Global law firm DLA Piper announced the launch of its newly created International Securities Group in recent days. Along with that launch, George Barboutis will act as a London-based US securities partner within the group; he joined the firm on November 16^th.

The International Securities Group will bring together lawyers advising on equity and debt offerings in the UK and the EMEA region. With Barboutis’s appointment, DLA Piper moves to establish a London-based US capital markets team providing it with U.S. securities law capability to handle equity and debt offerings of issuers in the EMEA region targeted at US investors. As well, he will concentrate on strengthening the firm’s presence in international/cross-border capital markets transactions. At the same time, he will work to leverage the potential of the firm’s strong office network in EMEA and helping further its integration.

Barboutis specializes in U.S. securities. He is US-qualified (State of New York), as well as qualified as a solicitor in England & Wales. Before joining DLA Piper, Barboutis was a partner with Dewey & Leboeuf based in London. He was promoted to this position in 2007. H joined Dewey Ballantine in 2004 from Shearman & Sterling where he worked with its London US securities group.

Barboutis’s practice covers a wide range of equity, equity-linked and debt securities offerings, including Rule 144A/Regulation S and SEC-registered offerings, US and London listings, as well as M&A and structured finance transactions. On a regular basis, he advises on transactions in the CIS (with a focus on Russia, Ukraine and Kazakhstan), Poland, Greece, Turkey and the Middle East. George acts for issuers and underwriters with a focus on emerging markets and has worked with major investment banking clients.

Alex Tamlyn, Head of the International Securities Group was quoted as saying in a press release at the firm’s website: “The establishment of the International Securities Group brings together the firm’s expertise across the capital markets space into a single team. This aligns us consistently with the banks and other financial institutions which drive significant securities transactions globally. In an economic environment where access to capital is extremely challenging this allows us to deliver the best possible service to our clients to raise finance across geographies and industries.”

Charles Severs, DLA Piper’s UK Head of Corporate was quoted as saying: “I am delighted that George is joining us. The firm’s international platform and George’s emerging markets focus go hand in hand with one another to strengthen further our corporate offering to both issuers and underwriters globally. We expect to continue to strengthen our US securities capability in London.”

Chris Paci, chair of DLA Piper’s Capital Markets practice in the United States was quoted as saying: “George’s appointment, together with the launch of the International Securities Group, are key milestones in advancing our strategy for delivering global capital markets capability across the major financial centers in the United States, Europe and Asia.” 

Global law firm DLA Piper has 76 offices in 30 countries and over 4,200 lawyers.

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David Tamman, who was formerly employed with Nixon Peabody as a partner, sued the firm in recent days.

In 2009, the Securities and Exchange Commission cited Tamman for his part in the alleged investment scam involving former client Beverly Hills–based NewPoint Securities. The SEC claims the attorney modified and falsified documents the client used to conceal the fact that, according to the October 28th amlawdaily.com article, “Former Nixon Partner Sues Firm, Says He Was Made Scapegoat in SEC Probe”, “investments billed to investors as “low risk” were actually being used to construct a mansion for the company’s co-owner.”

Tamman is suing Nixon Peabody on the grounds that the firm blamed him for the entire matter, and took away the majority of his $1.5 million practice away from him.

Tamman’s complaint was filed last week in California Superior Court in Los Angeles. It identifies what the attorney alleges are numerous actions the firm took to blame Tamman for everything related to the NewPoint scandal on him, as well as to put distance between the firm and the SEC investigation to protect its reputation its self-insured malpractice policy.

The SEC sued NewPoint and several of its top executives in 2010 accusing the financial services firm of both securities fraud and the unregistered sale of securities. In addition, the SEC also froze NewPoint’s assets, and placed the company into receivership, after obtaining and injunction from a federal court.

