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Federal Judge Takes Issue With SEC's Treatment of Ponzi Scheme 'Winners'

The Legal Intelligencer

In a ruling sure to cause a buzz among financial regulators, a federal judge has publicly disagreed with the policy of the Securities and Exchange Commission in how it treats investors in Ponzi schemes who were lucky enough to get their money back before the scheme collapsed. As the judge sees it, the policies of the SEC and the Commodity Futures Trading Commission are potentially unfair to later investors whose funds are typically used to pay back principal -- and provide the false "profits" -- to the early investors.

Privilege Logs: A Call for Change

Claiming and adjudicating privileges in eDiscovery presents significant challenges and costs. Hon. John Facciola(U.S. Magistrate Judge, District of Columbia) and Jonathan Redgrave(Partner, Nixon Peabody LLP) discuss their soon to be published law review article addressing potential solutions for privilege issues. Moderator Vickie Redgrave contributes her in-house and outside counsel experience.

Bankruptcy Rates Top $1,000 Mark in 2008-09

The American Lawyer

A review of bankruptcy rates in Delaware and the Southern District of New York shows that a handful of U.S.-based partners at Am Law 200 firms have inched above the $1,000 rate barrier, making bankruptcy work as lucrative as it was plentiful in 2008 and 2009. Over a 12-month period ending August 2009, there were more than 13,000 billing rate entries submitted by law firms in the nation's two busiest bankruptcy courts, according to a new database compiled by ALM Media.

Judge Says Government 'Distorted the Truth-Finding Process' in Broadcom Case

The National Law Journal

U.S. District Court Judge Cormac Carney, who dismissed the entire criminal stock options backdating case against two former Broadcom Corp. executives Tuesday, concluded that the government's handling of the case "distorted the truth-finding process" and made a "mockery" of the defendants' due process rights. "For these constitutional rights to have true meaning, the government must not do anything to intimidate and improperly influence witnesses," Carney said. "Sadly, they did so in this case."

En Banc 9th Circuit Grapples With State Secrets Privilege in CIA Rendition Case

The Recorder

An 11-member en banc panel of the 9th Circuit heard arguments Tuesday in a case brought against a Boeing subsidiary by men who claim to have been abducted and flown to countries to be tortured as part of the CIA's "extraordinary rendition" program. The government contends the suit can't go forward without revealing state secrets. A circuit panel had ruled that a sealed declaration from the CIA is not enough to compel a dismissal and that judges need to make an independent analysis of both public and classified evidence.

WilmerHale Freezes Salaries, Breaks Lockstep

The American Lawyer

WilmerHale is unveiling a new compensation system designed to break away from lockstep, encourage alternative career paths and shift a larger chunk of lawyers' pay from their base salary to their bonus, according to firm higher-ups. The crux of the change involves dividing nonpartners into several tiers and linking each of those tiers to a set base salary. Within those tiers, pay will vary greatly depending on individual bonuses, which will be merit-based and will not be linked to seniority or billable hours.

Judges May Be Penalized for Delays, N.Y. High Court Rules

New York Law Journal

Judges may be penalized for tardiness in their rulings, but such misconduct must be determined based on the circumstances of the individual cases, the New York state Court of Appeals held Tuesday. Ruling on a state Commission on Judicial Conduct recommendation to admonish Judge James B. Gilpatric for his delays in ruling on 43 cases and four motions from 2004 to 2008, the court said that "a judge's failure to promptly dispose of pending matters is primary a matter for administrative correction" within the court system.

Sonnenschein Announces Merit-Based Compensation Plan

The American Lawyer

Sonnenschein, Nath & Rosenthal announced on Tuesday a plan to move away from lockstep compensation for associates, and in its decision -- and others -- we are beginning to see a new consensus emerge on how exactly firms believe a merit-based system should be structured. Sonnenschein's plan will involve a three-tier system in which associates will advance once they meet various merit-based criteria, including "written and verbal communication, strategic thinking, organization, and other components of legal excellence."

SEC Invokes Immunity in Negligence Suit by Madoff Victims

The American Lawyer

Just in time to mark the one-year anniversary of the Madoff scandal, the Securities and Exchange Commission moved Monday to dismiss a suit by two Madoff victims who want to hold the agency accountable. Attorneys at Herrick Feinstein sued the SEC in New York federal court under the Federal Tort Claims Act on behalf of two Madoff investors who together lost more than $2.4 million. The SEC argues it cannot be held liable because its activities fall under a "discretionary functions" exception to the FTCA.

