staff accounting bulletins dealing with revenue recognition, materiality and
13
An IPO is a corporation’s first offering of stock to the public. A “Hot IPO” or hot issue is one in which the stock
immediately trades at a premium in the aftermarket because there is greater public demand for the stock than there
are available shares.
6
financial statement presentation. Mr. Lundelius also analyzed the impact of DOE’s
enforcement positions on aspects of the underwriting process such as commission rate
structures and the distribution of securities to hedge funds and small investors. NASD Panel
returned a decision in favor of Mr. Langone. In an unrelated matter, the Supreme Court of the
United States cited the Invemed decision with regard to reasonableness of securities fees and
commissions from customers who received Hot IPO allocations.
14
• On behalf of an individual investor in a FINRA arbitration, prepared analysis of risk exposure
due to portfolio concentrations in limited number of securities using margin debt. Case was
successfully settled.
• On behalf of a broker-dealer, analyzed churning claims by investor who aggressively traded in
his account, with turnover in excess of 24:1, while maintaining numerous other accounts at
other firms which had little turnover. Case was successfully settled.
• On behalf of an individual investor, analyzed churning claims related to fixed income trades,
including holding periods of treasury and corporate bonds, fees and markups by the broker-
dealer and applicable FINRA rules. Case was successfully settled.
• On behalf of a group of individual investors, analyzed churning claims related to fixed income
trades, including holding periods of treasury and corporate bonds, fees and markups by the
broker-dealer and applicable FINRA rules. Analysis also included evaluation of “trading away
claims for sale of unauthorized securities by broker representatives.
• At arbitration, testified as to propriety of closing trading windows for corporate insiders and the
materiality impact on stock price, using share-trading models, had the windows remained open
for an executive wishing to exercise stock options; in addition, analyzed damages using Black-
Scholes, variable prepaid forward and share valuation models.
• On behalf of an executive of a major equipment supplier to the gaming industry accused of
insider trading by the SEC, prepared an analysis of business plans and public disclosures, as
well as published analysts’ reports, to determine if inside information was public. In addition,
Mr. Lundelius analyzed market efficiency of the gambling company stock by use of an event
study and other metrics, including those metrics established by his testimony in prior cases, to
determine materiality. Business plan analysis included assessment of operations and
opportunities in the Las Vegas and Macau markets, the latter involving significant evaluation of
Asian gambling practices and patterns.
• In federal district court in San Jose, qualified as an expert in accounting relating to the auditing
and accounting for share-based payments in a stock option backdating claim brought against
14
Credit Suisse Securities (USA) LLC FKA Credit Suisse First Boston LLC, et al. v. Glen Billing, et al., 551 U.S. 264
(2007).
7
the former CFO of Maxim Integrated.
15
Mr. Lundelius opined on documentation standards
under US GAAS and accounting for options under US GAAP, including valuation and
materiality. He also opined regarding duties of a CFO of a public company, how a company
prepares its financial statements and how Maxim’s compensation structure compared to others.
• In federal district court for the Southern District of New York, qualified as an expert in auditing
standards in a criminal proceeding involving a former KPMG partner accused of obtaining
advance notice of Public Company Accounting Oversight Board (“PCAOB”)
16
audit inspections.
Testimony included assessment of changes made to audit work papers after the report release
date for audits of publicly traded banks and financial services firms and adequacy of
documentation for credit loss provisions. Relevant PCAOB standards included AS 1001 –
Responsibilities and Functions of the Independent Auditor, AS 1105 – Audit Evidence, AS 1215
– Audit Documentation, AS 2201 – An Audit of Internal Control Over Financial Reporting that is
Integrated with an Audit of Financial Statements, AS 2501 – Auditing Accounting Estimates, AS
2502 Auditing Fair Value Measurements and Disclosures, AS 2601 – Consideration of an
Entity’s Use of a Service Organization, AS 2801 – Subsequent Events, AS 2901 –
Consideration of Omitted Procedures After the Report Date, AS 2905 – Subsequent Discovery
of Facts Existing at the Date of the Auditor’s Report, and AS 4101 – Responsibilities Regarding
Filings Under Federal Securities Statutes.
• Assisted New York Stock Exchange specialist firms Van Der Moolen and LaBranch with
interpretation of Exchange Rules during the Exchange’s investigation of specialist
interpositioning and best execution violations. Engagements included analysis of trading
systems and matching alleged violations identified by the Exchange with trade records from the
specialists, examining for evidence of front-running and latency of trade execution. Scope of
the engagements involved millions of trades.
• In testimony in federal district court in Florida, refuted stock manipulation charges by SEC
through analysis of the stock’s illiquid market and share price movements at the time the issuer
and promoters made news announcements. Mr. Lundelius discussed measures of random
walk, such as Augmented Dickey Fuller tests, bid-ask spread, and stock price reaction to news
entering the market. In his opinion, Senior Judge Gonzalez cited numerous statistics from Mr.
Lundelius’ testimony and report.
17
15
The court ruled that Mr. Lundelius could not opine on “whether Maxim’s granting process complied with GAAP” because
he had not reviewed the testimony of two witnesses. (SEC v. Carl Jasper, U.S. Dist. Ct., N.D. California, No. C 07-06122,
Order Re: Motions in Limine, March 31, 2010). However, the court noted that “Mr. Lundelius does not [intend to] opine
whether and how the [option granting] process was actually performed and thus it was not necessary for him to review the
employees’ deposition transcripts.”
16
The PCAOB issues audit standards for publicly traded companies listed on US stock exchanges. The PCAOB also
inspects auditors of those public companies as well as auditors of broker-dealers.
17
Securities and Exchange Commission v. David Gane, et al., 2005 U.S. Dist. LEXIS 607; 18 Fla. L. Weekly Fed. D 401,
at 35-37.
8
• In a similar case brought by the SEC in federal district court in Connecticut against a public
company and brokers trading its stock, testified for defendants about specific alleged matched
trades and market maker quotes preceding those trades. The jury deadlocked on some counts
but found for defendants on all others. In a retrial at which Mr. Lundelius testified on quote
spreads and ability to “mark the close”, the jury found for the defendant stockbroker. Testimony
in both cases included market efficiency analyses as demonstrated by Augmented Dickey Fuller
tests of random walk and other measures of efficiency. Testimony in both Florida and
Connecticut district courts, as well as subsequent case history, expanded the list of factors to
consider when determining whether a security trades in an illiquid market.
18
• Before International Chamber of Commerce International Court of Arbitration, testified regarding
liquidity and market efficiency of Blackstone stock utilizing metrics established in previous case
decisions.
• Further to stock manipulation claims relating to the 2010 Flash Crash, advised high frequency
traders on issues relating to regulation, policy and economic issues.
• Consulted for defendants in a criminal action brought by the New York Attorney General against
a securities broker and a promoter charged with selling fraudulent and unsuitable investments.
On separate matters brought by the Manhattan District Attorney’s office and the Office of the
U.S. Attorney, consulted on IPO share allocations, marking the close and no-net-sales issues
relating to brokers charged with stock manipulation and “pump and dump” schemes.
Commodity Futures Trading and Regulation
• On behalf of the National Futures Association (“NFA”), led the investigation of the failure of NFA
auditors to detect fraud at Peregrine Financial Group, Inc. The investigation analyzed audit
standards and the regulatory and operational aspects of futures commission merchants,
especially United States Commodity Futures Trading Commission (“CFTC”) Regulations 1.14,
1.15 for risk assessment, CFTC Regulations 1.20, 1.25 and 30.7 for segregated and secured
funds and CFTC Regulation 1.17 for net capital. The investigation also included examination
of NFA and Joint Audit Committee
19
procedures and an assessment of material compliance
18
A list of factors to consider to determine whether a security traded in an inefficient or illiquid market were developed in
Rose CAMMER, et al., v. Bruce M. BLOOM, et al., U.S.D.C. New Jersey, 711 F.Supp. 1264 (1989), also known as the
“Cammer Factors”.
19
The Joint Audit Committee is a representative committee of the audit and financial surveillance departments of U.S.
futures exchanges and regulatory organizations, including representatives of the NFA and other self-regulatory
organizations as well as representatives of the CFTC.
9
with those procedures. The investigation produced a report of findings
20
and a report of
recommendations
21
for NFA.
• On behalf of Jon Corzine and others, testified regarding the scope of CFTC Regulation 1.16
and the role of independent accountants in protecting customer funds at MF Global, Inc., a
CFTC-registered futures commission merchant and a SEC-registered broker-dealer. Analysis
included application of CFTC regulations for both segregated and secured funds, and the
calculation of required minimum balances for both, the availability and use of excess funds, and
the interaction of FINRA rules with CFTC regulations.
• On behalf of a major investment bank, determined the compliance of a major futures
commission merchant with accounting and valuation covenants in credit facilities. Analysis
included assessment of CFTC and NFA regulatory requirements, applicable US GAAP
standards, and reporting requirements. Commodities trading separate accounts and
investments in commercial paper and futures positions were also assessed, as well as
operations of a related global investment fund.
• Relating to a separate futures commission merchant, analyzed the corporate governance and
financial reporting for offshore commodities pools, including trading operations, position
management and reporting. Mr. Lundelius consulted on third party administrator functions and
duties for hedge funds, especially for foreign funds based in the Cayman Islands.
• On behalf of a futures commission merchant subject to CFTC Order, served as independent
third-party reviewer, approved by the CFTC, to assess measures implemented to correct CFTC
findings of inadequate supervisory procedures (Regulation 166.3) and inadequate credit and
concentration risk policies and controls. Analyses consisted of detailed examinations of
position limits and credit limits and the operation of related controls.
22
Investment Management and Regulation
• On behalf of the US Department of the Interior, analyzed investment practices relating to funds
held in trust for Indian Nations, including adequacy of documentation, suitability of investments,
and adherence to the Prudent Investor Act. Mr. Lundelius was qualified in Federal Claims
Court as an expert in prudence of trust fund investments, accounting and auditing of trusts,
fiduciary duties and trust fund management.
