Volvo asks Hausfeld to chase Pilkington for price-fixing losses -- Katy Dowell

Hausfeld has launched a High Court claim against Pilkington Group on behalf of motoring giant Volvo, almost three years after the car glass manufacturer was fined for price fixing.

Pilkington was handed a €140m (£100m) fine by the European Commission in 2007 for conspiring with three glass manufacturers - Asahi, of Japan; Guardian, of the United States; Saint-Gobain, of France - to fix the price of flat glass and allocate markets for car glass products between 1998 and 2003.

Volvo has instructed Hausfeld partner Anthony Maton to pursue Pilkington for losses it suffered as a result of the price fixing.

Maton said: “The car glass cartel was fined at record levels by the Commission and caused substantial damage to our client Volvo and others in the struggling car industry.

“Volvo has therefore instructed us to recover the significant financial losses it suffered due to these inflated prices over a period of five years.”

Litigators across the City have reported a significant rise in the number of follow on actions arising from cartel investigations.

Last month British Airways went to the High Court to request that a number of international airlines, including Air France, KLM, Cathay Pacific, Cargolux, Qantas and Emirates, be named as co-defendants in a lawsuit over a price-fixing cartel for air-freight services.

BA pleaded guilty to price fixing to regulatory authorities in the US, Australia and Canada and were recently fined by the regulatory authority in South Korea. The EC, however, is yet to deliver a verdict on its investigation into the airline.

Slaughter and May partner Richard Swallow instructed Kenneth MacLean QC of One Essex Court to represent BA. Maton, who is representing two flower importers  who claim to have suffered losses as a result of the alleged cartel, has instructed 20 Essex Street’s Iain  Milligan QC to bring the claim.

That case is currently awaiting judgment from the Court of Appeal to decide whether Hausfeld can bring a representative action against BA.

http://www.thelawyer.com/volvo-asks-hausfeld-to-chase-pilkington-for-price-fixing-losses/1005213.article

Federal Lawsuits Seek $30 Million in Madoff Family Money -- Larry Neumeister

The court-appointed trustee seeking to recover billions of dollars lost by jailed financier Bernard Madoff sued three entities Thursday to get back more than $30 million that he said the Madoff family had invested, mostly in oil and gas properties and technology companies.

The three lawsuits filed in U.S. Bankruptcy Court in Manhattan by Irving Picard are a follow-up to a lawsuit he filed in November seeking nearly $200 million from family members who he said lived lavishly while using the family finance business like a "piggy bank."

Picard wrote sarcastically in the latest lawsuits that Madoff was "quite generous" with the money he stole from thousands of customers in history's largest Ponzi scheme.

"Foremost among the recipients of Madoff's gifts of customer funds were his closest family members, including his wife Ruth Madoff, his brother Peter, his two sons Andrew and Mark and his niece Shana," Picard said.

"With respect to Mark and Andrew, the lawsuits are without merit, both factually and legally," said Martin Flumenbaum, a lawyer for Madoff's sons.

Peter Chavkin, a lawyer for Ruth Madoff, declined to comment.

Messages left with lawyers for Peter and Shana Madoff were not immediately returned.
The 72-year-old Madoff is serving a 150-year prison sentence after admitting that he never invested tens of billions of dollars he received from investors.

Defendants named in the lawsuits Thursday included Madoff Energy Holdings LLC, Conglomerate Gas Resources, Madoff Technologies, Madoff Brokerage & Trading Technology LLC, Primex Holdings LLC and Madoff Family LLC. Picard said the entities were controlled by Madoff family members, many of whom worked for Madoff.

The lawsuits sought more than $22 million invested in technology companies, more than $5 million invested in oil and gas properties and another $3 million from the Madoff Family Fund, which included investments in a hedge fund and a biotechnology company.

The lawsuits said the investments were used as vehicles to funnel money out of Bernard L. Madoff Investment Securities.

