Hill Dickinson is examining the role of its outside providers and has launched an outsourcing pilot as part of a cost cutting review being rolled out across the firm.
Managing partner Peter Jackson and financial director Colin Wardale launched a review of the firm's practices over the summer in a bid to cut back on expenses. As part of the project, the national firm is attempting to cut money spent on outside providers in areas including training, education and business development resources.
The firm stressed the process was not with a view to making redundancies but an attempt to go over budgets with each of the seven practice group heads.
The move comes after the firm kicked off a business process outsourcing pilot earlier in the year across part of its secretarial function to see if it can boost savings. The pilot, led by head of HR Andrew Rushworth, is being conducted in Hill Dickinson's claimant and professional services teams with two different outsourcers in the UK.
Jackson (pictured) commented: "When we first started our large expansion plans [six years ago] we didn't have the infrastructure to support the business; now we are thinking that we may have too much. We are not taking a knife to the business and cutting out major things but we are objectively analysing whether everything we are spending our money on is necessary."
Jackson and Wardale are likely to present their findings to the board at the end of the year.
The firm is also considering whether it should take advantage of its geographical position and act as an outsourcer for the major City firms.
http://www.legalweek.com/legal-week/news/1730605/hill-dicks-pilots-business-outsourcing-reviews-outside-providers
Ankit Rawal
Banks to allow local groups to buy foreclosures -- By ALAN ZIBEL AP Real Estate Writer
The Obama administration says local officials could benefit from acquiring these properties and using the land for redevelopment projects. Congress has provided $7 billion in money to buy the homes.
These groups have been outbid by speculators who are snapping up foreclosures.
The administration says the largest mortgage lenders in the country, including Bank of America Corp. and Wells Fargo & Co. have agreed to let the groups purchase the properties ahead of private speculators.
http://news.findlaw.com/ap/f/1310/09-01-2010/20100901070502_07.html
Former Halliwells partners on the hook for further bank loans -- By Claire Ruckin
Second cash call and St James's deal leave some liable for £500k
Halliwells partners look set to be asked to repay more than £2m in additional bank loans taken in 2010 as further details of the now-defunct firm's finances and partner liabilities emerge.
The firm conducted a voluntary cash call at the beginning of the year which saw 28 partners contribute a total of £2.3m, facilitated by professional practice loans (PPLs) taken out from The Co-operative Bank.
Partners put in varying amounts depending on whether they had received a payout on completion of the firm's new offices in Spinningfields. Those who received the windfall contributed £20,000 per equity point, while those who did not put in £10,000 per point.
The capital raising was at the request of the Royal Bank of Scotland (RBS) and came at the same time that the firm renegotiated £19.8m of loan facilities with the bank.
The cash injection came in addition to a mandatory capital raising conducted in 2008, when partners doubled what they had in the firm. At the time PPLs were taken out with Handelsbanken.
Partners will now be expected to pay back outstanding loans with The Co-op, Handelsbanken and RBS - with some partners liable for in excess of £500,000.
A spokesperson for The Co-op commented: "We can confirm that The Co-operative Bank does have professional practice loans in place with Halliwells partners. However, due to customer confidentiality we are unable to discuss specific details."
News of the additional cash call comes as it emerges that the former 40-strong Halliwells equity partnership is facing liabilities of up to £3m on its former Manchester premises at St James's Court.
The firm agreed to a rental contract with a break clause in 2013; however, it left the premises in 2007 when it relocated to Spinningfields. A number of partners including litigation partner Paul Thomas and former senior partner Alec Craig acted as guarantors for the 40,000 sq ft space.
Thomas has sent letters of demand to meet rent liabilities to former equity partners. The firm is hoping to negotiate a discount with the landlord, but it is likely partners will owe at least £25,000 each.
Thomas has also contacted the London Court of International Arbitration and is hoping that former Halliwells partners will agree to participate in an arbitration process. He has instructed John McGhee QC of Maitland Chambers to advise on the matter.
In addition to Thomas and Craig, former Halliwells partners Matt Wightman and Chris Phillips are also named as guarantors on the St James Court lease. However, both are disputing this, given they left the firm in 2009 under the assumption their role as guarantors would be passed onto existing members within the firm.
Phillips left to become a consultant at Keoghs, while Wightman became chief executive of HL Interactive, the bulk legal services business which demerged from Halliwells last year. The duo have instructed Walker Morris to advise.