20
Report of Investigation: Analysis of the National Futures Association’s Audits of Peregrine Financial Group, Inc.,
http://www.nfa.futures.org/news/BRG/report_of_investigation.pdf
.
21
Recommendations Report: Analysis of the National Futures Association’s Audits of Peregrine Financial Group, Inc.,
http://www.nfa.futures.org/news/BRG/final_recommendations_report.pdf
.
22
In the Matter of FC Stone LLC, Order Instituting Proceedings Pursuant to Sections 6(c) and 6(d) of the Commodity
Exchange Act, CFTC Docket No. 13-24, May 29, 2013.
10
• On behalf of The Reserve Fund, as part of settlement negotiations with the SEC, prepared a
comprehensive cost allocation study to assess the profitability of the investment adviser and
related distribution and management entities within the fund complex. In an action brought by
the SEC, Mr. Lundelius testified as to damages incurred when The Reserve Fund, holding three
trillion dollars of assets under management, broke the buck in September, 2008, including
assessment of investor earnings and asset recoveries. In a ruling on motions in that case,
Judge Gardephe stated that Mr. Lundelius was “qualified by training and experience” to offer
opinions and that he considered Mr. Lundelius’ report “in connection with the parties' arguments
about the disgorgement remedy sought in the complaint”.
23
• On behalf of a fund manager during an SEC Wells Process, submitted an affidavit that
evaluated fund returns in accordance with Global Investment Performance Standards,
24
after
allocating costs to appropriate categories, including organization costs. Analysis also involved
valuation of an early-stage pharmaceutical start-up firm.
• Testified, relating to an insurance claim, regarding the operations of a broker-dealer distributor
within TIAA-CREF Individual & Institutional Services, Inc., a major fund complex. Testimony
included analysis of servicing agreements and FOCUS reports, tracing fee reimbursements and
accounting for proprietary gains and losses due to delayed transactions. Specific areas
reviewed included Brokers and Dealers Investments, ASC 940-320-35; Risks and Uncertainties,
ASC 270-10;
25
Auditing Accounting Estimates, Including Fair Value Accounting Estimates, and
Related Disclosures, AU-C Section 540; SEC Staff Accounting Bulletin No. 99, Materiality;
Section 22(e), and Rules 22c-1(a) and 2a-4(a) of the Investment Company Act.
• On behalf of a pension plan, assessed the development of investment recommendations by a
major registered investment adviser, including application of ERISA standards, relating to an
index arbitrage strategy utilizing an unaudited intermediary. Mr. Lundelius analyzed operational
due diligence performed by the adviser as well as subsequent correspondence between the
adviser and the SEC and US Department of Labor.
• At a criminal trial in US District Court, was qualified as an expert in accounting, pension plans
and business valuation and testified on regulations relating to operations of registered
investment advisers with regard to underwritings by affiliates and the related securities and
ERISA requirements for pension fund clients, including SEC and US Department of Labor
rulings. Testimony also included assessment of internal control and financial and securities
23
Transcript of proceedings in United States District Court, Southern District of New York, before Hon. Paul G. Gardephe,
March 28, 2012.
24
Global Investment Performance Standards (“GIPS”) are promulgated by the CFA Institute and are used measure and
report investment portfolio performance.
25
“ASC” refers to the Accounting Standards Codification implemented in the United States by the Financial Accounting
Standards Board in 2009. References to pre-codification financial accounting standards in this curriculum vitae have
been updated to current ASC references.
11
reporting requirements under both the Investment Company Act and the Investment Advisers
Act of 1940.
• On behalf of a $7 billion AUM investment adviser and under order from the SEC
26
as SEC-
approved Independent Consultant to examine compliance with Sections 204(a), 206(2) and
206(4) of the Investment Advisers Act of 1940 and Rules 204-2(a)(12), 206(4)-2(a) and 206(4)-
(7) thereunder, reviewed:
• Internal control over financial reporting
• Best execution, trade allocation and compliance reporting
• Investor reporting, accuracy of answers to due diligence questionnaires, and timeliness of
fund audits
• Trade monitoring, risk exposure, and controls over use of inside information, cherry-picking,
and front-running
• Segregation of duties and functions for related broker-dealer
• Compliance policies and procedures, including Rule 206(4)-(7) reporting
Additional work was performed to determine if there was evidence of insider trading during the
period from 2006 – 2008 and to analyze the controls over insider trading. In addition, pursuant
to review of Rule 206(4)-(7), the SEC required assessment of policies and procedures for all
issues listed above as well as progress reports on the implementation of remediation to any
deficiencies. Two reports were filed with the SEC’s Enforcement Division in Los Angeles. In
addition, Mr. Lundelius held face-to-face meetings with compliance personnel of major
brokerages whose customers invested with the investment adviser regarding the impact of the
SEC Order, investment manager changes and control improvements.
• Analyzed portfolio investments, on behalf of a pension plan, for lack of diversification under
ERISA as alleged by Department of Labor, incorporating portfolio research findings on time
diversification of money with Prudent Investor standards. DOL settled under favorable terms
after Mr. Lundelius’ presentation of findings to opposing counsel in the Office of Solicitor.
• On behalf of pension fund customer, reviewed broker/dealer due diligence procedures for real
estate direct participation programs and suitability of those programs for pension fund
investment, analyzing asset allocation and fund investment policies and valuing the investment
interests in each real estate entity. Case was successfully settled.
• On behalf of Fifth Third Bank, testified regarding the obligations of a private equity investment
adviser when recommending investment in a premium finance lender for life settlements.
Testimony included failures in due diligence with regard to internal control significant
deficiencies and material weaknesses cited by auditors. Analysis also included forensic tracing
of expense and revenue frauds to those internal control deficiencies and weaknesses.
26
https://www.sec.gov/litigation/admin/2011/34-64442.pdf.
12
• At FINRA arbitration, testified, as an expert on corporate governance and fiduciary standards,
on behalf of Charles Schwab & Co. regarding the appropriate governance structure and board
fiduciary duties with respect to investment selection and monitoring by a not-for-profit entity that
invested in a Ponzi scheme.
• In a separate matter on behalf of Charles Schwab & Co., testified at FINRA arbitration regarding
the appropriate governance structure and board fiduciary duties with respect to investment
selection and monitoring by a property and casualty insurance carrier. Testimony included role
of investment committee, investment advisers, and board oversight.
• On behalf of a registered investment adviser, testified at trial in California State Court on
portfolio management, fiduciary duties, and damages relating to a long/short strategy fund.
Jury returned a favorable verdict.
• In connection with regulatory investigations of research published by securities analysts,
evaluated the discounted cash flow and working capital forecasts, including estimates of
liquidity, earnings multiples and future funding needs, made by a Salomon Smith Barney
analyst, working with Jack Grubman, for telecommunications securities, including equities and
distressed high yield bonds, covered by SSB in connection with an NASD arbitration
proceeding.
• In connection with a large accounting internal investigation, analyzed derivatives transactions
and financial models of Freddie Mac, a major originator of mortgage bond structured
securitizations and a primary dealer in treasury bonds utilizing one of the most comprehensive
hedging operations in the financial services industry. Areas of investigation included extensive
interviews of trading and accounting personnel, evaluation of accounting issues, assessment of
bond trading systems, financial analysis of derivative transactions (impact on duration,
convexity and swaption valuation using Black-Scholes), ASC 320 - Investments classification,
issues relating to SEC Staff Accounting Bulletin No. 99, Materiality, and determination of
economic rationale for transactions. As part of this analysis, Mr. Lundelius also extensively
reviewed and recomputed Value at Risk measurements incorporating findings from the internal
investigation.
• Analyzed insider trading activities of Section 16 officers in class action and criminal prosecution
matters, including valuation of vested and non-vested options, interaction with short-swing profit
rule, tax implications, and SEC Rule 144 and other restrictions.
• On behalf of Lucent, analyzed damages alleged by seller due to decline in Lucent restricted
stock received as payment for firm acquired by Lucent, including the timeliness of the process
for removing restrictions under Rule 144. Damages analysis included ability of seller to hedge
by use of option, costless collar, variable prepaid forward and other strategies.
• Before International Chamber of Commerce International Court of Arbitration, testified on
damages suffered due to alleged failure of Blackstone to implement sales of stock held by a
13
former partner. Analysis included assessment of market conditions and development of sales
program models under different assumptions.
• Analyzed complex derivative transactions (including Black-Scholes and Convenience Yield
analyses) intended as cash flow hedges, under ASC 815 – Derivatives and Hedging, for energy
commitments made by major utilities with regard to an earnings restatement and an SEC
investigation. In addition, while employed by a major accounting firm, Mr. Lundelius advised
auditors of an international electric power company on accounting issues.
• Analyzed auditing and disclosure of derivative transactions of Safety-Kleen, a major landfill and
waste disposal firm, including assessment of accounting treatment of swaptions and other
instruments.
• In administrative hearing before the SEC, designed and testified regarding econometric models
to determine the impact of securities trading under various market conditions, modeling
securities price valuation, event analysis, the impact of institutional investor trading and the role
of transfer agents. In her opinion, SEC Administrative Law Judge Foelak referenced the
modeling methodology and cited extensively from Mr. Lundelius' testimony regarding his
assessment of the actions that would have been taken by an “economically rational
shareholder”.
27
At the hearing, Mr. Lundelius was qualified as an expert in securities valuation
and as an expert in the price behavior of securities sold into thinly traded markets.
• On behalf of several high-net worth investors, investigated alleged misuse of insurance
products, SEC Rule 144 offerings and master limited partnerships by family office operations at
Merrill Lynch, Morgan Stanley, and major bank trust companies. Mr. Lundelius’ engagements
included the suitability of these products, including product liquidity and pricing. Estate planning
was a significant issue in each case, involving the use of grantor trusts, charitable remainder
trusts and other estate planning vehicles.
• For an ultra-short mutual fund, provided opinions regarding the industry practice and regulatory
framework for a mutual funds’ communications with the public, and the process by which
communications with the public are created, reviewed, and approved.
