John Grugan
John Grugan

John C. Grugan

Partner

gruganj@ballardspahr.com
Tel 215.864.8226
Fax 215.864.8999
Philadelphia

John C. Grugan is a partner in the Litigation Department, Vice Chair of the Corporate and Government Investigations and White Collar Defense Group, and a member of the Insurance Group as well as the Financial Institutions Reform Task Force. Mr. Grugan focuses his practice on representing parties in enforcement proceedings brought by the Securities and Exchange Commission, directing corporate internal investigations, and on complex civil litigation.

In the area of SEC enforcement, Mr. Grugan regularly represents companies and individuals in matters in which insider trading, earnings management, accounting fraud, or other misconduct is alleged. He has significant experience conducting internal investigations on behalf of companies, their boards of directors, or their audit committees. Mr. Grugan is a frequent lecturer on the SEC enforcement process, conducting effective internal investigations, the attorney-client privilege in internal investigations, and directors' and officers' insurance coverage in government enforcement actions.

Mr. Grugan's practice also focuses on complex civil litigation. He has represented large and mid-sized companies in a wide variety of matters, including False Claims Act litigation, litigation under the Racketeer Influenced and Corrupt Organizations Act, and contract disputes. In addition, he maintains an active insurance practice and regularly represents insurers against claims of bad-faith conduct.

Before joining Ballard Spahr, Mr. Grugan served as a trial attorney in the U.S. Department of Justice Honor Program, Civil Division.

Recent Representative Matters

SEC Enforcement and Corporate Internal Investigations 

  • Represented and continues to represent individuals at all stages of the SEC enforcement process in matters where insider trading is alleged
  • Represented and continues to represent companies investigated by the SEC for alleged accounting fraud
  • Represented the audit committee of a publicly traded industrial pollution control and air-purification company in an SEC investigation relating to revenue recognition manipulation and misappropriation; the SEC did not take any action against the company
  • Represented the audit committee of a publicly traded defense contractor in a Sarbanes-Oxley investigation arising out of a whistleblower's allegations regarding a possible violation of the Foreign Corrupt Practices Act
  • Represented the audit committee of a publicly traded real estate investment trust in a Sarbanes-Oxley investigation relating to "tone at the top," which was alleged to have created a corporate environment in which management required inappropriately aggressive accounting
  • Represented the audit committee of a publicly traded weight-loss and nutrition company in a Sarbanes-Oxley investigation relating to the timing and propriety of a number of stock option grants

Complex Civil Litigation

  • Represented an international ship builder with operations in Philadelphia in a lawsuit brought under the federal False Claims Act; after extensive discovery, the plaintiff/relator agreed to voluntarily dismiss her False Claims Act claims
  • Represented an Ivy League medical school in a False Claims Act litigation relating to National Institutes of Health grants; obtained partial summary judgment
  • Represented a health system in a class action concerning employment practices; obtained dismissal of all RICO claims
  • Represented an insurer in an insurance "lost policy" case arising out of a malicious prosecution and wrongful imprisonment suit; obtained summary judgment
  • Represented a private school in an insurance dispute concerning the insurer's duty to defend; obtained summary judgment
  • Represented an insurer in a bad-faith action arising out of a significant fire that destroyed a beachfront condominium complex; as an alternative to litigation, Mr. Grugan was able to revive stalled discussions relating to an appraisal and obtained a voluntary dismissal of the contract and bad faith claims

Judicial Clerkships

Hon. James McGirr Kelly, U.S. District Court for the Eastern District of Pennsylvania

Professional Activities

American Bar Association

Pennsylvania Bar Association

Philadelphia Bar Association

Criminal Justice Act Panel for the U.S. District Court for the Eastern District of Pennsylvania, past member (2004-2006)

Philadelphia Hiring Committee, Ballard Spahr

Recognition & Accomplishments

Benchmark Litigation, "future star," litigation, 2009-2010

National Multiple Sclerosis Society, Leadership Honoree, 2005

LEADERSHIP Philadelphia, member, class of 2009

Publications

"Tone at the Top Part II," Metropolitan Corporate Counsel, July 2007

"Tone at the Top," Metropolitan Corporate Counsel, June 2007

"Discovery in the Philadelphia Court of Common Pleas," Pennsylvania Bar Institute's Philadelphia Court of Common Pleas Civil Practice Manual, April 2007, May 2009

"Risk Management For Prospective Outside Directors," Metropolitan Corporate Counsel, June 2006

In addition to writing articles for industry and trade publications, Mr. Grugan frequently authors Ballard Spahr Securities and Corporate and Government Investigations and White Collar Defense Alerts. His most recent alerts follow.