Tamman was employed with the firm for approximately two years. In the complaint, he states he brought NewPoint with him as a client from Liner Grode Stein Yankelevitz Sunshine Regenstreif & Taylor, where he served as senior counsel before joining Nixon. He also states in the in the complaint that he was not the only Nixon attorney who represented the company. Per the complaint, Nixon partners Edward O’Callaghan, William Kelly, and Robert Bernius and associate Matthew Grazier are listed as also providing counsel in the NewPoint representation.

According to the article, the complaint states: “Far from supporting him, his partners, with whom he had consulted and whose advice he had followed upon every step … had abandoned him, as has Nixon.”

Per the article, Nixon Peabody spokesman Brian Moynihan was quoted as having said in a statement that the firm fired Tamman “as soon as we learned that he was under SEC investigation and he failed to explain his actions to us.” As well, the firm said it “has acted completely appropriately in cooperating with the SEC on this issue.”

Stanton Phillips and James Wohl are representing Tamman. Phillips and Wohl each have their own law offices in Los Angeles.

Nixon Peabody LLP has over 800 attorneys in 25 major practice areas. It is one of the largest multipractice law firms in the United States, with offices in seventeen cities in the United States, as well as in London, Paris, and Shanghai.

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The law firm of Sidley Austin announced recently that Securities and Exchange Commission veteran James A. Brigagliano will join the firm as a partner in the securities and futures regulatory practice.

Prior to joining Sidley Austin, Brigagliano served as the Deputy Director of the Division of Trading and Markets at the SEC. There, he served in a variety of senior policymaking and management roles. His work included driving a variety of major SEC rulemaking initiatives, most notably the Dodd-Frank Act.

He was also instrumental in the development of the SEC’s response to the 2008 financial crisis, and worked in tandem with the Treasury Department, the Federal Reserve and the Commodity Futures Trading Commission to minimize damage to U.S. markets. In addition, Brigagliano has worked hand in hand with the Financial Industry Regulatory Authority (FINRA), the largest independent regulator for securities firms conducting business in the U.S., and provided information on a regular basis to Congressional staffs regarding regulatory developments.

Thomas A. Cole, Chair of the firm’s Executive Committee was quoted as saying in a press release at the firm’s website: “Jamie Brigagliano is one of the country’s most respected securities lawyers. Jamie understands the complex structure of global markets and the exchanges and he will add tremendous value to representing our clients in securities regulatory and enforcement matters, be they broker-dealers, hedge funds, mutual funds, investment banks or public companies.”

Brigagliano has over twenty years’ experience at the SEC. He first joined the SEC’s Office of the General Counsel in 1986; in this role he briefed and argued cases in federal district and appellate courts, as well, he supervised a team of litigators from 1991 to 1998. Subsequently, he joined what is now known as the Division of Trading and Markets. In 2006, he was promoted to Associate Director in 2006. In this role, he oversaw a variety of regulatory programs and enforcement liaison functions. In 2009, he was named Deputy Director. As Director, he oversaw the regulation of broker-dealers, securities markets and trading practices; as well, he advised on enforcement matters and testified before Congress. Also in 2009, he served as Co-Acting Director of the Division.

Dennis C. Hensley, global coordinator of Sidley’s securities and futures regulatory practice was quoted as saying in the press release: “Jamie has demonstrated sound judgment, a strategic perspective and exceptional analytical skills throughout his notable career. His insight and experience in a wide range of regulatory areas will enable him to provide clients with valuable strategic advice as they adjust their businesses and control systems to meet the changing regulatory environment. Jamie will bring even greater value to the deep and broad securities regulatory experience that already exists at Sidley.”

Brigagliano was quoted as saying: “It is an honor to be joining a global law firm known for the integrity and excellence of its lawyers. I look forward to assisting clients in navigating the ever-changing regulatory landscape and joining former colleagues from the SEC.”