28
Also, Mr. Lundelius
analyzed risk-return characteristics of structured finance products in the portfolio and assessed
liquidity and the impact of redemptions on net asset value (“NAV”).
• On behalf of a major fund administrator, analyzed the flow of transactional data for a master-
feeder fund structure into and out of the NAV package (“NAV Pak”) provided to investment
advisers. The analysis included assessment of NAV Pak data used to prepare financial
statements for the funds under U.S. GAAP, including accounting for redemptions under
27
In the Matter of WHX Corporation, Initial Decision, October 6, 2000, available through the SEC’s web site at
http://www.sec.gov/litigation/aljdec/id173cff.htm
.
28
Securities and Exchange Commission v. Kimon P. Daifotis, et al., U.S. Dist., ND Ca., No. C 11-00137 WHA, Order
Granting In Part and Denying In Part Motion to Exclude Expert Opinion of Charles R. Lundelius, June 7, 2012.
14
Financial Services – Investment Companies, ASC 946-20-25, including reclassification from
equity to redemptions payable.
• On behalf of a mutual fund president, filed an affidavit based on analysis of market timing
transactions, disclosure of constraints on those transactions and the impact they had on fund
operations. Analyzed fund Class A, B and C share issues, including impact on investment
performance.
• On behalf of a major mutual fund sponsor and administrator, reviewed fee structure and
operational controls, including NAV calculations and sales charges for the fund complex.
• On behalf of another mutual fund, consulted on NAV calculations relating to valuation and
accounting issues.
• On behalf of UBS PaineWebber, testified at NASD arbitration regarding a novel concept of
broker liability for allegedly recommending the wrong type of investment adviser for a wrap
account, opining on classifications of investment styles used by fund managers. NASD panel
found in favor of UBS.
Internal Control and Supervisory Procedures
• On behalf of the former COO of Countrywide Financial Corporation, analyzed the internal
control structure at Countrywide, including specific audit, credit and loan loss committees at
both the management and board levels, and assessed compliance with the COSO
29
Internal
Control - Integrated Framework and Auditing Standards 2 and 5. In two separate expert
reports, Mr. Lundelius analyzed the due diligence process for mortgage loan securitization at
Countrywide, including extensive analysis of specific procedures performed, and tied those
procedures to disclosures in offering materials. All reports assessed whether the COO could
have reasonably relied upon corporate internal control for the information received.
• On behalf of Hank Greenberg and Howie Smith relating to charges brought by the New York
Attorney General, testified regarding internal control and assessed compliance with the COSO
Internal Control - Integrated Framework at American International Group relating to reinsurance
treaties and consolidation of special purpose entities. The assessment included analysis of
transfer of risk, the development of accounting guidance relating to special purpose entities
(“SPEs”) from 1990 – 2002, issues relating to SEC Staff Accounting Bulletin No. 99, Materiality
(“SAB 99”), and review of the organizational and reporting structure at AIG. In a separate
defamation case brought by Hank Greenberg against Elliott Spitzer, analyzed the 2005
restatement of AIG financial statements from 2000 – 2004. Analysis included extensive review
of audit work papers over the entire period, assessment of internal control under Mr. Greenberg
and by his successors, and evaluation of the propriety of each restatement item under SAB 99.
29
“COSO” stands for Committee of Sponsoring Organizations of the Treadway Commission.
15
• On behalf of Jon Corzine and others, testified regarding internal control at MF Global Holdings,
Ltd., prior to bankruptcy. Testimony included analysis of the control environment under the
COSO Internal Control - Integrated Framework, and the analytical work performed by
independent accountants, CME Group,
30
the Federal Reserve,
31
and outside consultants. The
analysis specifically looked at entity-level controls at the holding company level in detail to
determine materiality of those controls to segregation of funds.
• On behalf of the SEC, testified in Administrative Hearing regarding COSO control environment,
human resources and corporate governance standards relating to retention by a public
company of a CFO who was subject to a bar by the Public Company Accounting Oversight
Board. Administrative Law Judge Elliot cited extensively from Mr. Lundelius’ report
32
and expert
testimony in his Initial Decision,
33
including Mr. Lundelius’ opinion on the materiality of
effectiveness of Internal Control over Financial Reporting.
34
Subsequently, the U.S. Supreme
Court ruled that SEC administrative law judges were subject to the Appointments Clause of the
U.S. Constitution,
35
and that decision resulted in a new trial. Mr. Lundelius testified in the
second trial, and Administrative Law Judge Grimes quoted from Mr. Lundelius’ testimony and
report in his Initial Decision.
36
• As consultant, assisted counsel in analysis of impact on revenue recognition of contextual
information obtained by Google from certain intellectual property. Analysis included
assessment of Alphabet’s financial reporting structure and identification of operating segments
in which the contextual information would be monetized.
• On behalf of a sales executive at a software development firm, applied the COSO Internal
Control - Integrated Framework to determine the scope of improper revenue recognition due to
a tone at the top that allowed the use of side agreements that were hidden from auditors. The
forensic analysis included determination of personnel with knowledge of the side agreements
and assessment of their roles in sales, finance and accounting. Analysis also included
examination of the role of the CFO and failures to implement proper Internal Control over
Financial Reporting.
• As a consultant to a major publicly traded security firm responding to inquiries from the SEC,
prepared an analysis of materiality of accounting errors under SAB 99.
30
CME Group Inc., the holding company and parent of the Chicago Mercantile Exchange and other exchanges, was the
Designated Self-Regulatory Organization for MF Global, Inc., the futures commission merchant subsidiary of MF Global
Holdings, Ltd.
31
MF Global Holdings, Ltd., was a primary dealer for the New York Federal Reserve Bank.
32
Available at https://www.sec.gov/litigation/apdocuments/3-16386-event-34.pdf.
33
Initial Decision, dated Dec. 21, 2015, found at https://www.sec.gov/litigation/apdocuments/ap-3-16386.xml.
34
In the Matter of Traci J. Anderson, CPA, Timothy W. Carnahan, and Cyios Corporation, Initial decision, December 21,
2015, p.18, available at https://www.sec.gov/alj/aljdec/2015/id930ce.pdf
.
35
Lucia v. SEC, 138 S. Ct. 2044 (2018).
36
Initial Decision, dated Jan. 10, 2020, found at https://www.sec.gov/litigation/apdocuments/ap-3-16386.xml.
16
• On behalf of a major California-based financial institution, analyzed the operations of a broker-
dealer subsidiary of a bank holding company, including supervision of the processes used by
registered representatives to assess investment suitability. Mr. Lundelius also analyzed the
intersection of banking and broker-dealer regulations, particularly Federal Reserve Board
Regulation R and FINRA regulations.
• On behalf of an individual customer, testified on supervisory procedures relating to registered
representative/insurance salesman who misappropriated customer funds while cashing out
various insurance policies, opining on the intersection of insurance and securities regulations
relating to supervision.
• On behalf of a senior vice president of a regional broker/dealer, opined at NASD arbitration on
turnover calculations used to determine churning of investor accounts.
• Testified for and consulted with investor/plaintiffs at NASD arbitration regarding stock trading
manipulation scheme, broker/dealer compliance and supervisory procedures, and damages to
investors, including ability to trade in a thin market and the value of shares sold into that market.
• Consulted with hedge funds and prime brokers regarding accounting policies, trading controls,
personnel changes, risk management and due diligence procedures. Work in this field has
included detection and assessment of inappropriate investment strategies (“style drift”) as well
as establishing monitoring controls over short selling, margin accounts and risk exposure.
Real Estate Investment Trusts
• On behalf of a nine-billion-dollar hedge fund, constructed the accounting systems, procedures
and policies for the initial public offering (“IPO”) of a Real Estate Investment Trust (“REIT”),
including internal control and valuation mechanisms.
• In a FINRA Department of Enforcement action, on behalf of a leading broker-dealer marketer of
non-listed public REITs, analyzed the suitability of the REIT offerings, valuation of the REIT
units transacted in tertiary markets and appropriate disclosures of REIT unit values and
performance in customer account statements. Analysis included review of filings with FINRA
Corporate Financing Department and analysis of communications with the public and
reasonable basis suitability standards.
• On behalf of a former CFO of a publicly traded REIT, analyzed materiality of changes to non-
GAAP measures published by REITs and securities analysts, as well as materiality of US GAAP
restatement changes made to financial statements, under SEC Staff Accounting Bulletin No. 99,
Materiality, subsequent to the CFO’s departure. The materiality assessment included extensive
analysis of analysts’ reports and securities pricing models.
17
Hedge Funds and Private Equity
• Testified, on behalf of Lynn Tilton, in SEC Administrative Proceeding regarding a private equity
fund structured as a Collateralized Loan Obligation. Testimony included discussion of private
equity industry standards and valuation guidelines used to assess collateralized debt
obligations, representing investments in distressed portfolio companies, for purposes of
impairment and fair value. Analysis also included the procedures used for impairment and
valuation by fund personnel and related internal control, as well as due diligence procedures
employed by investors. SEC Administrative Law Judge Foelak found that Mr. Lundelius had
“extensive experience in public and forensic accounting” and qualified him as an expert in those
fields. Judge Foelak ruled in favor of Ms. Tilton.
37
• Testified in a separate matter on behalf of Lynn Tilton in NY Supreme Court regarding claims
made by Norddeutsche Landesbank Girozentrale and Hannover Funding Company LLC
regarding book and tax differences in capital gains, interest recognition and financial reporting
relating to Collateralized Loan Obligation holdings in portfolio companies. The jury returned a
verdict for Tilton.
• Testified, on behalf of Yorkville Advisors, regarding the SEC’s alleged violations by the
investment adviser of fair value accounting standards under US GAAP. Analysis included
investor due diligence procedures, internal control standards, evaluated under COSO Internal
Control – Integrated Framework standards, in place at the investment adviser, the scope of
audit tests performed under US GAAS, and requirements under both Statement of Financial
Accounting Standards No. 157 and Fair Value Measurements, ASC 820-10-35. With regard to
the latter, analysis also included application of US Private Equity Valuation Guidelines. Fifteen
different investment positions were at issue, including investments in manufacturing,
technology, oil and gas, and other industries. After the judge limited the testimony of the SEC’s
valuation expert, the SEC moved to dismiss the complaint.
