WilmerHale and Dentons US LLP are pleased to announce that they received a total defense verdict in favor of their client Stephen M. Kovzan, the Chief Financial Officer of NIC Inc., from a jury sitting in the US District Court for the District of Kansas. This civil enforcement action was brought in January 2011 by the US Securities and Exchange Commission (SEC), alleging securities fraud, violations of the Securities Exchange Act's books and records and internal controls provisions, and aiding and abetting NIC's alleged securities law violations.
The jury rejected all 12 of the SEC's claims, completely exonerating Kovzan.
WilmerHale and Dentons built a strong trial team of seasoned lawyers led by Dentons Partner Stephen L. Hill, Jr. and WilmerHale Partner Andrew B. Weissman. The team also included Dentons Partners Maxwell Carr-Howard and Angela Harse as well as Associate Sara Holzschuh and WilmerHale Partners John A. Valentine and Nicole Rabner and Counsel Kelly Shoop and David Zetlin-Jones.
The SEC alleged that NIC filed false and misleading proxy statements, annual reports and registration statements that failed to disclose perquisites received by NIC's founder and CEO and falsely represented that he worked for nominal compensation from 2002 until 2005, and that continued to understate perquisites supposedly received by Jeffrey Fraser in 2006 and 2007. The SEC pursued these claims for more than six years since first initiating its investigation of NIC in June 2007.
After a nearly three-week trial, the jury rejected the SEC's claims in their entirety. The jury answered each and every question posed in a 15-page verdict form in favor of Kovzan.