Mr. Brigagliano was the recipient of numerous awards while at the SEC. among those he earned were the Chairman’s Award for Excellence and the Law and Policy Award in 2011, which was given to the Dodd-Frank Implementation Team. In 2004, he received the Jay Manning Award, and in both 2001 and 2005 he received the Capital Markets Award. Brigagliano has spoken frequently at conferences attended by thousands of both attorneys and business professionals.

A full service law firm, Sidley Austin has over 1,600 lawyers practicing in 17 U.S. and international cities.

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Banks earned billions by creating and selling financial products that essentially backfired in tandem with the housing market, which caused the worst economic crisis in the U.S. since the Great Depression. The recent passage of the Dodd-Frank law is in direct response to this crisis.

Yesterday, Senator Carl Levin (D-MI) released the findings of a two-year probe, and was quoted as saying he wants “the Justice Department and the Securities and Exchange Commission to examine whether Goldman Sachs violated the law by misleading clients who bought the complex securities known as collateralized debt obligations without knowing the firm would benefit if they fell in value,” according to the April 13^th washingtonpost.com article, “Goldman Sachs misled Congress after duping clients, Senate panel chairman says”.

Levin also said he wants federal prosecutors to determine whether perjury charges should be brought against Goldman Sachs Chief Executive Officer Lloyd Blankfein and other employees who testified in Congress last year.

Levin was also quoted as saying that Goldman Sachs is “a financial snake pit rife with greed, conflicts of interest, and wrongdoing,” according to an April 14^th article at vanityfair.com.

Goldman Sachs spokesman Lucas van Praag was quoted as saying: “The testimony we gave was truthful and accurate and this is confirmed by the subcommittee’s own report.”

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Greenberg Traurig confirmed to The AM Law Daily that Tamman is no longer connected with the firm.  In a statement made to ALM the firm said ”David Tamman was terminated by the firm. The allegations in the SEC complaint, which he failed to disclose to us, allege conduct and actions which took place at a former firm and of which we were not aware.”

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Baker Botts partner J. Bradley Bennett was named the new head of enforcement for the Financial Industry Regulatory Authority…

Goodwin Procter was named the winner of the 2010 Beacon of Justice Award by the National Legal Aid & Defender Association…

Luce, Forward, Hamilton & Scripps LLP formed a national foreclosure litigation and investigation practice to deal with the emerging national foreclosure crisis…

Loeb & Loeb attorneys were named as 2011 Lawyers of the Year by Best Lawyers…

Wilson Sonsini Goodrich & Rosati opened an office in Hong Kong…

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Bennett, a partner at Baker Botts since 2001, replaces James Shorris, who served as acting chief of enforcement for FINRA following Susan Merrill’s departure in March. In the role, Bennett will be responsible for the management of approximately 300 enforcement staff in 17 offices across the United States and report to FINRA Vice Chairman Stephen Luparello.

“Brad will be a forceful advocate for investors, especially in dealing with those who would seek to violate the rules,” Luparello said. “I have known Brad for many years and he stands out for his understanding of securities laws.”

Bennett’s practice at Baker Botts specializes in financial and securities law violations. Prior to entering private practice he was a senior attorney in the division of enforcement for the Securities and Exchange Commission.

FINRA is the largest non-governmental regulator for all securities firms doing business in the United States and is dedicated to investor protection and market integrity.

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Murphy represents a trend in recent legal practice start ups, in which firms are tailored to serve specific current economic and regulatory issues.

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On February 19, 2010, EGCI announced that its independent auditors withdrew its audit opinions for EGC’s financial statements for the years ended December 31, 2006, 2007, and 2008. In addition ECGI announced its financial reporting for the years ended December 31, 2006, 2007, and 2008 as well as its quarterly reports for its first three quarters of 2009 needed to be adjusted and reissued.

On the same day, the Securities and Exchange Commission (SEC) halted trading of EGC securities. As a result, class members shares are illiquid, and have suffered substantial damages.