According to the lawsuits, the investment arm of Madoff's business generated account statements in early December 2008 for approximately 4,900 open customer accounts that claimed they were worth about $68 billion. In reality, Madoff had lost all but a trace of the original $20 billion invested by his customers, the lawsuits said.

Madoff confessed in December 2008 to his sons and later to the FBI that his business had operated for about two decades as a Ponzi scheme in which some investors were paid off with the money provided by new investors.

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Lawyer's Indecent Proposals to Female Clients Bring One-Year Suspension -- By Michael Booth

The New Jersey Supreme Court on Thursday issued a one-year suspension to a Newark lawyer who offered discounted fees to female clients or their family members in exchange for sexual favors.

David Witherspoon might consider himself lucky. Two justices wanted him disbarred and said the court should set a bright-line rule like the one that mandates disbarment for trust-fund theft.

"One's bodily integrity is at least as important as the security of the finances one entrusts to an attorney," Justice Jaynee LaVecchia said in a dissent joined by Justice Barry Albin.

"The only appropriate measure of discipline that protects the public from respondent's intolerable behavior, and sends a zero-tolerance message toward lawyers who would consider preying on their clients, is disbarment."

But the rest of the court was more forgiving, saying the facts did not warrant imposing so extreme a punishment. This record … lacks the severity of the sexually-unethical behavior that we have previously considered to be worthy of disbarment," Justice Helen Hoens wrote for the majority in In the Matter of David Witherspoon, D-157-08.

For his part, Witherspoon says he disagrees with the court's assessment of what occurred between himself and his clients. "I have a decent record of providing affordable service to over 10,000 clients and will resume that level of service when this period is over," he says.

Witherspoon, a Newark solo, was charged with telling four female clients in bankruptcy cases that he would reduce or forgive fees in return for sexual favors. According to the stipulated fact record:

• In 2001, Witherspoon asked one client, S.S., about her personal life, asked if she would go out with him and made inappropriate sexual advances.

• In 2005, he told T.B., the daughter of a client, that he would forgive her father's debt of $300 in legal fees if she would meet him in a hotel room for three hours. Later in the case, he offered to forgive another $200 if she would dance for him in a bathing suit at his office.

• In 2005, when a client, S.B., visited Witherspoon's office accompanied by a female friend, he commented that many gay women "come on" to him and that if S.B. and her friend would "make out" he would file S.B.'s bankruptcy free of charge. Later, when S.B. told him that there was another creditor to be added to the petition, Witherspoon said he would do so only if S.B. lifted her skirt. On another occasion, he told her she could satisfy her outstanding legal fees by allowing him to watch her with her female friend or by letting him join in.

• In 2005, when a client, A.C., arrived for one of her appointments, Witherspoon said, "Oh, so you're the gay girl," and suggested that her lesbianism was caused by a bad experience with the male sex organ. On another occasion, he told her that he was a "breast man" and that if she joined him on his office couch, he would return to her $660 of the legal fees she had paid him.

None of the women accepted his offers. In his defense, Witherspoon said the atmosphere in his office was very relaxed and conversations on subjects of "a highly personal nature" were common. He also said the comments were made "purely in jest" and that he never intended to insult or demean any of the grievants. But the women all testified they believed he was proposing to exchange legal services for sex.

The District VI Ethics Committee that first heard the case found Witherspoon's respondent's explanations for his conduct unpersuasive and found he violated several Rules of Professional Conduct, among them RPC 1.7(a)(2) (conflict of interest) and RPC 8.4(g) (sexual discrimination or harassment).

The committee recommended a censure, along with mandatory sexual harassment sensitivity training and other supervisory measures.

The Disciplinary Review Board recommended, after de novo review, agreed with the committee on its findings but not as to discipline. The board urged a three-month suspension while two members would have imposed six months.

The DRB minority cited Witherspoon's prior disciplinary history. Admitted to the bar in 1994, he was on four prior occasions admonished, reprimanded and censured for shoddy recordkeeping and for failing to communicate with clients. That, together with his lack of contrition for his actions in the present case, evidenced "both arrogance and a lack of moral values," the minority said.