Halliwells issued notice of intention to appoint administrators in June, concluding the break-up and sale of its business the following month.
http://www.legalweek.com/legal-week/news/1730588/former-halliwells-partners-hook-bank-loans
Halliwells partners look set to be asked to repay more than £2m in additional bank loans taken in 2010 as further details of the now-defunct firm's finances and partner liabilities emerge.
The firm conducted a voluntary cash call at the beginning of the year which saw 28 partners contribute a total of £2.3m, facilitated by professional practice loans (PPLs) taken out from The Co-operative Bank.
Partners put in varying amounts depending on whether they had received a payout on completion of the firm's new offices in Spinningfields. Those who received the windfall contributed £20,000 per equity point, while those who did not put in £10,000 per point.
The capital raising was at the request of the Royal Bank of Scotland (RBS) and came at the same time that the firm renegotiated £19.8m of loan facilities with the bank.
The cash injection came in addition to a mandatory capital raising conducted in 2008, when partners doubled what they had in the firm. At the time PPLs were taken out with Handelsbanken.
Partners will now be expected to pay back outstanding loans with The Co-op, Handelsbanken and RBS - with some partners liable for in excess of £500,000.
A spokesperson for The Co-op commented: "We can confirm that The Co-operative Bank does have professional practice loans in place with Halliwells partners. However, due to customer confidentiality we are unable to discuss specific details."
News of the additional cash call comes as it emerges that the former 40-strong Halliwells equity partnership is facing liabilities of up to £3m on its former Manchester premises at St James's Court.
The firm agreed to a rental contract with a break clause in 2013; however, it left the premises in 2007 when it relocated to Spinningfields. A number of partners including litigation partner Paul Thomas and former senior partner Alec Craig acted as guarantors for the 40,000 sq ft space.
Thomas has sent letters of demand to meet rent liabilities to former equity partners. The firm is hoping to negotiate a discount with the landlord, but it is likely partners will owe at least £25,000 each.
Thomas has also contacted the London Court of International Arbitration and is hoping that former Halliwells partners will agree to participate in an arbitration process. He has instructed John McGhee QC of Maitland Chambers to advise on the matter.
In addition to Thomas and Craig, former Halliwells partners Matt Wightman and Chris Phillips are also named as guarantors on the St James Court lease. However, both are disputing this, given they left the firm in 2009 under the assumption their role as guarantors would be passed onto existing members within the firm.
Phillips left to become a consultant at Keoghs, while Wightman became chief executive of HL Interactive, the bulk legal services business which demerged from Halliwells last year. The duo have instructed Walker Morris to advise.
Halliwells issued notice of intention to appoint administrators in June, concluding the break-up and sale of its business the following month.
http://www.legalweek.com/legal-week/news/1730588/former-halliwells-partners-hook-bank-loans
Botox Maker to Pay $600 Million in Settlement Over Off-Label Uses -- By Sue Reisinger
Allergan, Inc. Wednesday said it has agreed to pay $600 million in criminal and civil penalties and plead guilty to one misdemeanor count of "misbranding" its drug Botox as part of a global settlement (pdf) with the federal government over off-label uses of the drug.
As part of the plea deal, the Irvine, Calif.-based drug company agreed to drop its First Amendment legal action against the U.S. government. This action, filed last fall, contended that the government's legal position -- that it's a crime for a drug company to communicate truthful information to physicians about off-label uses of its products -- violates the First Amendment and is inconsistent with the Federal Food, Drug & Cosmetic Act.
(Also See: Allergan Press Release (pdf))
At the time the action was filed, critics said it threatened the entire federal regulation of pharmaceuticals.
But one of the top First Amendment experts in the country, Harvard Law School professor Laurence Tribe, said at the time, "I think that Allergan has a strong First Amendment case for a right to market lawful but off-label uses for its drugs in a truthful and non-misleading way." But now the suit is dead.
Tony West, U.S. assistant attorney general in the civil division, said Allergan had also paid kickbacks (pdf) to doctors to try off-label uses. West trumpeted the size of the settlement as "impressive, to be sure."
But Allergan is paying only a fraction of the record $2.3 billion that Pfizer Inc. paid last year to settle misbranding allegations over its pain killer, Bextra. A Pfizer subsidiary also had to plead guilty to a felony in that case.
In Allergan's plea deal, the company admitted that between 2000 through 2005, its marketing of Botox -- not to be confused with its cosmetic cousin -- resulted in intended but off-label uses for the treatment of headache, pain, spasticity and juvenile cerebral palsy.
In March 2010, the Food and Drug Administration approved Botox for the treatment of adults with upper limb spasticity, and the company said clinical trials are under way to gain approval for the other uses.