Electronic Game Card, Inc., located in New York, is the creator of patented and proprietary interactive technology platforms the size of a credit card. EGC Game cards are mini terminals that function as prize machines for the gaming, lottery, promotions, entertainment and sports industries.

The Rosen Law Firm represents investors that fall victim to securities fraud and corporate misconduct throughout the United States.

If you want to join the litigation or discuss your rights or interests regarding this class action, please contact plaintiff’s counsel, Laurence Rosen, Esq. or Phillip Kim, Esq. of The Rosen Law Firm toll free at 866-767-3653 or via e-mail at lrosen@rosenlegal.com or pkim@rosenlegal.com.

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A former Securities and Exchange Commission (SEC) enforcement officer, Lynch joined Morgan Stanley in 2005, performing his job based out of London since May.

According to a memo reviewed by Dow Jones Newswires, he will retain the position of vice chairman and focus on relations with European regulators.

The largest banks on Wall Street continue to face anger over the country’s financial crisis and government bailouts. That anger has fueled efforts on Capital Hill to overhaul the banking system. Legislators have proposed various financial industry options, including a tax on large banks, limits to how large they can grow, and a push to excise proprietary trading and private equity from banks.

The financial industry is facing the same type of scrutiny in Europe, as well as an investigation in Washington by the Financial Crisis Inquiry Commission over what led to the industry’s meltdown in 2008. During the financial crisis, Morgan Stanley converted into a bank holding company, and attempted to broaden its revenue stream via a joint venture with Citigroup Inc’s Smith Barney brokerage unit.

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Phillip Windom Offill, a former Securities and Exchange Commission enforcement lawyer in the agency’s Fort Worth, Texas, office was convicted on one count of conspiracy and nine counts of wire fraud for his part in a ‘pump and dump’ scheme selling unregistered securities of nine companies to investors.

“It is a sad day when a former U.S. Securities and Exchange Commission attorney uses what he learned in the government to later defraud the investing public,” said Lanny A. Breuer, an assistant attorney general at the Justice Department.

Per court documents, Offill, along with co-conspirators, would encourage investors to buy shares in various companies via “blast” emails and phony press releases. When stock prices increased, the co-conspirators, including some chief executives of the companies, sold their stock for profit.

Federal prosecutors in Virginia said they are seeking $15 million in forfeiture. Offill, 51, is scheduled to be sentenced on April 16.

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Gallagher joined the Division of Trading and Markets in 2008. Gallagher played a key role in the SEC’s response to the financial crisis. He oversaw the issues arising from the bankruptcy of Lehman brothers, rulemaking to address issues regarding credit rating agencies, and efforts to facilitate the central clearing of credit default swaps. He earned his law degree, magna cum laude, from Catholic University of America and graduated from Georgetown with a BA in English.

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Yesterday the court rejected the SEC’s request to amend the complaint to add an additional count but left open the option to file it separately, and today the SEC did just that. The SEC is alleging that Bank of America should have disclosed Merril’s $4.5 billion loss in October, 2008, and additional losses in November to its shareholders prior to voting on the merger.

The trial for the original complaint is set to begin in March, and the second trial may start as soon as this summer.

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The trial, which focuses on the $3.6 billion paid out to Merril executives in bonuses prior to the merger will go ahead as scheduled on March 1.

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Salem Katsh joins Schnader Harrison from private practice as as a partner in its New York intellectual property group. Katsh previously chaired the IP groups at Weil Gotshal & Manges and Shearman & Sterling. More recently, he was the chair of the IP group at Kasowitz Benson Torres & Friedman.

Michael Piazza joins Greenberg Traurig from Dorsey & Whitney. He is a former Regional Trial Counsel for the Los Angeles office of the SEC. Piazza joins Greenberg Traurig’s securities litigation practice group as head of the Irvine, California office’s practice. His JD is from the University of Minnesota Law School.

