thursday, 6 november of 2014

Business of Law

Supreme Court Examines Sarbanes-Oxley: Business of Law

The U.S. Supreme Court will decide whether the Sarbanes-Oxley Act of 2002, enacted after the collapse of Enron Corp., can literally be used for a fishing expedition.

The justices yesterday weighed an appeal from a Florida commercial fisherman who tried to avoid a citation for catching undersized red grouper by having the fish tossed back into the ocean. What the fisherman, John Yates, received in addition to the citation, was a conviction for violating Sarbanes-Oxley, which prohibits the destruction of evidence. The law carries a maximum penalty of 20 years.

As Bloomberg’s Greg Stohr reports, several justices were clearly incredulous, questioning how the law -- intended to combat business fraud -- could cover a minor offense.

“What kind of a mad prosecutor would try to send this guy up for 20 years, or risk sending him up for 20 years?” Justice Antonin Scalia asked during the one-hour argument session in Washington.

The 2002 law criminalizes the destruction of “any record, document or tangible object” for the purpose of thwarting a federal investigation or proceeding. The question for the court is whether fish qualify under that definition.

Justice Stephen Breyer said he worried the provision was so broadly worded it would cover trivial matters such as tearing up a census form or kicking an ember from an illegal campfire.

“You could multiply those beyond belief,” he said.

The case is Yates v. U.S., 13-7451.

Court Scolds Lawyer Who Used Judge’s Friendship to Pitch Clients

The top U.S. patent court reprimanded a Silicon Valley lawyer who touted his friendship with the former chief judge to prospective clients.

Edward Reines, who has represented Apple Inc. (AAPL), Microsoft Corp. (MSFT) and other companies in patent disputes, engaged in misconduct when he forwarded a complimentary e-mail in March from Chief Judge Randall Rader, the U.S. Court of Appeals for the Federal Circuit said yesterday.

The order marked a rare public chastising of a lawyer who practices before the court.

Rader said in the private e-mail to Reines -- a partner in the Redwood City, California office of Weil, Gotshal & Manges LLP -- that another judge had complimented his appellate work and encouraged Reines to let others see the message, which he signed “Your friend for life, rrr.”

Reines forwarded the e-mail to “no fewer than 35 existing and prospective clients, with accompanying comments soliciting their business based on the e-mail,” according to the order.

The attorney agreed that he shouldn’t have forwarded the e-mail but denied he used it to imply he could wield improper influence.

Reines didn’t reply to messages seeking comment on the reprimand. The firm in an e-mail said it was reviewing the court’s order and had no further comment.

Rader, 65, stepped down as chief judge in May and announced his immediate retirement a month later. In a May 23 letter to the court’s other judges, Rader said he had “engaged in conduct that crossed lines established for the purpose of maintaining a judicial process whose integrity must remain beyond question.”

The case is In Re Edward R. Reines, 14-MA004, U.S. Court of Appeals for the Federal Circuit (Washington).

Singer’s Hedge Fund Seeks to Keep Argentine Lawyer in U.S.

Billionaire hedge fund manager Paul Singer’s NML Capital Ltd. filed an emergency request in Washington federal court to keep Argentine lawyer Cesar Guido Forcieri in the U.S. to answer questions about assets that might be available to pay off $1.7 billion in judgments against the South American country.

Forcieri, a former World Bank director, has ignored demands to produce documents and be questioned, NML’s lawyers said in court papers. NML asked a judge to force Forcieri to turn over his passport and stay in the U.S.

Forcieri has “imminent plans” to leave the country permanently on Nov. 8, the hedge fund said.

NML has been locked in a court fight with the South American nation over its refusal to pay holders of its defaulted sovereign debt. The country hasn’t paid numerous court judgments in favor of defaulted bondholders and has vowed never to pay the hedge funds’ claims, calling the holders “vultures.”

NML’s fruitless, decade-long quest to recoup its investments now has the fund scouting for Argentine assets around the world.

Forcieri couldn’t immediately be located for comment.

The Washington case is NML Capital Ltd. v. Argentina, 14-mc-01237, U.S. District Court for the District of Columbia (Washington). The New York case is NML Capital Ltd. v. Republic of Argentina, 08-cv-06978, U.S. District Court, Southern District of New York (Manhattan).

Law Firm News

White & Case Adds Two Partners to Its White-Collar Practice

Daniel Fridman and Michael Garcia have joined the white-collar practice of White & Case LLP as partners in its Miami office.

Fridman and Garcia, who were both previously partners at Holland & Knight LLP, have experience conducting internal investigations for clients doing business in Latin America. They also advise clients on anti-corruption issues and on government enforcement and compliance matters, including providing compliance training in Spanish, the firm said in a statement.

Fridman advises corporations and individuals for violations of U.S. laws including the Foreign Corrupt Practices Act and the False Claims Act. He advises companies in the health-care industry as well.

Garcia, who has experience with the FCPA, accounting, financial reporting and related disclosure matters, has led internal investigations arising from allegations of potential misconduct in the U.S. and Latin America involving subsidiaries of American and European businesses. He also has advised audit committees on complex accounting and financial-reporting practices.

Sutherland Asbill Adds Insurance and Financial-Services Partner

Dodie Kent joined the insurance and financial-services practice of Sutherland Asbill & Brennan LLP as a partner in New York.

Kent previously was associate general counsel at AXA Equitable Life Insurance Co., where she was the company’s principal legal securities adviser on its variable and fixed life and annuity product lines.

With more than 20 years’ experience in financial services, Kent advises on product design, marketing and administrative issues. She also counsels on related regulatory compliance and enforcement issues.

Former IRS Lawyer Canup Joins Hirschler Fleischer in Virginia

James Canup joined Hirschler Fleischer as a Richmond, Virgina-based partner to chair the firm’s tax practice.

Canup, most recently a partner at Kaufman & Canoles PC, also worked in the chief counsel’s office of the Internal Revenue Service.

He focuses on pass-through entities such as LLCs and partnerships, real estate investment trust, corporate transactions and tax-exempt organizations. He also advises issuers and investment managers on qualified tuition programs.

(Published by Bloomberg – November 6, 2014)

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