(Hope everyone had a risk-mitigated New Year's celebration. We took a few weeks off. Now, back to work.) First up: "Proskauer Cases Reflect Efforts to Put Firms on Defensive" --
- "In recent motions, plaintiffs have either alleged malpractice or that the firm’s attorneys had conflicts of interest and should be disqualified. In a statement, a firm spokeswoman said 'these four matters are completely unrelated and, in some cases, relate to events that occurred nearly a decade ago. They either are transparently tactical maneuvers by adversaries or efforts to seek a windfall by plaintiffs who are unhappy with the consequences of their own business decisions.'"
- "Proskauer is not the only law firm defending its practice. In recent weeks, there have been motions in professional liability cases involving Schnader Harrison Segal & Lewis, Sidley Austin and Wachtell, Lipton, Rosen & Katz."
- "Howard Elman, a managing member at Matalon Shweky Elman said, 'big law firms are getting hit left and right these days.' He attributes a rise in claims against large firms to factors such an increase in conflict issues, clients not having the same allegiance to firms as in the past and an active malpractice plaintiffs bar."
See the full article for more detail on the specific cases. Next up, a look at how new rules may create new temptations and new risks. The author has no qualms taking a proactive position: "How to Make a Killing Trading on Insider Information - Legally" --
- "I suspect most investors believe the use of insider information is illegal. If so, they are only partially correct. A recent decision by the U.S. Court of Appeals for the Second Circuit (United States of America v. Todd Newman, Anthony Chiasson et. al) will make it exceedingly difficult to prosecute a broad range of insider trading cases, even when insider information is used and huge profits are generated."
- "Assuming that this opinion is not overturned by the Supreme Court and remains the governing precedent, maybe you can profit from it. If you have the good fortune to overhear a conversation at a posh restaurant between a CEO and an investment banker concerning the imminent takeover of a public company, you can trade on that information with impunity. Why? Because even if you know the information was coming from the CEO, the CEO did not disclose it in exchange for a 'personal benefit.'"
- "Similarly, if you have a friend who is an attorney at a major law firm and he discloses confidential information about a publicly traded company that is a client of his firm, you can trade on that information as well. The lawyer presumably did not tell you where he got the information and he did not benefit from disclosing it to you. Of course, the lawyer violated both his legal obligation to his firm and his fiduciary obligation to his client."