• Also on behalf of Yorkville Advisors, testified in a Tax Court matter regarding the impact of
Australian insolvency proceedings on value of convertible debt held by YA Global Investments.
Analysis included assessment of voluntary administration procedures, deed of company
arrangements, and valuation of the fund’s interest in the insolvency process.
• With regard to the debt and equity structure of a hedge fund, reviewed financial reporting and
internal accounting records to determine treatment of subordinated debt of Bermuda and
Cayman feeder investors. Mr. Lundelius also assessed accounting for redemption requests,
fund leverage, and materiality of financial statement disclosures, as well as the calculations of
fees and profit sharing.
37
In the Matter of Lynn Tilton, et al., Initial Decision, September 27, 2017, available through the SEC’s web site at
https://www.sec.gov/alj/aljdec/2017/id1182cff.pdf
.
18
• Testified on behalf of Dutchess Capital Management and the private equity fund’s offshore
Cayman Islands feeder relating to appropriateness of investments by the master fund in ten
portfolio companies and the performance of those companies during the 2008 financial crisis.
Analysis included investor due diligence and assessment of characteristics under ASC 915 -
Development Stage Entities and PCAOB AS 2415 –Consideration of an Entity’s Ability to
Continue as a Going Concern. Valuations were assessed under standards of the Private Equity
Industry Guidelines Group and ASC 820 – Fair Value Measurement.
• On another private equity fund matter in which the SEC alleged inflated share prices created
excess compensation for an investment manager, evaluated the impact of PIPE offerings and
equity lines of credit on issuer stock price, Rule 144 considerations, and valuations of securities
issued. Analysis included assessment of illiquid markets on lines of credit and valuations, and
investor due diligence. In a related matter, Mr. Lundelius testified on behalf of the private equity
fund regarding appropriateness of investments in PIPEs and equity lines of credit.
• On behalf of a major hedge fund administrator, opined on the appropriate treatment of
redemption requests under US GAAP at the master and feeder fund levels, in particular, ASC
480 - Distinguishing Liabilities from Equity. Mr. Lundelius assessed the role of a hedge fund
administrator and its calculation of net asset values for fund investors.
• At an international arbitration, assessed fiduciary duties of GPS Partners, an investment
adviser, to clients invested in proprietary hedge funds, including reporting and governance
standards of Cayman Islands and Switzerland. Issues also included portfolio management,
investor due diligence and suitability of recommendations.
• On behalf of a major business development corporation (a publicly traded private equity fund),
assessed SEC claims of improper valuations of early stage portfolio companies. Analysis
included assessment of bankruptcy probabilities, valuation models and financial disclosures, as
well as fair value standards under US Private Equity Valuation Guidelines and US GAAP.
• On behalf of investors in private equity funds invested in special purpose entities registered in
the British Virgin Islands, analyzed the investment presentations and due diligence standards
for portfolios of life settlement contracts and other assets to assess breaches of fiduciary duties
of the managing director and chief investment officer.
• On behalf of CIBC Oppenheimer, testified at NASD arbitration as to the impact actions taken by
a hedge fund’s prime broker had on portfolio performance, including analysis of margin calls
and the effect of share dispositions in thinly traded markets, as well as damages calculations.
Securities Class Actions
• Investigated accounting issues related to the bankruptcy of Global Crossing on behalf of the
Special Committee of the Board of Directors, specifically reviewing fair values and revenue
19
recognition of asset exchanges, classification of operating vs. capital (or sales-type) leases, and
impact on financial reporting and debt covenants.
• On behalf of a corporate defendant, analyzed the validity of management and analysts’
forecasts and their impact on the value of stock prices for $150 million securities fraud class
action suit, including analysis of accounting and sales data, revenue recognition issues, and
determining when management became aware of certain information. Due to findings on
accounting issues, Judge Hilton (E.D. Va.) dismissed all accounting claims prior to trial and
found for defendants immediately after plaintiffs presented their case.
• On behalf of plaintiffs in Zuora, Inc. class action suit, assessed assertion by opposing expert
that only a portion of the stock drop could be attributed to problems with product integration in
the cloud-based subscription management platform. Analysis included review of board
minutes, subscription sales pipeline models, consultants capacity models, and product
integration documents for this Software as a Service company. Analysis also included
assessment of securities analysts’ rationale for changes to their forecasting models and
valuation multiples due to publicly available information.
Valuation and Investment Banking Expertise
As to valuation, due diligence and investment banking, Mr. Lundelius has:
Securities Valuations
• On behalf of the founder of Tinder, Sean Rad, and his team members, in their suit against IAC
and Match, testified as to the value of Tinder for purposes of assessing damages to plaintiffs’
stock options. The valuation involved assessment of cash flow models exceeding 200
spreadsheets, the determination of comparable firms in the high-growth, high-tech sector, and
assessment of appropriate beta and discount rates. The case settled for $441 million
immediately after Mr. Lundelius testified.
• Testified, on behalf of Lynn Tilton, in SEC Administrative Proceeding regarding a private equity
fund structured as a Collateralized Loan Obligation. Testimony included discussion of private
equity industry standards and valuation guidelines used to assess collateralized debt
obligations, representing investments in distressed portfolio companies, for purposes of
impairment under ASC 310 – Receivables and ASC 326 Financial Instruments – Credit Losses
and fair value under ASC 820 – Fair Value Measurement. Testimony also included discussion
of the development of impairment and fair value standards over time, as well as the link
between private equity valuation guidelines and fair value under US GAAP.
• In a separate matter on behalf of Lynn Tilton, calculated out-of-pocket damages related to
alleged fraudulent misrepresentations by MBIA Inc. and MBIA Insurance Corp. Engagement
included collateral valuations and waterfall analysis at liquidation under various scenarios, as
20
well as disclosures made by MBIA in SEC and statutory filings. Mr. Lundelius also analyzed the
ability of Patriarch to liquidate collateral portfolio companies and related timing and amount of
dispositions. The case settled soon after Mr. Lundelius’ testimony.
• On behalf of the SEC, assisted in the investigation of alleged use of odd-lot non-agency
mortgage-backed securities (“MBS”) by a major fixed income fund manager to increase returns
on its total return Exchange-Traded Fund. Analysis included the determination of odd-lot exit
prices under ASC 820 – Fair Value Measurement, compared to values of round lots, using
Level 2 inputs from thinly traded markets.
• On behalf of Canadian Imperial Bank of Commerce, analyzed fair value accounting for MBS
swaps from the perspective of the counterparties: for CIBC, Canadian Institute of Chartered
Accountants Accounting Handbook Section 3855 Financial Instruments – Recognition and
Measurement, IAS 39 Financial Instruments – Recognition and Measurement, and IFRS 13 Fair
Value Measurement;
38
for the counterparty, Cerberus Capital Management, ASC 820 – Fair
Value Measurement
, including the role of “conservatism” in fair value. Mr. Lundelius opined on
materiality of different values of synthetic notionals in the swaps and on required
representations to auditors under US GAAS.
• With regard to a hedge fund investing in small capitalization stocks, assessed market liquidity of
convertible securities, including assessment of investment banking functions performed by
affiliates of the hedge fund manager. Mr. Lundelius also opined on valuations of securities and
determined whether markets for those securities were active in accordance with ASC 820 - Fair
Value Measurement.
• Consulted with publicly traded and privately held institutional investors on valuation of and
accounting for auction-rate securities, mortgage-backed securities, credit default swaps and
other alternative investment products, including analysis of market liquidity and impact of that
liquidity on fair value under IFRS, US GAAP and insurance Statutory Accounting Principles.
39
Drawing upon federal district court decisions, including those cases in which Mr. Lundelius
testified, Mr. Lundelius was able to establish whether the markets were active and allowed for
orderly transactions.
• On behalf of a US investment adviser affiliate of a major European insurance carrier, evaluated
accounting for investments and management stock options under IAS 39 – Financial
Instruments: Recognition and Measurement, IAS 40 – Investment Property, and IFRS 2 –
Share Based Payment. Analysis included valuation of the investment adviser and related stock
options.
38
“IFRS” are the International Financial Reporting Standards promulgated by the International Accounting Standards
Board (“IASB”). IFRS consists of statements issued by the IASB and International Accounting Standards (“IAS”) issued
by its predecessor.
39
Statutory Accounting Principles (“SAP”) are the primary authoritative statutory accounting practices and procedures
promulgated by the National Association of Insurance Commissioners in the United States.
21
• On behalf of two major European insurance carriers, evaluated investment classifications under
IAS 32 – Financial Instruments Presentation, IAS 39 – Financial Instruments: Recognition and
Measurement, IAS 40 – Investment Property, and IFRS 7 – Financial Instruments: Disclosures.
Additionally, Mr. Lundelius analyzed insurance risks under IFRS 4 – Insurance Contracts for
reinsurance contracts and ceding agreements.
• On behalf of a major European financial institution, evaluated claims by the SEC regarding
timely reporting of goodwill impairment under IAS 36 - Impairment of Assets. Analysis involved
assessment of allocation of goodwill to cash generating units and the fair value of those units, in
addition to assessment of SEC Staff Accounting Bulletin No. 99, Materiality. Other issues
involved application of IFRS 3 – Business Combinations, IFRS 5 – Non-current Assets Held for
Sale and Discontinued Operations, IFRS 8 – Operating Segments, and IAS 39 – Financial
Instruments: Recognition and Measurement.
• On behalf of Hank Greenberg and Howie Smith relating to charges brought by the New York
Attorney General, valued the investment made by an affiliate of American International Group in
a special purpose entity. Analysis included assessment of loss development for the book of
business ceded to the SPE as well as application of accounting rules for other than temporary
impairment in accordance with ASC 320-10-35 - Investments – Debt and Equity Securities. In a
separate defamation case brought by Hank Greenberg against Elliott Spitzer, analyzed the
2005 restatement of AIG financial statements from 2000 – 2004. Mr. Lundelius led a team of
CPAs who performed an extensive review of audit work papers over the entire five-year period,
including accounting positions taken by AIG management under Mr. Greenberg and by his
successors relating to derivatives, covered calls, dollar roll transactions, hedge funds, foreign
exchange and other issues, and evaluation of the propriety of each restatement item. The
analysis consisted of assessments under US GAAP and Canadian GAAP and under US GAAS
and International Standards on Auditing.
