William J. Kelly

Attorney in New York, NY
Bill Kelly focuses his practice on financial professionals, providing comprehensive legal services in connection with risk management, government investigations, commercial negotiations, and partnership and practice issues. He has experience with all types of claims brought against accounting firms as well as financial planners, investment advisers, broker-dealers and registered representatives. Bill counsels and defends his clients in state, FINRA and SEC regulatory and enforcement actions.

With an in-depth understanding of the services financial professionals provide as well as how they conduct their practices, Bill translates this knowledge into effective presentations to judges and juries. He appreciates the issues of most importance and recognizes what clients need from their legal counsel to keep their practice moving forward in the face of litigation or investigation.

Areas of Focus

Accountants
Among his current engagements, Bill is representing accounting firms in several malpractice actions arising from the Chinese reverse merger phenomenon in which entities formed through the merger of Chinese companies into U.S. companies and traded on U.S. stock exchanges have been found to be fraudulent. Bill also has defended clients in RICO, breach of contract and general business disputes and has counseled accounting firms and individual accountants in connection with civil and criminal governmental investigations.

Among his many successful results for clients, Bill negotiated a “no pay” settlement concerning an accountant’s alleged malpractice involving a closely held mining company; he secured a “no pay” settlement of claims against a financial adviser to an investment brokerage firm in connection with the firm’s bankruptcy; and he has secured dismissals of a variety of claims against accounting firm clients. Several of Bill’s favorable decisions have received front page coverage in the New York Law Journal.

In addition to malpractice actions, Bill has successfully defended firms involved with auditing government subsidized housing developments against civil Racketeer Influenced and Corrupt Organizations (RICO) Act issues and fraud claims. He also has argued and won appeals involving claims against accountants and other professionals.

Bill’s full-service practice includes assisting accountant client in responding to inquiries and subpoenas issued by the Securities and Exchange Commission (SEC), Commodities Futures Trading Commission (CFTC), Financial Institutions Regulatory Authority (FINRA), and other governmental and quasi-governmental agencies in connection with both civil and criminal investigations at the state and federal level.

Publications

Evolving International Regulations on Client Data Put More Pressure on Accounting Firms

Accounting & International Regulations on Client Data

May 22, 2014

Not surprisingly, regulations on client data already seem to be behind the technology. As more and more accounting firms begin storing data “in the cloud,” it is not clear who controls the data under the various regulations or even if such storage would constitute a transmission of the data governed by other regulations.

New Rules Proposed by PCAOB Include Sweeping Changes for Audit Reports

PCAOB Seeks Comments by 12/11/13 on Proposed Changes

November 11, 2013

The Public Company Accounting Oversight Board has proposed changes that include requiring auditors to report on “critical audit matters” and “other information” included in documents that contain the financial statements, as well as additional disclosures from auditors, including auditor tenure.

Doesn’t the Accountant Do That?

Westchester County Business Journal

August 12, 2013

The Southern District of New York Dismisses Securities Fraud Claim Against Auditor, Establishing Important Guidance for Future Courts and Parties

NY: Comprehensive Decision on Auditor Liability for Audits of China-based Companies Traded on U.S. Exchanges

December 3, 2012

A recent decision in New York’s Southern District clearly articulates that an auditor’s conclusions are to be treated as opinions rather than as statements of fact. Thus, the legal question shifts from focusing on the underlying company’s alleged fraud to whether the auditor actually held the opinion it professed to hold and whether it had a reasonable basis to hold such an opinion.

Kelly and Vogel Published in DRI Newsletter

September 23, 2011

The article entitled, “The Janus Decision,” discusses a recent U.S. Supreme Court ruling in Janus Capital Group Inc. v. First Derivative Traders.

New York State Enacts CPA Mobility Bill Paving the Way for Cross-Border Practice for Out-of-State CPAs

August 2011

On Wednesday, August 17, 2011, New York State Governor Andrew M. Cuomo signed into law New York’s first CPA mobility statute, joining 47 other states that have enacted similar legislation.

Supreme Court Limits Rule 10b-5 Liability to Actual “Makers” of Allegedly Misleading Statements - Perhaps Not the Fraud Shield Predicted by Some

July 2011

As with any decision of this magnitude, it will take years for the full impact of this ruling to be appreciated. However, a large number of potential securities fraud defendants may now rest a little easier, knowing that so long as they do not have the “ultimate authority” to actually “make” a statement, they are shielded from at least one form of exposure and sometimes cripplingly expensive litigation.

Nonsigning Tax Return Preparers Required to Register with the IRS to Obtain a PTIN

January 2011

The IRS had set a deadline of January 1, 2011, for all tax return preparers to register or reregister with the agency to obtain a Preparer Tax Identification Number (PTIN).

Highest New York Court Strengthens Limits on Auditor Liability for Corporate Fraud

October 2010

On October 21, 2010, New York’s highest court, the New York State Court of Appeals, issued an opinion strengthening, and unambiguously reaffirming, the viability of the in pari delicto doctrine in limiting the liability of independent auditors and other outside professionals. The court found that the adverse interest exception to the general imputation principles underpinning the in pari delicto doctrine and related federal Wagoner doctrine is particularly narrow in scope under New York law. Generally, the court’s clarification of New York law provides that independent auditors may benefit from imputation to a corporation under the two doctrines so long as the agents actions do not completely deviate from the corporation’s interests. The decision is an important clarification of New York law and a clear limit on auditor liability in the context of corporate fraud.