"Whistleblower Incentives, Greater Liability for Defendants Included in Senate's Financial Regulatory Reform Bill," May 18, 2010

Co-author, "Appeals Court Reins in Government on Executive Liability in Quarterly Filings," April 9, 2010

Co-author, "SEC Turns Up Already Bright Spotlight on Municipal Securities," February 19, 2010

"SEC Announces Appointments to Specialized Enforcement Units, Guidelines To Promote Individuals' Cooperation with Investigations," January 13, 2010

"Insurer Required To Provide a Defense to Defendants in Ponzi Scheme Litigation," January 6, 2010

"Eastern District Hands Down Landmark Decision under False Claims Act," December 8, 2009

Co-author, "Appeals Court Reinforces Importance of Proper 'Upjohn' Warnings," October 2, 2009

Co-author, "Division Chief Announces Changes Aimed at Enhancing SEC Enforcement," August 10, 2009

Co-author, "SEC Halts Sixth Alleged Ponzi Scheme Since Madoff," April 2, 2009

Co-author, "Selective Waiver Doctrine Rejected," March 4, 2008

Co-author, "SEC Notifies at Least Three Firms That it May Bring Fraud Charges Related to the Municipal Market," February 13, 2008

Co-author, "Ex-Brocade CEO Sentenced to 21 Months in Stock Options Backdating Investigation," January 17, 2008

"Insider Trading Prosecutions on the Rise," October 2007

"Significant Deficiency Defined," July 2007

"DOJ and SEC Options Backdating Investigations Net First Indictments," July 2006

Speaking Engagements

In April 2009, Mr. Grugan was featured in an interview, Compliance Week podcast, discussing delivering proper Upjohn warnings when conducting interviews in internal investigations, and a recent decision highlighting the consequences of failing to deliver those warnings.

Mr. Grugan has spoken at a number of continuing legal education seminars, including: 

"The SEC is Watching: Avoiding Municipal Financing Landmines in a Tight Financial Market," Pennsylvania League of Cities and Municipalities Annual Convention, June 2010

"Conducting Effective Internal Investigations: The Use of Ethical Strategies and the Role of In-House Counsel," Association of Corporate Counsel, May 2010

"Directors & Officers Coverage and Government Enforcement," Pennsylvania Bar Institute, May 2010

"SEC's Focus on Municipal Securities Fraud," Public Employer Labor Relations Advisory Service Annual Conference, March 2010

"Discovery – Where Most Cases are Won or Lost," November 2009 

"Recent Developments under Pennsylvania’s Insurance Bad Faith Statute," PBI's Auto Law Update, October 2009 

"Directors and Officers Insurance Coverage in Internal Investigations," D&O Insurance Update: Emerging Issues and Strategies, July 2009 

"Protecting Privilege, Potential Witness Liability, and Tone at the Top," Conducting Effective Internal Investigations, May 2009

"Civil Practice and Procedure in the Philadelphia Court of Common Pleas," June 2009

"Recent Examples of Poor Tone at the Top," Tone at the Top: The Ethical Standards Set by Senior Management and How Those Standards, or Lack Thereof, Contribute to Corporate Fraud (CLE), January 2008

"What Happens in an Internal Investigation?," Navigating Attorney-Client Privilege and Work Product in Corporate Litigation, Transactions, and Investigations (CLE), December 2007

"Current Practice Developments Regarding Internal Investigations and Responding to Governmental Enforcement," Philadelphia Bar Association Business Law Section Meeting, October 2007

"Discovery – Where Most Cases are Won or Lost," Philadelphia; Pittsburgh; Mechanicsburg, Pennsylvania; August 2007

"Conducting Internal Investigations," FERC Compliance Webinar, June 2007

"Corporate Responses to Employee Misconduct," Tri-State Human Resource Management Association Annual Conference, May 2007

In addition, Mr. Grugan has spoken at clients' in-house extra-contractual insurance litigation seminars.

Community Activities

Neighborhood Club (civic association) of Bala Cynwyd (Pennsylvania), Vice President

FBI's 2010 Citizens' Academy/ Community Partnership Program, member

Board Memberships

Temple Law Alumni Association

St. Joseph's Preparatory School, Board of Governors

Temple University James E. Beasley School of Law (J.D.1998, cum laude)
Editor-in-chief, Temple Law Review; Member, Moot Court Honor Board

University of Pennsylvania (B.A. 1992)

New Jersey 1999

Pennsylvania 1999

U.S. District Court for the District of New Jersey

U.S. District Court for the Eastern District of Pennsylvania

U.S. Court of Appeals for the Third Circuit

U.S. Court of Appeals for the Tenth Circuit