• Testified at FINRA hearing on damages relating to raiding of the high-yield securities trading
unit of Gleacher, a publicly traded broker-dealer, including determination of value of the entire
unit and value of registered representatives and other personnel using both market
comparables and discounted cash flow methodologies, as well as event analysis of Gleacher
stock trading before and after the raid. The FINRA Panel awarded damages to Gleacher of
$17.8 million.
• On behalf of Wells Fargo Advisers (“WFA”), testified as to damages resulting from the raid of an
entire branch office in Arkansas in a FINRA arbitration. The scope of work included valuing the
branch as if it had been sold and as if it had been retained by WFA. Damages also included
assessment of unjust enrichment of the respondent firm. Panel awarded Mr. Lundelius’
discounted cash flow fair value for the branch of $15.3 million, plus attorneys’ fees and costs, to
WFA.
22
• On behalf of Edelman Financial Engines, LLC, testified regarding the hypothetical sale and
damages resulting from the alleged misuse of trade secrets when an advisor left Edelman to go
to a competitor. Analysis included assessment of whether the advisor’s accounts constituted a
“business” under ASC 805 Business Combinations, forecasting future cash flows and assessing
profitability of the assets under management at issue.
• Valued multi-office broker-dealers and individual branch offices of AG Edwards and Advest
regarding alleged raiding of registered representatives. Valuation included alleged loss of
investment advisory clients and confidential information resulting from alleged interference in
broker employment agreements.
• Valued and testified regarding multiple-representative day-trading operations within E*Trade in
NASD arbitration. In a separate matter, valued a day-trading unit within E*Trade relating to
alleged improper contract termination. Valuation also addressed alleged loss of reputation due
to the contract termination.
• Valued investment advisory unit of regional broker-dealer in alleged client theft matter. Assets
valued included alleged loss of client lists, trade secrets and other confidential information
resulting from alleged interference by investment managers that organized the departure of key
investment advisory personnel.
• Analyzed and valued electronic bond trading systems for antitrust claim, including the role of
institutional investors, dealers and brokers in the trading of fixed income investments.
Securities Due Diligence
• On behalf of Metropolitan West Securities, a unit of Wells Fargo, analyzed investment suitability
of a structured investment vehicle (SIV) and related due diligence exercised by the bank’s
broker in a securities lending services program when investing funds deposited by stock
borrowers under that program. Investments included asset-backed commercial paper issued
prior to the Financial Crisis. Mr. Lundelius evaluated application of the Institutional Investor
Exemption of FINRA Rule 2111(b) and assessed the broker’s credit approval, monitoring and
compliance procedures. Further, Mr. Lundelius analyzed liquidity and damages scenarios
related to residential mortgage-backed securities held by the SIV.
• On behalf of an individual investor, investigated the failure of a registered investment adviser to
perform adequate due diligence relating to investments in a Ponzi scheme, including failure to
register as a broker-dealer and failure to report payments from Ponzi scheme promoters.
• Consulted with hedge funds of funds regarding due diligence procedures for prospective fund
managers.
23
• On behalf of CIBC Oppenheimer, testified at NASD arbitration on investment due diligence
procedures utilized to screen and monitor hedge funds, including development of relevant
NASD standards and analysis of files, personnel testimony, emails and memoranda.
• Testified in Florida State Court on investment due diligence procedures and findings relating to
capital financing of a property and casualty insurance carrier, including statutory accounting
financial forecasts, surplus deficiencies and regulatory constraints. Mr. Lundelius was qualified
as an expert in insurance company financing and acquisition due diligence.
• As an investment banker, structured underwritings of securities offerings for Blockbuster and
Precision Tune franchises, including development of accounting and cash flow forecasts, review
of franchise agreements and assessments of markets to value financial interests sold to
investors.
• As basis for other investment banking underwritings, valued numerous businesses and
business units in the following fields: biotechnology and medical diagnostics, real estate, oil &
gas, environmental remediation, wholesale and retail distribution of consumer products, office
and industrial construction, automotive and motorcycle dealerships, and service firms.
Investment vehicles utilized included public offerings, private placements and master limited
partnerships.
• Performed due diligence investigations of direct investment programs involving real estate, oil &
gas, food processing, biotechnology and medical diagnostics for a major wirehouse and other
broker/dealer clients and valued restricted stock and illiquid debt and equity investments related
to those programs.
Other Due Diligence and Valuation Matters
• Testified in Florida state court as an expert in post-acquisition disputes regarding alleged fraud
in financial reporting of the purchase of a manufacturing division by a Tier One automotive
manufacturer and supplier. Analysis involved extensive investigation of accounting reserves
(ASC 450 – Contingencies) for acquisitions made by the seller to allegedly hide losses as well
as quantification of damages due to alleged underperformance hidden by fraudulent
accounting.
• On behalf of Hewlett Packard Enterprises, testified at arbitration regarding accounting treatment
(under ASC 840 - Leases) of thousands of leases transferred in a Reverse Morris Trust
business combination. Work involved assessment of lease quantities under various scenarios
and asset/liability determinations. In addition, consulted on enterprise value calculations made
by the parties during the merger process.
• Regarding a separate Reverse Morris Trust business combination involving major government
defense contractors, evaluated the revenue recognition of customer advances and progress
24
payments for government contractors. Analysis included tax reporting under Rev. Proc. 2004-
34, Changes in accounting periods and in methods of accounting
40
as well as financial reporting
under ASC 912 - Contractors – Federal Government.
• Testified in federal district court as damages expert in copyright infringement suit against
publisher on issues involving marketing of copyright matter, direct mail advertising, and
profitability.
• Testified in federal bankruptcy proceeding regarding the allocation of purchase price to
intellectual property and goodwill for assets sold by debtor, a software developer of supply
chain management systems.
• Testified in federal tax court regarding value of an interest in insolvency in an Australian mining
company. Mr. Lundelius was qualified as an expert in valuation in that matter.
• On behalf of a municipality, analyzed damages from alleged government interference in debt
collection efforts by a major operator of health and fitness centers. On behalf of a major fitness
celebrity, determined damages due to alleged breach of contract by a national chain of diet
centers.
• On behalf of a student loan origination firm, calculated damages due to alleged servicing
failures, including debt collection operations. On behalf of a regional bank, assessed damages
due to alleged servicing failures on multiple consumer loan portfolios. For both engagements,
portfolios of student and consumer loans aggregated to more than $800,000,000. In a separate
matter, after the collapse of a student loan originator, analyzed liability and damages relating to
securitizations with over $400,000,000 of loan pools.
• On behalf of a regional bank, assessed dealer reserve chargebacks due to loan chargeoffs for a
mortgage loan originator. Work involved evaluating minimum reserves required and
performance of loans assigned to the bank.
• On behalf of Resolution Trust Corporation, documented fraudulent lending within real estate
mortgage portfolio of failed thrift, analyzing failures to follow lending policies and procedures.
• On behalf of major sports stadium association, preformed due diligence and valuation of
multiple hotel properties, including franchises and luxury properties.
• Valued biotechnology patent utilizing offers in restricted stock from various early-stage
biotechnology firms.
• Applied Capital Asset Pricing Model to intellectual property litigation for a $60 million
polyethylene process patent claim asserted by one Fortune 50 company against two other
40
Revenue Procedures are issued by the U.S. Dept. of the Treasury Internal Revenue Service to provide guidance in the
implementation of income tax regulations.
25
Fortune 50 companies, including regression analyses of intermediate product values, and
determined the basis for an antitrust counterclaim.
• Valued semiconductor technology, including forecasts of product development life cycles and
performed R&D cost analyses for patent infringement claim by a European information
technology firm against a supplier to major automotive manufacturers.
• Served as expert witness on behalf of a software development firm to assess damages,
determine counterclaim under software licensing agreement and value software in suit filed by a
nationwide provider of multiple listing services to real estate agents.
• Testified in federal district court on behalf of multinational food processing and distribution firm
regarding damages resulting from alleged breach of exclusive territory agreement with
distributor.
Insurance Expertise
When numerous investigations by US and foreign regulators focused on finite reinsurance treaties, bid
rigging and other insurance issues, Mr. Lundelius was called upon to assist in the analysis of auditing
issues, risk transfer, and internal control. In the course of serving on several investigations, both in the
US and in Europe, Mr. Lundelius has reviewed hundreds of reinsurance treaties in both the property
and casualty and life and health segments covering workers’ compensation, life, casualty and other
risks worldwide.
Among his specific engagements, Mr. Lundelius:
• On behalf of Hank Greenberg and Howie Smith relating to charges brought by the New York
Attorney General, testified regarding compliance with the COSO Internal Control - Integrated
Framework at American International Group (“AIG”) relating to reinsurance treaties and
consolidation of special purpose entities. The assessment included analysis of transfer of risk,
including ASC 450 – Contingencies and ASC 944-20-15 - Reinsurance and SSAP 62R -
Property and Casualty Reinsurance.
41
Analysis also included review of loss development and
disclosures in AIG affiliate property and casualty statutory filings, especially Schedule P. In a
separate defamation case brought by Hank Greenberg against Elliott Spitzer, analyzed the
2005 restatement of AIG financial statements from 2000 – 2004. Analysis included extensive
review of audit work papers over the entire period, assessment of risk transfer and other
accounting positions taken by AIG management under Mr. Greenberg and by his successors,
and evaluation of the propriety of each restatement item.
41
An “SSAP” is a Statement of Statutory Accounting Principles for insurance companies domiciled or licensed in the
United States.
26
• On behalf of Global Bankers Insurance Group (“GBIG”), testified in New York Supreme Court
regarding the bidding process for the sale of Lincoln Benefit Life Insurance Company and the
representations made by GBIG relating to its bid. Assessment included extensive forensic
analysis of discussions with regulators in five states and the financial condition
of GBIG carriers.