Over 70 other countries already approve the use of the drug for juvenile cerebral palsy, and doctors in the U.S. can and do legally prescribe it. But it remains illegal for Allergan to discuss that off-label use with the doctors until the FDA approves it.
Of Allergan's penalty, $225 million will go to resolve civil claims asserted by the Department of Justice under the False Claims Act. The company continues to deny liability associated with the civil allegations.
"This settlement is in the best interest of our stockholders as it resolves all matters at issue in the investigation, avoids substantial costs of litigation, as well as the substantial risks to Allergan associated with government enforcement action," said Douglas Ingram, Allergan's executive vice president. Ingram was previously the company's chief legal officer dealing with the government's investigation and supervising the First Amendment suit.
The settlement still must be approved by the federal courts overseeing the criminal and civil cases. Allergan was represented by Paul Clement, a partner at King & Spalding in Washington, D.C., and a former U.S. solicitor general.
The deal also required the company to enter into a corporate integrity agreement with the Department of Health and Human Services. Under the agreement, Allergan will maintain its updated compliance program and undertake a series of compliance-related obligations, including additional monitoring, maintenance of specific written standards, auditing, training, education, reporting and disclosure, for five years.
The agreement also provides for an independent third-party review organization to assess and report on Allergan's compliance program.
Allergan estimated it will record pre-tax charges of between $610 million and $615 million in its third quarter in connection with the settlement. The amount includes interest and attorneys fees.
http://www.law.com/jsp/article.jsp?id=1202471484515
As part of the plea deal, the Irvine, Calif.-based drug company agreed to drop its First Amendment legal action against the U.S. government. This action, filed last fall, contended that the government's legal position -- that it's a crime for a drug company to communicate truthful information to physicians about off-label uses of its products -- violates the First Amendment and is inconsistent with the Federal Food, Drug & Cosmetic Act.
(Also See: Allergan Press Release (pdf))
At the time the action was filed, critics said it threatened the entire federal regulation of pharmaceuticals.
But one of the top First Amendment experts in the country, Harvard Law School professor Laurence Tribe, said at the time, "I think that Allergan has a strong First Amendment case for a right to market lawful but off-label uses for its drugs in a truthful and non-misleading way." But now the suit is dead.
Tony West, U.S. assistant attorney general in the civil division, said Allergan had also paid kickbacks (pdf) to doctors to try off-label uses. West trumpeted the size of the settlement as "impressive, to be sure."
But Allergan is paying only a fraction of the record $2.3 billion that Pfizer Inc. paid last year to settle misbranding allegations over its pain killer, Bextra. A Pfizer subsidiary also had to plead guilty to a felony in that case.
In Allergan's plea deal, the company admitted that between 2000 through 2005, its marketing of Botox -- not to be confused with its cosmetic cousin -- resulted in intended but off-label uses for the treatment of headache, pain, spasticity and juvenile cerebral palsy.
In March 2010, the Food and Drug Administration approved Botox for the treatment of adults with upper limb spasticity, and the company said clinical trials are under way to gain approval for the other uses.
Over 70 other countries already approve the use of the drug for juvenile cerebral palsy, and doctors in the U.S. can and do legally prescribe it. But it remains illegal for Allergan to discuss that off-label use with the doctors until the FDA approves it.
Of Allergan's penalty, $225 million will go to resolve civil claims asserted by the Department of Justice under the False Claims Act. The company continues to deny liability associated with the civil allegations.
"This settlement is in the best interest of our stockholders as it resolves all matters at issue in the investigation, avoids substantial costs of litigation, as well as the substantial risks to Allergan associated with government enforcement action," said Douglas Ingram, Allergan's executive vice president. Ingram was previously the company's chief legal officer dealing with the government's investigation and supervising the First Amendment suit.
The settlement still must be approved by the federal courts overseeing the criminal and civil cases. Allergan was represented by Paul Clement, a partner at King & Spalding in Washington, D.C., and a former U.S. solicitor general.
The deal also required the company to enter into a corporate integrity agreement with the Department of Health and Human Services. Under the agreement, Allergan will maintain its updated compliance program and undertake a series of compliance-related obligations, including additional monitoring, maintenance of specific written standards, auditing, training, education, reporting and disclosure, for five years.
The agreement also provides for an independent third-party review organization to assess and report on Allergan's compliance program.