Thomas J. Durling joins Flaster Greenberg’s Philadelphia from DLA Piper, as a shareholder in the IP practice. Durling’s practice focuses on patent procurement, due diligence, intellectual property litigation and client counseling within the mechanical engineering field. His JD is from the Widener University School of Law.

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Christopher Cox, the former Bush administration SEC head, joins Bingham McCutchen as a partner in Orange County, California. He will handle corporate law, mergers & acquisitions and securities, and will be a principal at the Bingham Consulting Group. His JD is from Harvard Law School.

Lisa Laukitis joins Jones Day from Kirkland & Ellis as a partner in the firm’s business restructuring and reorganization practice in New York. At Kirkland, she was a partner in the firm’s restructuring group. Her JD is from the University of Dayton School of Law.

Steven Mones joins Wilmington, Delaware-based personal injury firm Freibott Law. With 22 years experience, Mones has tried cases in virtually every Delaware court, and is admitted to the bar in both Delaware and Virginia. His JD is from Widener University School of Law (formerly Delaware Law School).

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Cliff Stricklin joins in Denver as practice chair from Holland & Hart. Previously, he was a Special Assistant US Attorney with the Enron Task Force, where he was a key member of the prosecution team that tried and convicted Jeff Skilling and Ken Lay on conspiracy, securities fraud, and insider trading charges.

Stricklin brings along Michael MacPhail, also from Holland & Hart. He is a former Deputy Assistant Director of the Securities and Exchange Commission’s Denver Regional Office.

Holme Roberts & Owen LLP is an international law firm established in 1898. It has 250 lawyers practicing in nine offices, including Denver, Boulder, Colorado Springs, London, Los Angeles, Munich, Phoenix, Salt Lake City, and San Francisco.

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Porritt comes to Akin Gump from Wilson Sonsini Goodrich & Rosati. He handles SEC and commercial litigation matters.

White spent the last 10 years at WilmerHale. Before that, he was with the Enforcement Division of the SEC.

In March, Akin Gump laid off 47 associates and 57 paralegals & staff.

Akin Gump Strauss Hauer & Feld LLP was founded in Dallas in 1945 by Robert Strauss and Richard Gump. The firm now numbers more than 900 attorneys and advisors in the United States, Europe, Asia and the Middle East.

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Kouzoukas was principal associate deputy secretary of the Department of Health and Human Services. He is joining Covington’s health care and food & drug practice groups in Washington DC.

Kornblau was SEC chief litigation counsel. He joins Covington as a partner in the white collar & securities enforcement and litigation practices in New York.

Covington & Burling LLP is an international law firm with offices in Beijing, Brussels, London, New York, San Francisco, Silicon Valley, San Diego, and Washington, DC. It consistently ranks among the top 20 on The American Lawyer’s prestigious “A-List.”

CORRECTION: This story originally characterized David Kornblau as a “Bush administration refugee.” In fact, Kornblau joined the SEC in 1995, during the Clinton years, and was never a political appointee. From 2005-2009, he was with Merrill Lynch, so his move to Covington has nothing to do with the change in administrations.

JDJournal regrets the error.

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Becker, 61, as general counsel will coordinate legal cases and advise on enforcement actions, and will have an additional role in developing and implementing SEC policies. He was SEC general counsel from 2000 to 2002.

Becker served as SEC Chairman Arthur Levitt’s chief lawyer and participated in policy and regulatory initiatives

Schapiro has asked Commissioner Elisse Walter, a Democrat, to seek candidates who may replace other senior managers at the agency, including Enforcement Director Linda Thomsen.

Schapiro earned a JD degree from George Washington University in 1980.

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Colby is credited by the SEC with having led “the development and implementation of investor protection policies, rules and interpretations governing broker-dealers, securities markets, clearance and settlement systems and transfer agents.”

Colby joined the SEC staff in 1981 as a staff attorney in the division, where he was promoted to chief counsel in 1986 and deputy director in 1993.

He graduated with a BA from Bowdoin College, and a JD from Harvard Law School.