As to damages, Mr. Lundelius and his team analyzed actuarial cash flow projections used in the
bidding process. Mr. Lundelius was qualified as an expert in Statutory Accounting Principles
and acquisition due diligence under the Insurance Holding Company System Regulatory Act. In
his opinion in this matter, Justice Ostrager cited Mr. Lundelius’ testimony on several issues,
accepted his findings on regulatory disclosure, and accepted his findings on cash flow
forecasts.
42
• In a separate matter, testified on behalf of GBIG in North Carolina state court relating to the fair
value of affiliated assets. Mr. Lundelius was qualified as an expert in insurance statutory
accounting principles.
• On behalf of Companion Property and Casualty Insurance Company, an affiliate of Blue Cross-
Blue Shield, testified regarding the operation and due diligence of fronting carriers, including
reinsurance and reserve credit trusts. Analysis also included valuation requirements of the
trusts and standards required under ASC 820 – Fair Value Measurement and SSAP 100 - Fair
Value Measurements.
• On behalf of Metropolitan West Securities, a unit of Wells Fargo, analyzed investment suitability
of Structured Investment Vehicle (SIV-lite) Asset Backed Commercial Paper and related due
diligence regarding collateral for securities loaned by California’s State Compensation
Insurance Fund (“SCIF”). Investments included asset-backed commercial paper issued prior to
the Financial Crisis. Evaluation included ability of SCIF to absorb losses through analysis of
California Insurance Code restrictions on investments and requirements for investment
approval, as well as assessment of Risk-Based Capital and other insurance reporting issues.
• On behalf of a major, publicly traded European insurance carrier, analyzed the claims made by
an internal audit whistleblower relating to hedging and segregation of duties. Analysis included
assessment of macro-hedging strategy and internal control requirements under the COSO
Internal Control - Integrated Framework and Auditing Standard 5. In addition, Mr. Lundelius
reviewed actuarial analyses, financial statements prepared under US GAAP and IFRS, and
filings with US Department of Labor and the UK Prudential Regulatory Authority.
• On behalf of Lynn Tilton, analyzed the statutory filings of MBIA Insurance Corp., a monoline
bond insurance carrier, and the SEC filings of its parent, MBIA, Inc.
• On behalf of a regional financial institution, testified, in Florida State Court, on investment due
diligence procedures and findings relating to capital financing of a property and casualty
42
Decision After Trial, GBIG Holdings, Inc., et al. v. Resolution Life L.P., et al., Index No. 653258/2019, May 12, 2021.
27
insurance carrier that the Florida Office of Insurance claimed could have been rehabilitated. Mr.
Lundelius reviewed statutory accounting financial forecasts, underwriting practices, forecast
surplus deficiencies and assessed regulatory constraints. Mr. Lundelius was qualified as an
expert in insurance company financing and acquisition due diligence under the Insurance
Holding Company System Regulatory Act.
• On behalf of a regional accounting firm, testified, in Texas State Court, regarding auditing and
accounting issues relating to a workers’ compensation carrier that the Oklahoma Insurance
Department claimed was insolvent. Mr. Lundelius analyzed audit work papers and programs,
underwriting and case reserve practices, reinsurance and regulatory examinations. Mr.
Lundelius was qualified as an expert in auditing and forensic accounting, and his testimony also
covered damages as a result of deepening insolvency involving valuation of the carrier on
various dates.
• Consulted with a major health insurance company licensed in all US jurisdictions regarding
prompt-pay requirements under workers’ compensation statutes, including detailed analysis of
underwriting, claims operations and reserves. Analyses also covered financial reporting and
disclosures in SEC filings and discussions with insurance regulators.
• Filed an expert report to calculate restitutionary damages for a putative class of employers that
purchased a certain workers compensation insurance product from Applied Underwriters.
Analysis included assessment of product components, rate filings, National Council on
Compensation Insurance data, and insurance company cost of capital.
• Was retained as an expert in reinsurance and solvency issues related to the collapse of
Reliance Insurance, a major workers’ compensation property and casualty carrier that was the
subject of a criminal investigation. As part of his work, Mr. Lundelius analyzed statutory and US
GAAP financial statements and assessed issues related to auditing, internal control, accounting
for reinsurance treaties and deposits, including ASC 944-20-15 - Reinsurance and SSAP 62R -
Property and Casualty Reinsurance, and analyzed changes to risk-based capital.
• Has consulted on the structuring of finite reinsurance contracts and has been engaged by major
US and European carriers to assess finite reinsurance arrangements, related to various SEC
and regulatory investigations, involving US GAAP and Statutory Accounting Principles, foreign
GAAP (Bermuda, France, Ireland, UK and Switzerland) and International Financial Reporting
Standards. His work has included conducting internal investigations of treaty negotiations with
insurance brokers and counterparties, risk transfer analyses among captives and affiliates, and
assessment of auditing and accounting practices and associated internal control, including
SSAP 61 - Life, Deposit-Type and Accident and Health Reinsurance and SSAP 62R - Property
and Casualty Reinsurance, as well as ASC 944-20-15 -Reinsurance and IFRS 4 - Insurance
Contracts.
28
• Advised on restructuring of bank credit facilities for major reinsurer and its offshore special
purpose reserve credit trusts for Regulation XXX, including review of ASC 825 - Financial
Instruments and SSAP 27 - Disclosure of Information about Financial Instruments disclosures.
Analysis involved assessment of subprime and other illiquid instruments and determination of
market values under both GAAP and Statutory Accounting Principles.
• Advised on strategic decisions relating to runoff for a $13 billion life and health reinsurer,
including assessment of regulatory restrictions imposed by US, Bermudan, Irish, British and
Cayman regulators, liquidity and cash flow forecasting, and US risk-based capital requirements
and related capital requirements in foreign jurisdictions. The engagement also involved
extensive analysis of special purpose vehicles, including ASC 810-10 - Consolidation – Variable
Interest Entities and ASC 860 - Transfers and Servicing issues, as well as ASC 825 - Financial
Instruments and related SSAP 27 - Disclosure of Information about Financial Instruments.
• With regard to life settlement acquisitions by a major insurance carrier from an industry leading
originator, evaluated transfer of risk with regard to Lender Protection Insurance Coverage
(“LPIC”) related to premium financing. The evaluation included analysis of LPIC claims history,
ASC 450 – Contingencies, and related salvage and subrogation issues.
• On behalf of Fifth Third Bank, testified regarding the obligations of a private equity investment
adviser when recommending investment in a premium finance lender for life settlements.
Testimony included assessment of impact of alleged structural flaws in life settlement
underwriting. Analysis also included evaluation of required rates of return for life settlement
investors.
• On behalf of a major property and casualty insurance carrier’s US operations, consulted on bid
rigging and market conduct investigations by numerous state insurance commissions.
• On behalf of Charles Schwab & Co., testified at FINRA arbitration regarding the appropriate
governance structure and board fiduciary duties with respect to investment selection and
monitoring by a property and casualty insurance carrier. Analysis included assessment of
interaction between the NAIC Model Investment Act and company-specific controls over
investing, role of the NAIC SVO
43
in accordance with the Purposes and Procedures Manual of
the NAIC Investment Analysis Office, permissible investments and investment disclosures on
Schedule D of NAIC filings, and impact of investing on profitability and surplus.
• On behalf of several carriers, testified regarding the operations of the broker-dealer distributor
within a major fund complex relating to a professional liability insurance claim. Testimony
included analysis of investment and brokerage industry terms and practices relating to delayed
transactions.
43
“NAIC SVO” is the Securities Valuation Office of the National Association of Securities Commissioners in the United
States.
29
• With regard to sales of insurance products to wealthy families, determined suitability relative to
alternative investments.
• On behalf of major health insurer, consulted on unlocking of ASC 944-20 -Insurance Activities
reserves, including discussions with SEC staff in the Office of Chief Accountant, and advised on
ASC 825 - Financial Instruments and SSAP 27 - Disclosure of Information about Financial
Instruments issues.
• On behalf of a major health insurance carrier, analyzed classifications and disclosures of
investments under SSAP 27 - Disclosure of Information about Financial Instruments and
directed negotiations with NAIC SVO on re-classification of securities.
• Has conducted internal investigations of corporate officers relating to existence of reinsurance
side agreements, documentation of risk transfer analyses, and violations of auditing standards
and internal control.
Previously, Mr. Lundelius served as CFO of a life and health insurance carrier that reinsured books of
business placed with major insurance companies. As CFO, the scope of duties Mr. Lundelius
performed included the following:
• Valuation of books of business and insurance company operating units for purposes of financial
reporting and capital acquisition.
• Negotiation of reinsurance treaties and surplus debenture financing.
• Management of variable life and annuity investment products through captive sales force.
• Development of integrated financial and regulatory forecasting systems, including re-scoping of
general ledger and chart of accounts.
• Management of and financial reporting for government bond investment portfolio.
• Participation in the NAIC pilot study for implementation of risk-based capital adequacy
standards.
• Implementation of product line profitability reporting systems.
• Design of hierarchical agent commission and debit advance systems.
• Discussions with auditors and SEC regarding applications of GAAP, including ASC 450 –
Contingencies, ASC 944-20 - Insurance Activities, especially ASC 944-20-05 - Long Duration
Contracts and Reinsurance.
• Managing the audit process, internal audit and auditor inquiries.
• Translation of actuarial data and projections into financial and regulatory formats.
• Interaction with regulators, investment bankers and commercial lenders.
30
• Financial management of underwriting and claims functions.
Publications and Selected Speeches
• “Financial Firm Spotlight – Enforcement and Regulatory Developments for Asset Managers,
Broker-Dealers, Hedge Funds and More”, Securities Enforcement Forum West 2020, panelist,
May 12, 2020.
• “How to Respond to the SEC’s Increased Focus on Valuations and Impairments”,
Practising
Law Institute, co-presenter, June 24, 2019.
