John Grugan
John Grugan

John C. Grugan

Partner

gruganj@ballardspahr.com
Tel 215.864.8226
Fax 215.864.8999
Philadelphia

John C. Grugan concentrates his practice on government enforcement defense, regularly defending clients during investigations conducted by, and in litigations brought by, the U.S. Securities and Exchange Commission, the U.S. Department of Justice, the Consumer Financial Protection Bureau, self-regulatory organizations, and state securities regulators. Mr. Grugan has substantial experience directing internal investigations on behalf of companies, their boards of directors, or committees of those boards on matters ranging from highly publicized claims of misconduct to sensitive, confidential cases that never become public. Mr. Grugan also regularly represents clients in False Claims Act litigation.

Mr. Grugan is the co-leader of Ballard Spahr’s Municipal Securities Regulation and Enforcement Group, and routinely advises clients on municipal securities compliance and enforcement and regulatory challenges. His experience includes representing clients in responding to initiatives, investigations, and enforcement actions by market regulators, as well as defending against litigation stemming from the issuance of municipal securities, including alleged securities law violations. 

Mr. Grugan also maintains an active complex litigation practice, focusing on securities and business litigation. He has represented numerous public companies and their officers and directors in the defense of securities class actions and derivative actions, in disputes arising out of asset purchases, and in litigation relating to government procurement. In addition, he maintains an active insurance practice and regularly advises clients concerning D&O insurance coverage. He has litigated dozens of insurance bad faith claims, both on behalf of insurers and insureds.

Mr. Grugan has spoken extensively at and participates in numerous continuing legal education programs relating to SEC enforcement generally, the SEC’s enforcement efforts in the area of municipal securities, conducting effective internal investigations, and directors’ and officers’ insurance in the context of government investigations.

Mr. Grugan is listed in Benchmark Litigation as a "future star" in litigation and since 2010 has been named a "Pennsylvania Super Lawyer" by Law & Politics and Philadelphia magazines. In 2007, The Legal Intelligencer named Mr. Grugan a "Lawyer on the Fast Track." He is a member of the University of Pennsylvania Inn of Court and is active with several Philadelphia-area civic and charitable organizations.

Before joining Ballard Spahr, Mr. Grugan was a law clerk to the Honorable James McGirr Kelly of the U.S. District Court for the Eastern District of Pennsylvania. He also served as a trial attorney in the U.S. Department of Justice Honor Program, Civil Division. 

At Ballard Spahr, Mr. Grugan is Partner-in-charge of the Philadelphia office Hiring Committee and serves on the firm's Diversity Council.

Recent Representative Matters

SEC Enforcement and Corporate Internal Investigations   

  • Regularly represents individuals and companies in SEC investigations and enforcement actions in cases where insider trading or participation in Ponzi schemes is alleged. 
  • Regularly represents companies in SEC investigations relating to inadequate disclosures, alleged accounting fraud, and the Foreign Corrupt Practices Act (FCPA).
  • Regularly advises clients on compliance issues, including under the Foreign Corrupt Practices Act and the EB-5 Visa Program.
  • Represented a health system in an SEC investigation relating to the sufficiency of disclosures to bond holders. After receiving the health system's response to the SEC's Wells Notice, the SEC terminated the investigation.
  • Represented a college board of directors in the internal investigation of alleged sexual misconduct by a professor. The professor voluntarily dismissed the defamation suit.
  • 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 an internal 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 an internal 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 an internal investigation relating to the timing and propriety of a number of stock option grants.

Securities and Complex Civil Litigation

  • Represented a publicly held insurance company in shareholder derivative litigation relating to a merger. The court dismissed the complaint.
  • Represented a publicly traded insurance company and its board of directors in a derivative action arising out of a proposed merger. The shareholder's suit was dismissed. 
  • Represented a gold production and exploration company in a series of shareholder suits arising out of a proposed merger.
  • Represented a publicly traded insurance company and its board of directors in a derivative action arising out of a proposed merger. After discovery, the shareholder voluntarily dismissed the suit.
  • Represented a publicly held insurance company in shareholder derivative litigation that related to a merger. The plaintiffs voluntarily dismissed their claims. 
  • Represented a publicly held company in shareholder derivative litigation that related to a subsidiary’s merger. The plaintiffs voluntarily dismissed their claims.
  • 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. After obtaining partial summary judgment, the relator dismissed his remaining claim. 
  • 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.

Judicial Clerkships

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

Professional Activities

University of Pennsylvania Inn of Court

American Bar Association

Pennsylvania Bar Association

Philadelphia Bar Association

Ballard Spahr's Philadelphia Office Hiring Committee, Partner-in-charge

Ballard Spahr's Diversity and Inclusion Council

Recognition & Accomplishments

Listed in Benchmark Litigation as a "future star" in litigation, 2009-2015

Named a "Pennsylvania Super Lawyer" by Law & Politics and Philadelphia magazines, 2010-2013

National Multiple Sclerosis Society, Leadership Honoree, 2005

LEADERSHIP Philadelphia, member, class of 2009

FBI Citizen's Academy participant, 2010 

Publications

Mr. Grugan is the co-editor of the Philadelphia Court of Common Pleas Civil Practice Manual. Also:

Co-author, "2014 to Date: SEC Enforcement Round-Up," Ballard Spahr publication, September 24, 2014

Co-author, "Commentary: SEC Uses Muscle To Push New Secondary Market Disclosure," The Bond Buyer, January 28, 2014

Co-author, "2013 Review: SEC Municipal Market Enforcement Actions," Ballard Spahr publication, January 27, 2014

"Legal Notes: The SEC's Enforcement Focus on Municipal Securities," Municipal Reporter, January 2014

Co-author, "Lesson of Not Conceding Materiality in Insider Trading Cases," The Legal Intelligencer, December 31, 2013

Co-author, "Commentary: SEC Enforcement Shifts Focus to Muni Issuers in 2013," The Bond Buyer, August 16, 2013

Co-author, "2013 Mid-Year Review: Key SEC Municipal Market Enforcement Actions," Ballard Spahr publication, July 31, 2013

Co-author, "Commentary: SEC Muni Enforcement Shows No Sign of Slowing," The Bond Buyer, March 14, 2013

Co-author, "2012 Year in Review: Key SEC Municipal Market Enforcement Actions," Ballard Spahr publication, February 12, 2013

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

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

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

In addition to his articles for industry and trade publications, Mr. Grugan frequently authors Ballard Spahr Securities alerts and White Collar Defense/Internal Investigations alerts. His most recent alerts follow.

Co-author, "MCDC Issuer Deadline is December 1. Are You Prepared?" October 13, 2014

Co-author, "New York Grand Jury Indicts 12 Online Payday Lenders and 3 Individuals," August 15, 2014

Co-author, "Industry Concerns Prompt SEC To Modify MCDC Initiative," August 1, 2014

Co-author, "SEC Issues First MCDC Cease and Desist Order," July 9, 2014

Co-author, "SEC Announces First Investment Adviser ‘Pay-to-Play’ Enforcement Action," June 24, 2014

Co-author, "SEC Charges Charter School Operator with Disclosure Violations, Suggests It May Charge Individuals," June 4, 2014

Co-author, "SEC Assesses Its First Financial Penalty against a Municipal Securities Issuer," November 6, 2013

Co-author, "The SEC's Renewed Focus on Financial Reporting and Accounting Fraud," October 28, 2013

Co-author, "EB-5 Program Faces Heightened Enforcement Scrutiny," October 11, 2013

Co-author, "SEC Announces Policy Shift on ‘Neither Admit Nor Deny’ Settlements," June 20, 2013

Co-author, "SEC Issues Guidance on Use of Social Media To Disseminate Material Information," April 4, 2013

Co-author, "Underwriters of Municipal Securities Subject to New Fair Dealing Liability under Federal Securities Laws," August 2, 2012

Co-author, "SEC Approves Final Rules for Whistleblower Program," May 25, 2011

Co-author, "U.S. Court: Whistleblower Law May Apply to Private Employers Who Receive PA Funds," December 8, 2010

Co-author, "Dodd-Frank Act Will Likely Increase Whistleblower Payouts," July 15, 2010

"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

Speaking Engagements

"MCDC Self-Reporting: Proving Materiality under Federal Securities Law," Ballard Spahr webinar, August 7, 2014

Panelist, "To Report or Not – The SEC's New MCDC Initiative," Education Finance Council, July 2014

"To Report or Not – The SEC's New MCDC Initiative," Ballard Spahr webinar, May 21, 2014

Panelist, "SEC Enforcement Update," 17th Annual Federal Securities Law Forum, April 2014

"Will the SEC Target You Next? What To Expect in Municipal Enforcement in 2014," Ballard Spahr webinar, February 12, 2014

"Whistleblower Claims and Qui Tam Lawsuits: The Latest Assault on the Consumer Financial Services Industry," Ballard Spahr webinar, May 14, 2012

Mr. Grugan regularly speaks at continuing legal education seminars, including: 

Panelist, "SEC Enforcement: When Corporate Officers Get Caught in the Crosshairs," DELVACCA, Corporate and Securities CLE Institute, King of Prussia, Pa., October 3, 2013

"The SEC's Enforcement Focus on Local Governments and Individuals," The Pennsylvania Municipal League, September 30, 2013

"SEC Enforcement on Local Governments," The Utah League of Cities and Towns, September 13, 2013

"Working with the General Counsel's Office," Practising Law Institute, Pocket MBA Fall 2012, October 12, 2012

"Securities Litigation Today: Navigating the New Enforcement Regime and Plaintiff’s Actions," Ballard Spahr CLE seminar, October 19, 2011

"Whistleblowing in the Workplace," Ballard Spahr CLE briefing, May 4 and 18, 2011

"Civil Practice and Procedure in the Philadelphia Court of Common Pleas," June 2011, June 2009

"Managing Risk and Government Enforcement for Early Stage, Virtual, and Cash-Strapped Companies," Pennsylvania Bio, June 2011

"Detecting, Responding to, and Preventing Fraud," American Bar Association, February 2012, March 2011

"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

Board Memberships

St. Joseph's Preparatory School, Board of Governors

Neighborhood Club of Bala Cynwyd, Board Officer and Past Board President

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

Pennsylvania

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 10th Circuit

U.S. Supreme Court