Inside Jones Day's 685-Page Lehman Fee Application

The American Lawyer

Jones Day's latest fee application for the Lehman Brothers bankruptcy, filed Tuesday, goes into a level of detail rarely seen. The document, which covers $9 million in fee and expense requests from June 1 through the end of September, runs a whopping 685 pages and lists every action any Jones Day lawyer (or staffer) took in the case. Every cab ride, every photocopy, every late-night food delivery -- it's all there, and it presents an exhaustive portrait of what it's like to work on a case of this magnitude.

Billionaire Hedge Fund Manager Indicted in Insider Trading Case

The Associated Press

Billionaire Manhattan hedge fund manager Raj Rajaratnam and another executive embroiled in a $52 million insider trading case were indicted Tuesday on multiple counts of conspiracy and securities fraud. Rajaratnam was arrested in October on a criminal complaint alleging he used inside information to make trades that generated millions of dollars in profits for a fund in his firm, the Galleon Group. The second person indicted in the case was Danielle Chiesi, a portfolio manager at New Castle Funds LLC.

'Insinuation' Hurt Right to Fair Trial, Former Judge Argues

New York Law Journal

Ex-Brooklyn Justice Gerald P. Garson's appeal of his criminal conviction and three-to-10 year sentence was argued in a New York appeals court just days before Garson is to be released on probation. Garson's lawyer, Jeremy Gutman, came out swinging, telling the four-judge panel that Garson had been denied his "fundamental" right to a fair trial by the prosecution's repeated "insinuation" that Garson had taken bribes to fix cases, a charge that was not contained in the indictment.

Nixon Peabody Defers the Already Deferred

The American Lawyer

Two-thirds of Nixon Peabody's incoming associate class scheduled to start in January won't begin working until Feb. 8 or later. Nixon Peabody's hiring partner informed the firm's new lawyers on Monday that while one-third of the class would start after the holidays, another two-thirds would be phased in quarterly throughout 2010. "The remaining associates will continue to be deferred and we hope will join the firm as our client needs evolve," Allison McClain said in a statement to The Am Law Daily.

D.C. Circuit Hears Atheists' Suit Over Presidential Oath

The National Law Journal

Atheist lawyer Michael Newdow, who has unsuccessfully challenged religious trappings of presidential inaugurations past, took his latest dispute -- this one involving Barack Obama's inauguration -- to the D.C. Circuit on Tuesday. Newdow and his fellow plaintiffs say the phrase "so help me God" at the end of the oath of office violates the establishment clause of the First Amendment. Newdow argued that he has suffered "stigmatic" injury. Atheists, he said, are considered "second-class citizens" in the United States.

Divided N.Y. Court of Appeals Upholds Televised Testimony

New York Law Journal

A divided New York Court of Appeals decided Tuesday that a trial court properly allowed an elderly man who was too ill to travel to New York to testify against his alleged attacker via a two-way video conference hookup from California. The 4-2 majority said it found nothing in state statutes that expressly prohibited the use of the two-way televised testimony, and that the defendant's rights were not violated under the confrontation clauses of the state or federal constitutions.

Jury Sides With Movie Theater Chain in Suit Over 'Wet Floor' Sign

Fulton County Daily Report

A movie theater chain that lost a trip-and-fall case before a unanimous Georgia Supreme Court has been redeemed by a Clayton County, Ga., jury. After deliberating fewer than 30 minutes, the jury decided that AMC is not liable to a woman who claimed she was injured after tripping on a "wet floor" sign at the company's theater. While he was pleased for his client, the winning lawyer said the verdict didn't override the lesson of the state high court's ruling, which said the trip-and-fall case had to go to a jury.

To Have and to Hold: A Romantic Guide to Document Preservation

Special to Law.com

"Romantic" would not be the first or last word that comes to mind when considering the best practices in document preservation. But Gibson Dunn attorney Farrah Pepper shows that the same common-sense principles that preserve romantic unions can apply to successful document preservation.

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Wolf Block Alumni Help to Throw Holiday Party Reunion

The Legal Intelligencer

The lawyers and staff of defunct firm Wolf Block have scattered across Philadelphia, some landing jobs and some still looking. But today, they will come together again, thanks to efforts by some alumni to put together a Wolf Block holiday party. One goal of the party is to provide a networking opportunity for those still out of work. Jonathan A. Segal, one of the party organizers, said that of the more than 180 people currently set to attend, about one-third are underemployed or unemployed.

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San Francisco Associate Wins $1 Million in ESPN Game

The Recorder

Blake Thompson may be about to become the most popular associate in San Francisco. Thompson, who focuses on constitutional and civil rights law at 16-attorney Rosen, Bien & Galvan, just beat three other contestants to claim a $1 million grand prize in ESPN.com's Streak for the Cash Pick-Off on Monday. Asked whether he expected Thompson to return to his civil rights practice, Rosen, Bien & Galvan partner Mike Bien said: "He'd better. He's doing a very important brief for me that's due in a couple of weeks."

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