• “Hedge Fund Innovation and Regulatory Enforcement”, presentation before faculty and students
at the Freeman School of Business, Tulane University, October 23, 2017.
• “SEC’s Non-GAAP Guidance Should Be Withdrawn”, CFO.com, May 18, 2017.
• Panelist, Key Issues Facing Boards of Directors: New SEC Enforcement Initiatives and
Corporate Governance Risks, April 5, 2017.
• “SEC’s Expanded Use of Administrative Proceedings: How an Expert Can Help”, Westlaw
Journal Derivatives, Vol. 20, Issue 15, June 20, 2014.
• IFRS Conference sponsored by the New York State Society of Certified Public Accountants
Foundation for Accounting Education, Inc., panelist, October 22, 2013.
• “Expert Witnesses: Dos and Don’ts of Complex Securities Enforcement Cases”, panelist,
Berkeley Research Group seminar, October, 31 2013.
• “SEC Guidance on Reg FD for Social Media Communication”, Corporate Compliance Insights,
May 29, 2013, co-authored with Karina Bjelland.
• Hedge Fund Regulation Conference, speaker, London, United Kingdom, November 22, 2010.
• “Hedge Fund Disclosure: The Best Defense for an Industry Under Siege”, by Adam Cohen with
contribution from Charles Lundelius, FTI Journal, Spring 2010, Issue 2.
• “Keeping Track of Funds To Avoid Getting Sued and Other Nasty Things”, presentation at the
Treasurers Workshop sponsored by the Episcopal Diocese of Washington, December, 2008.
• “Insurers Face Repercussions of New Accounting Options”, National Underwriter Property &
Casualty, December 10, 2007, co-authored with Mark Radke and John Pruitt of Dewey &
LeBoeuf, LLP.
• Presentation and panel discussion at the International Reinsurance Summit, Bermuda, June 8,
2007, on reinsurance investigations and auditing procedures involving side agreements and
other issues.
• “Risk Analyses Unique to Emerging Markets,” Financier Worldwide, March, 2007.
31
• “Reinsurance Accounting Issues,” Presentation for Practicing Law Institute Reinsurance Law
and Practice seminar, October 7, 2005.
• “Where to find fraud in closely held companies”, The Practicing CPA, November 2003
[adaptation of Chapter 5 of Financial Reporting Fraud: A Practical Guide to Detection and
Internal Control].
• “Disclosing Guesswork,” The National Law Journal, September 8, 2003.
• “Balance sheet becomes breeding ground for fraud”, Journal of Accountancy, May 2003
[adaptation of Chapter 4 of Financial Reporting Fraud: A Practical Guide to Detection and
Internal Control].
• Financial Reporting Fraud: A Practical Guide to Detection and Internal Control, a book
published by the American Institute of Certified Public Accountants, first edition 2003, second
edition 2010.
• “Risk Management and the Audit Committee,” (co-author) The Corporate Board,
September/October 2002
• Before the American Institute of CPAs’ National Conference on Fraud:
October 31, 2002 - “CPA’s Role in Securities Litigation”
October 2, 2003 - “Forensic Accounting Case Studies”
• “Reducing the Risk of Financial Statement Fraud,” Chapter 10 of The CPA’s Handbook of Fraud
and Commercial Crime Prevention, American Institute of Certified Public Accountants, March
2001.
• Presentation on financial reporting issues at the Eastern Region Fraud Conference, November
3, 2000.
• “Post Reform Act Standards for Pleading and Proving Scienter,” seminar sponsored by Deloitte
& Touche LLP and Kirkpatrick & Lockhart LLP, October 19, 1999.
• “How Much Is A Stock Worth?” article in Hearsay (published by Deloitte & Touche LLP), May
1999.
• “Beyond SAS 82: International Issues in Fraud & Forensic Accounting,” before the faculty and
students of the University of Virginia McIntire School of Commerce, October 21, 1998.
32
Certifications
Certified Public Accountant since 1982
Accredited in Business Valuation since 2002
Certified in Financial Forensics since 2008
AICPA IFRS Certificate Program - 2015
COSO Internal Control Certificate Program - 2016
Professional Affiliations
American Institute of Certified Public Accountants since 1983
Beta Alpha Psi Honorary Accounting Fraternity - 1978
Beta Gamma Sigma Honorary Business Fraternity - 1980
Education
M.B.A. with a concentration in Finance, Tulane University, 1980
B.S. in Commerce with a major in Accounting, University of Virginia, 1978
CHARLES R. LUNDELIUS, JR., CPA/ABV/CFF
Expert Testimony Case History
Page 1
Year
Case
Court/
Agency
Case or Docket No.
Party
Represented
Deposition
Trial/
Hearing
2023 Edelman Financial Engines, LLC v. Scott Butera American Arbitration
Association
01-22-0003-4780
Claimant
1
2022 Commissioner of Insurance of North Carolina v.
Southland National Insurance Corporation, et al.
North Carolina
Superior Court, Wake
County
19 CVS 008664 Respondents 1
2022 Casey Roberts, et al., v. Zuora, Inc., et al. U.S. Dist. Ct., N.D.
California
3:19-cv-03422 Plaintiffs 1
2022 Wells Fargo Advisors, LLC, v. Raymond James Financial
Services, Inc., et al.
Financial Industry
Regulatory Authority
20-02796 Claimants 3
2018
and
2022
Norddeutsche Landesbank Girozentrale and Hannover
Funding Company LLC v. Lynn Tilton; Patriarch
Partners, LLC; et al.
Supreme Court of the
State of New York –
New York County
651695/2015 Defendants 1 1
2017
and
2021
Lynn Tilton and Patriarch Partners XV, LLC, v. MBIA,
Inc. and MBIA Insurance Corporation
Supreme Court of the
State of New York –
Westchester County
68880/2015 Plaintiffs 1 1
2021 Securitized Asset Funding 2011-2, Ltd. v. Canadian
Imperial Bank of Commerce
Supreme Court of the
State of New York –
New York County
653911/2015 Defendant/
Counterclaim-
Plaintiff
1
2021 Sean Rad, et al., v. IAC/Interactive Corp, et al. Supreme Court of the
State of New York –
New York County
654038/2018 Plaintiff/
Counterclaim-
Defendant
1 1
2021 Securities and Exchange Commission v. Mack and Blaney U.S. Dist. Ct.,
Minnesota
19-cv-918 Defendant
Blaney
1
2021 Southland National Insurance Corporation, in
rehabilitation, et al. v. Academy Association, Inc., et al.
North Carolina
Superior Court
19 CVS 013093 Defendant 1
2020 Paul C. Schorr IV and BG/BLK-1 LP v. The Blackstone
Group, Inc, et al.
ICC International Court
of Arbitration
25390/MK/PDP Claimants 1
2020
and
2021
GBIG Holdings, Inc. v. Resolution Life L.P., et al.
Supreme Court of the
State of New York –
New York County
650575/2019
653258/2019
Plaintiffs/
Counterclaim
Defendants
1 1
CHARLES R. LUNDELIUS, JR., CPA/ABV/CFF
Expert Testimony Case History
Page 2
2020 YA Global Investments, LP, et al. v. Commissioner of
Internal Revenue
US Tax Court 14546-15 Petitioners 1 1
2019 Maurice R. Greenberg v. Eliot L. Spitzer Supreme Court of the
State of New York –
Putnam County
1436/2013 Plaintiff 1
2015
and
2019
In the Matter of Cyios Corporation, et al.
United States Securities
and Exchange
Commission
3-16386
SEC Division
of
Enforcement
2
2019 United States of America v. David Middendorf, et al. U.S. Dist. Ct., S.D.
New York
18 CRIM 036 Defendant 1
2019 DXC Technology Company v. Hewlett Packard Enterprise
Company
International Institute
for Conflict Prevention
& Resolution
Defendant 1 1
2018 Christopher and Lori Davis v. Wells Fargo Advisers,
LLC; Wells Fargo Bank, N.A.; Wells Fargo & Company
American Arbitration
Association
01-14-0001-6223 Respondents 1
2017 Companion Property and Casualty Insurance Company v.
U.S. Bank National Association
U.S. Dist. Ct., South
Carolina
3:15-1300-JMC
Plaintiffs
1
2017 Securities and Exchange Commission v. Yorkville
Advisors, LLC, et al.
U.S. Dist. Ct., S.D.
New York
12 CIV 7728 Defendants 2
2017 Nina Investments, LLC, v. Fifth Third Bank, et al. Circuit Court of Cook
County, Illinois
2012 L 007547 Defendants 1
2016 In the Matter of Lynn Tilton; Patriarch Partners, LLC; et
al.
United States Securities
and Exchange
Commission
3-16462 Respondents 1
2016 TIAA-CREF Individual & Institutional Services, Inc., et
al. v. Illinois National Insurance Company, et al.
Delaware Superior
Court (New Castle)
N14C-050178-
JRJ(CCLD)
Defendants 1
2016 Cannonball Fund, Ltd., et al., v. Dutchess Capital
Management, LLC, et al.
Commonwealth of
Massachusetts
Civil Action No. 11-
2307
Defendants 1
2016 International Fidelity Insurance Company v. Charles
Schwab & Co., Inc.
Financial Industry
Regulatory Authority
14-02620 Respondents 1
2015 In re MF Global Holdings, Ltd., Investment Litigation U.S. Dist. Ct., S.D.
New York
1:11-cv-07866 Defendants 1
2015 Gleacher & Company Securities, Inc. v. Robert W. Baird Financial Industry 13-00608
Claimants 2
CHARLES R. LUNDELIUS, JR., CPA/ABV/CFF
Expert Testimony Case History
Page 3
& Co. Incorporated, et al.
Regulatory Authority
2014 [Individual] v. Jackson National Life Insurance Co. and
Prudential, PLC.
U.S. Dept. of Labor 2013-SOX-00047
Respondents 1
2014 The People of the State of New York v. Maurice R.
Greenberg and Howard I. Smith
Supreme Court of the
State of New York –
New York County
401720/05
Defendants 1
2014 Massachusetts Mutual Life Insurance Company v.
Countrywide Financial Corporation, et al.