Davis Polk & Wardwell is an international law firm that employs more than 740 attorneys, and is primarily known for its corporate, litigation and tax practices.

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Robert M. Kurucza joins as co-chair, bringing along Marco E. Adelfio. Both are residents of Washington, DC.

The addition of Kurucza and Adelfio will enable Goodwin Procter to provide a more fully integrated suite of services to prominent common clients, and to offer even greater cross-disciplinary expertise to a broad range of financial institutions.

Formerly of Morrison Foerster…

Mr. Kurucza was formerly the Director of the Securities & Corporate Practices Division of the Office of the Comptroller of the Currency, Assistant Director of the Division of Investment Management for the SEC and Chief Counsel to the Pennsylvania Securities Commission. … He is listed in The Best Lawyers in America (2007 – 2009) as a leader in the fields of banking and mutual funds law….

For the last three years, Mr. Adelfio has been named a Leading Lawyer in Investment Management in the Chambers USA Guide to America’s Leading Business Lawyers put out by Chamber & Partners Publishing. He is also listed in The Best Lawyers in America (2007 – 2009) as a leader in the fields of mutual funds law and private funds law.

Via ATL.

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Gross revenue reached $692 million, up 6.3% from 2007; and profits per equity partner climbed to $2.65 million, up 2.3%. At $1.07 million, revenue per lawyer was flat. Head count at the firm, a traditional one-tier partnership, grew by 6% to almost 650 lawyers.

In 2008, the firm handled several high-profile matters, most notably its successful defense of Citigroup in a $2 billion lawsuit in which Italian dairy giant Parmalat charged that the bank contributed to the fraud that led to its bankruptcy. Jurors awarded Citigroup $364.2 million; Parmalat got nothing.

Paul Weiss is representing Bear Stearns in securities suits arising from the investment bank’s failure, and also counts two of Bernard Madoff’s sons as clients.

Recent lateral hires, including Beth Wilkinson, the former general counsel of Fannie Mae, and Walter Ricciardi, a deputy director of the SEC, should prove to be client magnets.

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Gross revenue rose 8% to $965 million, and profits per partner increased about 12% to $2.4 million.

But revenue per lawyer was basically flat, down less than 1%.

Nearly half the firm’s lawyers are overseas, helping to cushion the blow from the dramatic slowdown in the United States

Cleary advised the SEC and Federal Reserve Bank of New York during the collapse of Lehman Brothers. It then advised Barclays in its acquisition of Lehman Brothers’ North American investment banking and capital markets businesses.

The firm employs over 900 lawyers globally.

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Ford represents financial institutions and borrowers in structuring, negotiating and closing a wide variety of domestic and cross-border financing transactions. He came to the firm from White & Case in 2004. A magna cum laude graduate of Case Western Reserve University School of Law, Dan was a member of the Law Review and was elected to the Order of the Coif.

Schnitzer represents creditors, unsecured creditor committees, debtors and trustees, with a concentrated expertise in all levels of bankruptcy-related litigation. He was an Assistant District Attorney in Bronx County, and served as a Staff Attorney with the Division of Enforcement of the Securities and Exchange Commission. A 1997 graduate of Columbia University School of Law, and a Harlan Fiske Stone Scholar, he has been with the Firm since 2001.

Founded in 1931, Hahn & Hessen LLP is a full service commercial firm serving primarily financial institutions and creditors holding distressed debt.

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Given a long-established principle that lawyers working in receivership situations should be awarded moderate fees, “the request for fees of $2,147,666 for 20 days of work is excessive,” said US District Judge Denny Chin in Manhattan.

Lawyers, paralegals and staff at New York’s Dewey & LeBoeuf logged over 5,500 hours on the WexTrust case, or more than 275 hours a day.

Chin determined that the law firm should receive $1.7 million for the work performed between August 11th and 31st. Dewey & LeBoeuf may apply for the difference between what it sought and what he awarded when the final distribution of WexTrust assets is made.