Allergan estimated it will record pre-tax charges of between $610 million and $615 million in its third quarter in connection with the settlement. The amount includes interest and attorneys fees.
http://www.law.com/jsp/article.jsp?id=1202471484515
Calif. rejects ban on plastic shopping bags -- By ROBIN HINDERY Associated Press Writer
SACRAMENTO, Calif. (AP) - California lawmakers on Tuesday rejected a bill seeking to ban plastic shopping bags, after a contentious debate over whether the state was going too far in trying to regulate personal choice.
It would have been the first statewide ban, although a few cities already prohibit their use.
The Democratic bill had been the subject of a furious lobbying campaign by the plastic bag manufacturing industry, which called it a job killer.
The Senate took final action at the very end of the legislative session, reflecting how difficult it had been to muster support. The bill received just 14 votes in the Senate, seven short of the majority it needed.
Supporters of AB1998 said the 19 billion plastic bags Californians use every year harm the environment and cost the state $25 million annually to collect and transport to landfills.
Sen. Gil Cedillo, who carried the measure on the Senate floor, said it offered California an opportunity to emerge at the forefront of a global trend.
"If we don't solve this problem today, if we don't create a statewide standard, if we don't provide the leadership that is being called for, others will," the Los Angeles Democrat said.
A handful of California cities already ban single-use plastic bags, after San Francisco became the first to do so in 2007. Palo Alto, Malibu and Fairfax have since followed, while a ban approved in Manhattan Beach is tied up in litigation, said Matthew King, a spokesman for Heal the Bay, the Santa Monica-based nonprofit that sponsored AB1998.
The bill called for the ban to take effect in supermarkets and large retail stores in 2012. It would have applied to smaller stores in 2013.
Republicans and some Democrats opposed it, saying it would add an extra burden on consumers and businesses at a time when many already are struggling financially.
"If we pass this piece of legislation, we will be sending a message to the people of California that we care more about banning plastic bags than helping them put food on their table," said Sen. Mimi Walters, R-Lake Forest.
Sen. Lois Wolk, D-Davis, was one of half a dozen Democrats to vote against the bill. She said the state instead should offer incentives for reducing the use of plastic bags before imposing a statewide mandate.
http://news.findlaw.com/ap/f/1310/09-01-2010/20100901000501_02.html
It would have been the first statewide ban, although a few cities already prohibit their use.
The Democratic bill had been the subject of a furious lobbying campaign by the plastic bag manufacturing industry, which called it a job killer.
The Senate took final action at the very end of the legislative session, reflecting how difficult it had been to muster support. The bill received just 14 votes in the Senate, seven short of the majority it needed.
Supporters of AB1998 said the 19 billion plastic bags Californians use every year harm the environment and cost the state $25 million annually to collect and transport to landfills.
Sen. Gil Cedillo, who carried the measure on the Senate floor, said it offered California an opportunity to emerge at the forefront of a global trend.
"If we don't solve this problem today, if we don't create a statewide standard, if we don't provide the leadership that is being called for, others will," the Los Angeles Democrat said.
A handful of California cities already ban single-use plastic bags, after San Francisco became the first to do so in 2007. Palo Alto, Malibu and Fairfax have since followed, while a ban approved in Manhattan Beach is tied up in litigation, said Matthew King, a spokesman for Heal the Bay, the Santa Monica-based nonprofit that sponsored AB1998.
The bill called for the ban to take effect in supermarkets and large retail stores in 2012. It would have applied to smaller stores in 2013.
Republicans and some Democrats opposed it, saying it would add an extra burden on consumers and businesses at a time when many already are struggling financially.
"If we pass this piece of legislation, we will be sending a message to the people of California that we care more about banning plastic bags than helping them put food on their table," said Sen. Mimi Walters, R-Lake Forest.
Sen. Lois Wolk, D-Davis, was one of half a dozen Democrats to vote against the bill. She said the state instead should offer incentives for reducing the use of plastic bags before imposing a statewide mandate.
http://news.findlaw.com/ap/f/1310/09-01-2010/20100901000501_02.html
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.
http://www.law.com/jsp/article.jsp?id=1202464114009
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.
http://www.law.com/jsp/article.jsp?id=1202464114009
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.
http://www.law.com/jsp/article.jsp?id=1202464064588
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.
http://www.law.com/jsp/article.jsp?id=1202464064588
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
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.
http://www.law.com/jsp/article.jsp?id=1202464109685&Financial_Reform_Keeps_Law_Firm_Banking_and_Securities_Practices_Busy
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.
http://www.law.com/jsp/article.jsp?id=1202464109685&Financial_Reform_Keeps_Law_Firm_Banking_and_Securities_Practices_Busy
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