U.S. Dist. Ct.,
Massachusetts
11-cv-10414-MRP
Respondents 1
2014 Hillcrest Children’s Center, et al. v. Charles Schwab &
Co., Inc.
Financial Industry
Regulatory Authority
13-00664 Respondents 1
2014 Acument Global Technologies, Inc., et al. v. Towers
Watson & Co., et al.
U.S. Dist. Ct., S.D.
New York
1:12-cv-00506-LLS Plaintiffs 1
2014 Pasha Anwar, et al. v. Fairfield Greenwich Limited, et al. U.S. Dist. Ct., S.D.
New York
09-cv-118 Defendants 1
2013 Pine Street Associates, L.P. v. Southridge Partners, L.P.,
Southridge Capital Management, LLC, and Southridge
Advisors, LLC
Supreme Court of the
State of New York,
County of New York
652109/2010 Respondents 1
2013 Eastham Capital Appreciation Fund LP, et al., v. KPMG
LLP
International Institute
for Conflict Prevention
& Resolution
Respondents 1
2013 Texas A&M Foundation v. Strategic Investment
Management, L.P. and Strategic Investment Partners, Inc.
American Arbitration
Association
16 148 Y 00396 10 Claimants 1
2013 Anders and Elizabeth Hejlsberg, derivatively on behalf of
Cornerstone Alternative Fixed Income Fund, L.P., as a
Limited Partner, v. Cornerstone Portfolio GP, LLC, Keith
J. Schafer, Robert Trenner, Kenneth Hart and Cornerstone
Advisors, Inc.
American Arbitration
Association
75-512-Y-000062-12
JMLE
Claimants 1
2012 Securities and Exchange Commission v. Southridge
Capital Management LLC, Southridge Advisors LLC, and
Stephen M. Hicks
U.S. Dist. Ct.,
Connecticut
3:10-cv-01685 Defendants 1
2012 Securities and Exchange Commission v. Kimon P.
Daifotis and Randall Merk
U.S. Dist. Ct., N.D.
California
CV-11-cv-137 Defendants 1
2012 State Compensation Insurance Fund v. Metropolitan West
Securities LLC; Wachovia Bank, N.A.; et al.
U.S. Dist. Ct., N.D.
California
CV 09 2959 JSW
(EDL)
Defendants 1
CHARLES R. LUNDELIUS, JR., CPA/ABV/CFF
Expert Testimony Case History
Page 4
2011 Securities and Exchange Commission v. Lisa C. Berry U.S. Dist. Ct., N.D.
California
C-07-04431 RMW Defendant 1
2011 Securities and Exchange Commission v. R. Brooke Dunn
and Nicholas P. Howey
U.S. Dist. Ct., Nevada 2:09-CV-02213-PMP-
LRL
Defendant 1
2011 Securities and Exchange Commission v. Reserve
Management Company, Inc., Resrv Partners, Inc., Bruce
R. Bent, Sr. and Bruce R. Bent II
U.S. Dist. Ct., S.D.
New York
09 Civ. 4346 (PGG) Defendants 1
2011 Hampton Investments, Ltd.; Oakdale Investments, Ltd.;
Seacliff Investments, Ltd.; and Stephen Finlay v. GPS
Partners, LLC; GPS New Equity Fund (Cayman), Ltd.;
and GPS Income Fund (Cayman), Ltd.
American Arbitration
Association
50512 T
00097 10
Defendants 1
2010 Elliot Horowitz v. Gardner Lewis Asset Management California Superior
Court for the County of
Los Angeles
BC406551 Defendants 1 1
2009 -
10
Securities and Exchange Commission v. Carl W. Jasper
U.S. Dist. Ct., N.D.
California
CV 07-6122
Defendant
1 1
2008 Charles O. Bradley Trust, et al., v. Zenith Capital, LLC, et
al.
U.S. Dist. Ct., N.D.
California
C 04 2239 JSW (EMC) Plaintiffs 1
2008 Kim Holland, Insurance Commissioner of the State of
Oklahoma, as Receiver of Petrosurance Casualty
Company, v. Murrell, Hall, McIntosh & Co., PLLP, et al.
District Court – 44
th
Judicial District, Dallas
County, Texas
04-01687-B Defendants 3 1
2006 Steven Maass v. E*Trade Professional Trading, LLC, et
al.
Financial Industry
Regulatory Authority
03-01763 Respondents 1
2006 - 8 Securities and Exchange Commission v. Competitive
Technologies, Inc., et al.
U.S. Dist. Ct.,
Connecticut
3:04-cv-1331-JCH
Defendants
1 2
2005 - 6 The Osage Nation and/or Tribe of Indians of Oklahoma v.
The United States of America
Federal Claims Ct. 99-550 & 00-169 L Defendant 1 1
2005 - 6 Breed Technologies, Inc. v. AlliedSignal, Inc. FL Cir. Ct., 10
th
Dist. G-99-2478 Plaintiff 3 2
2005 In re: Galaxy Computer Services, Inc. U.S. Dist. Ct., E.D. Va. CA 1:2004CV1036 Plaintiff 1
2005 National Association of Securities Dealers Department of
Enforcement v. Invemed Associates, LLC
Financial Industry
Regulatory Authority
Disciplinary Proceeding
No. 030014
Respondent 1
2005 Jo Ann Oster, et al. v. CIBC World Markets Corp., et al. Financial Industry
Regulatory Authority
03-07585 Respondents 1
CHARLES R. LUNDELIUS, JR., CPA/ABV/CFF
Expert Testimony Case History
Page 5
2004 National Rural Electric Cooperative Association, et al. v.
Breen Capital Services Corporation, et al.
U.S. Dist. Ct., New
Jersey
2:00cv00722 Plaintiffs 1
2004 United States of America v. Nathan A. Chapman, Jr. U.S. Dist. Ct.,
Maryland
WDQ-03-0301 Defendant 1
2004 Securities and Exchange Commission v. David Gane, et
al.
U.S. Dist. Ct., S.D.
Florida
03-61553-CIV-
Seitz/Bandstra
Defendants 1 1
2004 Mountain States Mutual Casualty Company v. UBS
PaineWebber, Inc.
Financial Industry
Regulatory Authority
02-05813
Respondent
1
2003 Hermann Holdings, Ltd., et al. v. Lucent Technologies
Inc.
U.S. Dist. Ct., N.D.
Texas
3:01-CV-0625-G Defendant 1
2003 In re: The Receivership of Dealers Insurance Company Second Judicial Circuit
Court, Leon County, Fl.
94-4009-A Defendant 1 1
2002 In re: SpaceWorks, Inc. U.S. Bankruptcy Court,
Md.
01-17875-PM Unsecured
Creditors
1 1
2001 InterVest Financial Services, Inc. v. Bear Stearns Co.,
Inc., et al.
U.S. Dist. Ct., E.D. Pa. 99-CV-5463 Defendants 1
2001
Carabetta v. Novadigm, Inc., et al.
American Arbitration
Association
74 160 01455 00 AD1
Plaintiff
1 1
2000
Bennett v. Wheat First Union, et al.
Financial Industry
Regulatory Authority
99-02219
Claimant
1
1999
Helman v. Mendelson, et al.
Circuit Court of
Maryland for
Montgomery County
CA 195927 cons
195925
Plaintiff
1
1999 In the Matter of WHX Corporation United States Securities
and Exchange
Commission
3-9634 Respondent 1
1999 American Federal Savings Bank v. Harry L. Leavy Circuit Court of
Maryland for
Montgomery County
167641–V Plaintiff 1
1998 Berliner Specialty Distributors v. Conopco a/k/a Good
Humor-Breyers Ice Cream
U.S. Dist. Ct., E.D. Va. 98-143-A Defendant 1 1
1998 Associated Financial Group v. Chevy Chase Bank U.S. Dist. Ct., E.D. Va. 2:97 CV 985 Defendant 1
CHARLES R. LUNDELIUS, JR., CPA/ABV/CFF
Expert Testimony Case History
Page 6
1997 White v. Cahoon and Anchor National, et al. U.S. Dist. Ct., N.D.
Miss.
4:95 CV 374-B-B Plaintiff 1
1997 Powter v. Nutri/System L.P. et al. U.S. Bktcy. Ct., C.D.
Cal.
LA 95-10009-SB Plaintiff 1
1997 Weiner, et al. v. Dickinson & Co., et al. Financial Industry
Regulatory Authority
95-04047 Claimants 1
1996
Robinson v. R&R Publishing, Inc. U.S. Dist. Ct., D.C.
95-CA-00833
Plaintiff/
Cross-
Defendant
1
1996 Frank W. Griswold, III, et al. v. The United States of
America
U.S. Dist. Ct., M.D.
Fla.
93-565-CIV-T-23A Defendant 1
1995-
1996
In the Matter of Lend Lease Trucks, Inc.
Pennsylvania
Department of Revenue
and Board of Finance
and Revenue
421919 MCRT
Petitioner
1
1
1995
Simos v. Metzger Construction Co. and Sub-Zero Freezer
Co.
125
th
Judicial Dist. Ct.
of Harris Co., Tex.
91-016216
Plaintiff
1
1994
Forman Brothers, et al., v. The Law Firm of Graham &
James, et al.
Superior Ct. for the
District of Columbia
CA 92-7919
Defendants
1
1994
Stoneman v. Stoneman
Henrico Co., Va. Cir.
Ct.
CH-91- 001234
Plaintiff
1
*
1994
Ace Sign v. Southwestern Bell Yellow Pages, Inc.
58
th
Judicial Dist. Ct.,
Jefferson Co., Tex.
A-137,152
Defendant
1
1993
UST Services, Inc., v. Southwestern Bell Yellow Pages,
Inc.
234
th
Judicial Dist. Ct.,
Harris Co., Tex.
91-055806
Defendant
1
1992-
1994
Tele-A-Call Answering Service v. Southwestern Bell
Yellow Pages, Inc.
122
nd
Judicial Dist. Ct.,
Galveston Co. Tex.
90CV0917
Defendant
1
1
* Deposition testimony entered at trial.