New York court addresses liability of professionals for a client’s fraud

July 2010 Sticking one’s head in the sand may be a helpful way for an ostrich to avoid issues in life, but for professionals such as attorneys and accountants, this tactic can be risky. In a July 6, 2010, decision by the Appellate Division of the Supreme Court of the State of New York, First Department (the intermediary appellate court with authority over cases in Manhattan), the court sent a signal to professional services defendants that they may face expanded liability for the frauds perpetrated by their clients.

BDO International escapes liability for mistakes of member firm

June 2009

In a case closely watched by the accounting profession, a jury took only one hour to render a verdict in favor of BDO International (now known as BDO Global Coordination B.V.), saving that company, the umbrella organization of the BDO network, from huge vicarious liability for the acts of one of its member firms, BDO Seidman.

Inattention to engagement letter details leads to potential exposure for otherwise time-barred claims

June 2009

Carefully crafted engagement letters are one of the best risk management tools for accountants. The use of engagement letters across the broad and growing spectrum of services accountants provide is, however, sometimes uneven. The result can be disastrous.

Vicarious Liability Claims To Proceed To Trial: When Can an International Accounting Organization be Held Liable for the Acts of a Member Firm?

February 2009

In a recently issued decision, a federal trial court applied traditional rules of vicarious liability and concluded that issues of fact existed as to whether an international accounting organization might be held liable for the acts of one of its members. Accordingly, a case that could have significant effects on the structure and management of accounting organizations, and potential liability, will now proceed to trial.

Long awaited revisions to the education law mean additional obligations and opportunities for the New York accountant

February 2009

Governor David A. Paterson signed a bill on January 27, 2009, that imposes significant additional regulations upon accountants practicing in the State of New York. The bill amends the Education Law of New York applicable to the practice of accountancy in the state and becomes law six months from now. The new amendments will impact nearly all who practice within New York and, potentially, open the door for reciprocity with other states.

Revised regulations for greater taxpayer protection create additional duties and considerations for accountants

January 2009

The Treasury Department and the Internal Revenue Service have issued new regulations providing taxpayers improved safeguards and greater control over their tax return information held by tax return preparers. These new regulations create additional obligations for tax preparers and continue to impose criminal and civil liability for failure to adhere to those obligations.

Indemnification provisions in client engagement letters: Old tool given new life for limiting liability of accountants

January 2009

As we have repeatedly advised, carefully tailored engagement letters are of growing importance in reducing accountants liability exposure. There are numerous provisions incorporated in an engagement letter, some of which can protect the accountant from liability, both from the client and third parties. However, until recently, it was unclear if one of the most important contractual provisions would be enforced if placed in an accountant’s engagement letter: an indemnification and hold harmless provision.

Additional Publications

“The Janus Decision,” Defense Research Institute, Riding the E&O Line newsletter, September 19, 2011.
“BDO International Escapes Liability for Mistakes of Member Firm,” Wilson Elser Client Alert, July 8, 2009.
“Inattention to Engagement Letter Details Leads to Potential Exposure for Otherwise Time-Barred Claims,” Wilson Elser Client Alert, July 8, 2009.
“Vicarious Liability Claims to Proceed to Trial: When Can an International Accounting Organization Be Held Liable for the Acts of a Member Firm?,” Wilson Elser Client Alert, March 11, 2009.
“Long Awaited Revisions to the Education Law Mean Additional Obligations and Opportunities for the New York Accountant,” Wilson Elser Client Alert, March 5, 2009.
“Revised Regulations for Greater Taxpayer Protection Create Additional Duties and Considerations for
Accountants,” Wilson Elser Client Alert, February 10, 2009.
“Indemnification Provisions in Client Engagement Letters: Old Tool Given New Life for Limiting Liability of Accountants,” Wilson Elser Client Alert, February 10, 2009.

News

Securities Regulation Daily Covers Accountant’s Team’s Successful Motion to Dismiss

August 5, 2014

Accountants Team Scores Victory in Defending Securities Fraud Claim Involving China-Based Company

August 9, 2013

Wilson Elser Names 14 New Partners in New York

April 12, 2011 Wilson Elser has announced the promotion of 14 attorneys in New York to partner.

Events

The Good the Bad & The Ugly: Your Tax Practice, Professional Standards & Trouble

Speaking Engagements

February 2012

Lakeland Bank

Additional Events

“Managing Risk in Providing Services to High Net Worth Clients,” Broad Financial, Tarrytown, NY, February 2012.
“Ethics of Accounting Profession,” ADP and Chase Bank, New Hyde Park, NY, December 2011.
“Risk Management in a Litigious World,” New Jersey Society of CPAs, Mahwah, NJ, November 2011.
“Fraud Claims Against Accountants: An Overview,” Goshen, NY, November 2011.
“Ethics of the Accounting Profession,” Nassau Suffolk Chapter of The National Conference of Certified Public Accountant (CPA) Practitioners, Plainview, NY, August 2011.

914.872.7185
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Areas of Law

  • Appellate
  • Commercial & Business Litigation
  • Commercial Contracts & Agreements
  • Securities Industry Professionals
  • Data Privacy & Security
  • Government Investigations
  • Securities

 

Experience & Credentials

Position

Partner

Admission Details

Admitted in New York
U.S. District Court, Eastern and Southern Districts of New York
U.S. Court of Appeals, Second Circuit

Law School Attended

St. John's University School of Law
Class of 2000
J.D.
cum laude

University Attended

Binghamton University
Class of 1997
B.A.

Contact Information

Fax

914.323.7001

Phone

914.872.7185

Email

Send email to William J. Kelly


Office Information
William J. Kelly
Partner
 150 East 42nd Street,
New York, NY 10017-5639

Maintains an office in multiple locations
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Wilson Elser Moskowitz Edelman & Dicker LLP (New York, New York)

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