When the court heard his case last Dec. 1., Witherspoon offered apologies for his conduct. "I do want to express my regret for my behavior," he told the justices, admitting that until recently he did not take the attorney disciplinary system as seriously as he should have.

"It took me months to understand that the RPCs are there to help my practice," he said, recounting five steps he had taken to improve himself professionally. He said he had taken professional responsibility courses, hired an accounting firm, adopted a policy of immediately returning telephone calls and conducted his own audit of his business and trust accounts.

At the hearing, Witherspoon's attorney Bernard Freamon urged the court to impose the minimum suspension and consider appointing a proctor. "Mr. Witherspoon is trying to turn the corner," said Freamon, a Seton Hall University School of Law professor. "I don't believe you will see Mr. Witherspoon again."

In Thursday's opinion, Hoens said that the DRB majority's recommendation was "inadequate" but that there was no bright-line rule for the proper discipline to impose.

"Although we have cautioned that sexual offenses involving clients will be treated severely … there are few published decisions addressing such matters, and those decisions yield a variety of disciplinary outcomes,"

Hoens wrote.

Disciplinary cases involving sexual misconduct of a criminal nature have resulted in disbarment, she said, while others have led to periods of suspension ranging from three months to three years.

Only in certain cases -- such as willful misappropriation of funds or certain violent criminal offenses -- is there a bright-line rule mandating disbarment, Hoens said. Otherwise, "all discipline is fact-sensitive."
There were three reasons why the majority believed a one-year suspension was appropriate.

First, Hoens said, "As offensive as respondent's behavior was … none of the grievants accused respondent of forcing them to endure any unwanted physical contact or even attempting to do so; none of them felt sufficiently pressured that she even considered giving in; none sought therapy or treatment to overcome the experience; none has suggested the incidents were traumatic; and none pursued criminal charges."

Second, the record "lacks the severity" of behavior that in prior cases have led to disbarment. There was no evidence that Witherspoon was threatening or dangerous, Hoens said.

Third, while preying on clients goes directly to the heart of the attorney-client relationship, the majority could not go along with creating a bright-line rule mandating disbarment.

"[W]e cannot endorse the dissenters' automatic disbarment approach because of its broader implications," Hoens said.

"Carried to its logical conclusion, creating the zero tolerance' rule that they advocate based on this record would demand that we automatically disbar attorneys involved in non-criminal, non-threatening, non-traumatizing, purely verbal, sexual improprieties directed at other adults, simply because they are clients.
"In light of our disciplinary precedents making pain that not every conviction for a sexual offense will result in disbarment, we conclude that it would be disproportionate punishment indeed if respondent's behavior, although boorish, insensitive and offensive, but well shy of criminal, found itself on the far side of that bright line."

The Court said Witherspoon must undergo sensitivity training and institute accounting controls in his office before he can return to practice.

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Supreme Court Trims 'Miranda' Warning Rights Bit by Bit "Justice Sotomayor says the majority's latest decision 'turns Miranda upside down'" by Jesse J. Holland

 You have the right to remain silent, but only if you tell the police that you're remaining silent.

You have a right to a lawyer -- before, during and after questioning, even though the police don't have to tell you exactly when the lawyer can be with you. If you can't afford a lawyer, one will be provided to you. Do you understand these rights as they have been read to you, which, by the way, are only good for the next two weeks?

The Supreme Court made major revisions to the now familiar Miranda warnings this year. The rulings will change the ways police, lawyers and criminal suspects interact amid what experts call an attempt to pull back some of the rights that Americans have become used to over recent decades.

The high court has made clear it's not going to eliminate the requirement that police officers give suspects a Miranda warning, so it is tinkering around the edges, said Jeffrey L. Fisher, co-chair of the amicus committee of the National Association of Criminal Defense Lawyers.

"It's death by a thousand cuts," Fisher said. "For the past 20-25 years, as the court has turned more conservative on law and order issues, it has been whittling away at Miranda and doing everything it can to ease the admissibility of confessions that police wriggle out of suspects."