The law firm’s request was part of a joint application for compensation by Timothy Coleman, the court-appointed receiver for WexTrust and a partner at Dewey & LeBoeuf.

Chin approved the full amount of Coleman’s request for $57,300 in receiver’s fees. Coleman’s hourly rate had been cut to $250 specifically for the WexTrust case, from his standard rate of $850 to $950. The judge also approved a request of $66,640 in fees for the accounting and advisory firm Deloitte Financial Advisory Services.

Chicago-based WexTrust and two of its owners, Joseph Shereshevsky and Steven Byers, were charged by the SEC with defrauding investors by diverting $100 million of funds to unauthorized uses. Afterward, the court froze the defendants’ assets and appointed Coleman as WexTrust’s receiver.

Via PilotOnline.

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Eric A. Holzer, 34, a Paul Hastings tax associate, was allegedly recorded discussing the scheme with Matthew C. Devlin, 35, of Lehman Brothers, whose wife, Nina Devlin, is a partner at the public relations firm Brunswick Group.

Matthew Devlin has already pleaded guilty in the case and is cooperating with prosecutors.

The criminal complaint against Holzer was one of three unsealed in the Southern District of New York, charging conspiracy and securities fraud.

An additional civil suit filed by the Securities and Exchange Commission details illegal trading on 13 impending transactions that Mr. Devlin learned about from his wife.

Devlin allegedly referred to his wife as the “golden goose” for the information she provided, information the SEC said he used to curry “favor with his friends and business associates and received in return cash, luxury items and other benefits.”

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Congress will also investigate the alleged $50 billion pyramid scheme run by Wall Street money manager Bernard Madoff.

Democratic Representative Paul Kanjorski (D-PA), chairman of the House Financial Services subcommittee on capital markets, will convene a congressional inquiry early next month to examine the alleged fraud and to determine why the Securities and Exchange Commission and other regulators “failed to detect these substantial evasions.”

The planned congressional inquiry follows a stunning rebuke that SEC Chairman Christopher Cox leveled against his agency’s career regulators, blaming them for a decade-long failure to investigate Madoff and for failing to detect one of the largest pyramid scams ever.

In other news, New York Southern District Magistrate Judge Gabriel Gorenstein has set new conditions for Madoff’s bail, including an ankle-monitoring bracelet and a curfew that will require him to be in his Park Avenue apartment from 7 pm to 9 am. The magistrate judge also ordered Madoff and his wife, Ruth, to surrender their passports.

• Madoff Charged in $50 Billion-with-a-”B” Fraud, Sued by SEC [UPDATE]
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• Paul Weiss Enjoys Solid 2008
• 8,000 Claims in Madoff Fiasco?

Dewey & LeBoeuf served as reciever for WexTrust Capital in an SEC lawsuit. WexTrust ran a Ponzi scheme that raised $225 million by targeting the Orthodox Jewish community (a popular tactic these days).

Judge Chin froze WexTrust’s assets, and appointed Dewey to serve as receiver. Last month, Dewey submitted an application to collect compensation and expenses for the first twenty or so days it served as receiver. The firm asked for $2.2 million.

G&H Partners, one of the larger creditors in the receivership, objected to the request. Now Chin has asked Dewey & LeBoeuf to justify the amount:

It is difficult to evaluate the reasonableness of the hourly rates for most of the lawyers listed. For example, [five attorneys] — all simply described as “Associate” — have substantial hours billed at hourly rates of, respectively, $605, $605, $550, $605, and $605. Without knowing anything about their backgrounds, it is difficult for the Court to determine whether the requested hourly rates are reasonable. …

While I accept the representations that the requested hourly rates are D&L’s standard hourly rates for the individuals involved, I wonder whether the rates are high for legal services rendered in connection with a securities receivership proceeding. Is it reasonable to bill at hourly rates of $700 to $950 for partners and $425 to $550 to $605 for associates in the context of a securities receivership? Is it reasonable to bill at hourly rates of $285 for summer associates & $175 to $275 for paralegals? Have courts in other receivership cases awarded fees applying such rates?