The court placed limits on the so-called Miranda rights three times during the just-ended session. Experts viewed the large number of rulings as a statistical aberration, rather than a full-fledged attempt to get rid of the famous 1966 decision. The original ruling emerged from police questioning of Ernesto Miranda in a rape and kidnapping case in Phoenix. It required officers to tell suspects taken into custody that they have the right to remain silent and to have a lawyer represent them, even if they can't afford one.

The court's three decisions "indicate a desire to prune back the rules somewhat," Kent Scheidegger, the legal director of the Criminal Justice Legal Foundation, a victims' rights group. "But I don't think any overruling of Miranda is in the near future. I think that controversy is pretty much dead."

The Supreme Court in 2000 upheld the requirement that the Miranda warning be read to criminal suspects.
This year's Supreme Court decisions did not mandate changes in the wording of Miranda warnings read by arresting police officers. The most common version is now familiar to most Americans, thanks to television police shows: "You have the right to remain silent. Anything you say can and will be used against you in a court of law. You have the right to speak to an attorney. If you cannot afford an attorney, one will be appointed to you. Do you understand these rights as they have been read to you?"

However, the court did approve one state version of the Miranda warnings that did not specifically inform suspects that they had a right to have a lawyer present during their police questioning.

The Miranda warning used in parts of Florida told suspects: "You have the right to talk to a lawyer before answering any of our questions. If you cannot afford to hire a lawyer, one will be appointed for you without cost and before any questioning. You have the right to use any of these rights at any time you want during this interview."

Lawyers -- and the Florida Supreme Court -- said that didn't make clear that lawyers can be present as the police are doing their questioning. But Justice Ruth Bader Ginsburg, writing the 7-2 majority decision, said all the required information was there.

"Nothing in the words used indicated that counsel's presence would be restricted after the questioning commenced," Ginsburg said. "Instead, the warning communicated that the right to counsel carried forward to and through the interrogation."

The next day, the court unanimously limited how long Miranda rights are valid.

The high court said for the first time that a suspect's request for a lawyer is good for only 14 days after the person is released from police custody. The 9-0 ruling pulled back from an earlier decision that said that police must halt all questioning for all time if a suspect asks for a lawyer.

Police can now attempt to question a suspect who asked for a lawyer -- once the person has been released from custody for at least two weeks -- without violating the person's constitutional rights and without having to repeat the Miranda warning.

"In our judgment, 14 days will provide plenty of time for the suspect to get reacclimated to his normal life, to consult with friends and counsel and to shake off any residual coercive effects of his prior custody," said Justice Antonin Scalia, who wrote the majority opinion.

And finally, the court's conservatives used their 5-4 advantage to rule that suspects must break their silence and tell police they are going to remain quiet if they want to invoke their "right to remain silent" and stop an interrogation, just as they must tell police that they want a lawyer.

All the criminal suspect needs to say is he or she is remaining silent, wrote Justice Anthony Kennedy. "Had he made either of these simple, unambiguous statements, he would have invoked his 'right to cut off questioning.' Here he did neither, so he did not invoke his right to remain silent."

But Justice Sonia Sotomayor said the majority's decision "turns Miranda upside down."
"Criminal suspects must now unambiguously invoke their right to remain silent -- which counter intuitively requires them to speak," she said. "At the same time, suspects will be legally presumed to have waived their rights even if they have given no clear expression of their intent to do so."

Police officers will look at these decisions and incorporate them into their training, said James Pasco of the National Fraternal Order of Police. "Officers are expected to adapt to changes required by the Supreme Court," Pasco said. "This will be no different."

But Fisher thinks the court's Miranda decisions will make it easier for police to get confessions out of people who don't want to confess. "Those decisions open up ways for cops to work around Miranda," Fisher said.

http://www.law.com/jsp/article.jsp?id=1202464143411&Supreme_Court_Trims_Miranda_Warning_Rights_Bit_by_Bit 

Financial Reform Keeps Law Firm Banking and Securities Practices Busy -- By Sheri Qualters

Regulations for the recently enacted financial reform law are months away, but law firms with strong financial services practices are rolling out the welcome mat for client conferences and filling their calendars with client meetings.

Debevoise & Plimpton of New York, for example, attracted 325 attendees to a July 8 conference organized with one week's notice, including the July 4 holiday weekend, said Greg Lyons, co-chairman of the firm's financial institutions group for the Americas.

The conference predated the July 21 enactment of the Dodd-Frank Wall Street Reform and Consumer Protection Act by a couple of weeks, but the firm assumed it wouldn't change much after it passed the U.S. House of Representatives on June 30.

"We're going to be doing more of that [kind of event]," Lyons said. "[The law] really is a fundamental shift in some of the oversight regulations."

Lyons predicted clients will frequently need further guidance and discussion during the next 18 months to two years. He's already got nine client meetings scheduled through the middle of August and expects to travel to Europe in the fall to meet with foreign banks with U.S. operations.

"If you look at the number of provisions and rules and the summary of provisions, [that's] over 170 pages long -- it's a staggering amount of work," Lyons said.

Clients' initial questions have largely focused on the so-called Volcker rule, which generally bans banking institutions from investing in private equity or hedge funds or engaging in proprietary trading, he said. Private equity funds that have banks as advisers or significant investors, or do joint ventures with banks to set up funds, also want to know what it means for them, said Lyons.

The law is designed to be somewhat painful for institutions, but there's a silver lining for some banks. Section 613 of the law will enable national or state banks to open branches in other states as if they were chartered in those states.

"It allows banks to branch interstate without regard to state law, and some of our clients are interested in that," Lyons said.

More than 200 attendees were signed up for Shearman & Sterling's panel discussion Thursday on the global business and legal implications of the financial reform bill, said partner Brad Sabel, who co-heads the New York-based firm's financial recovery and reform advisory group.

Like their Debevoise & Plimpton counterparts, Sabel and other colleagues are meeting with individual clients. "Several of us are a movable feast," Sabel said.

In addition to getting clients up to speed on the Volcker rule, Shearman & Sterling is helping clients set up a plan for complying with the Lincoln Amendment, which will require banks to establish a separately funded affiliate for swap trading activities in two years' time. Once agencies such as the U.S. Securities and Exchange Commission issue proposed regulations for comment, Sabel expects the firm to take an active role in helping clients draft comment letters.

"For big things like this, that can be quite a job," Sabel said.

In the past six months, New York's Proskauer Rose has held at least three webinars covering proposed legislation targeting private investment funds, including the Dodd-Frank bill and proposed European legislation, said Howard Beber, a Boston corporate partner and member of the firm's private investment funds group. Beber's group chiefly advises clients on the Private Fund Investment Advisers Registration Act of 2010 section of the financial reform bill. The private fund act calls for most hedge fund and private fund advisers to register with the SEC and implement compliance measures such as tapping a chief compliance officer, developing a written code of ethics and implementing policies to curb insider trading.

Beber said webinars are a good option for educating the firm's global client base of private investment fund clients. "The response to webinars has been tremendous," he said.

Although extensive regulatory scrutiny is a new phenomenon for private investment fund managers, the Investment Advisers Act dates back to 1940.

"While some particular rules [related to Dodd-Frank] have not yet passed, generally speaking the framework of what private investment fund managers are going to have to comply with is already in place," Beber said.
Aside from government scrutiny, financial services companies have to worry about bounty-seeking whistleblowers. The law calls for the SEC to pay whistleblowers cash rewards of between 10 percent and 30 percent of government sanctions from civil or criminal proceedings that top $1 million and are attributable to the whistleblower's information. The same standards apply to whistleblower information collected by the U.S. Commodity Futures Trading Commission.

"There's going to be an intense focus on compliance" over the coming years, Lyons said.

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