Dewey & LeBoeuf declined to comment — their mouths were full of Almas caviar while they cavorted on a solid gold yacht.

Via WSJ Law Blog via Patrick Lamb.

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The Securities and Exchange Commission’s insider trading lawsuit, filed yesterday in federal court in Dallas, said Cuban broke the vow after speaking by phone with Mamma.com’s CEO in 2004. Cuban became angry after learning in the call that the company planned to sell shares below the trading price, the SEC said. That same day, he arranged the sale of his 6.3 percent stake.

“There was no agreement to keep information confidential,” Cuban said today on his blog. Mamma.com’s former CEO Guy Faure has said he had no recollection of the comments, according to Cuban. “The SEC knows this — they have the transcript, yet they brought the case anyway. Why?” Cuban asked.

Cuban is the most prominent US individual targeted for alleged insider trading since the SEC sued Martha Stewart in 2003. Cuban has accused the agency of a “gross abuse of prosecutorial discretion,” and vows to fight the charges.

The FEC lawsuit says that in late June 2004, Cuban spoke by telephone to Mamma.com’s chief executive officer and promised to keep the content of the conversation secret. During the almost nine minute call, Cuban learned the company planned a private investment in public equity offering, known as a PIPE.

According to the SEC complaint, Cuban became very upset and angry during the conversation, and said, among other things, that he did not like PIPEs because they dilute the existing shareholders,” driving down the value of their stock. At the end of the call, Cuban told the CEO, “Well, now I’m screwed. I can’t sell,” the SEC reported.

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Madoff, 70, head of Bernard L. Madoff Investment Securities LLC, was arrested this morning by the FBI.

US Magistrate Judge Douglas Eaton released Madoff on $10 million bond. Madoff faces as much as 20 years in prison and a $5 million fine if convicted.

The New York-based firm was the 23rd largest market maker on Nasdaq in October, handling a daily average of about 50 million shares a day. It specialized in handling orders from online brokers in some of the largest US companies, including General Electric and Citigroup.

Madoff was also sued today by the Securities and Exchange Commission. The complaint, also filed in Manhattan federal court, accused Madoff of a “multi-billion dollar Ponzi scheme that he perpetrated on advisory clients of his firm.”

The agency said it’s seeking emergency relief for investors, including an asset freeze and the appointment of a receiver for the firm.

Madoff ran his investment advisory business from a separate floor of his firm’s office, keeping financial statements “under lock and key,” prosecutors said.

While meeting with co-workers at his home yesterday, Madoff conceded that he was “finished,” that his advisory business is “all just one big lie” and “basically, a giant Ponzi scheme,” the government said. The business had been insolvent for years with losses of about $50 billion, he told the employees, according to the criminal and SEC complaints.

Madoff said he had about $200 million to $300 million left and planned to distribute money to select employees, family and friends before surrendering to authorities in about a week, the government said.

UPDATE

Milberg LLP and Seeger Weiss LLP announced today that the two firms have been retained by dozens of individual investors in Madoff Investment Securities. Collectively, these investors have lost hundreds of millions of dollars–and possibly more than a billion–due to the stunning fraud allegedly perpetrated by Bernard Madoff.

“We are moving quickly and decisively to represent the interests of outraged investors–both individual and institutional–who were persuaded to entrust their money with Madoff Investment Securities and its founder, Bernard Madoff,” said Brad Friedman, a partner at Milberg LLP.

“Those taken in by this Ponzi scheme who have turned to us for help include a senior citizens center, corporate executives, banks, hedge funds and a wide variety of others,” according to Stephen Weiss, a partner at Seeger Weiss LLP.

• Attorney General Recuses Self from Madoff Probe
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