Judge Rejects Executive's 85-Year Guideline Sentence as 'Travesty of Justice'

Referring to the sentencing guidelines as having a 'fetish with abstract arithmetic'" United States District Judge Jed Rakoff explained his decision to not follow the federal sentencing guidelines in a securities fraud trial against a former business executive.

Are SuperLawyers Unethical?

While the general public is probably unaware of the publication, there is an advertising medium out there called "SuperLawyers" a publication which supposedly lists the best lawyers, by state or city.

While it is an advertising gimmick, and impossible for anyone to say that there are super lawyers out there, a New Jersey ethics panel ruled that lawyers are prohibited from advertising their inclusion in the SuperLawyer publications and taking part in the selection process.

That has generated a controversy regarding attorney advertising, and the concept of "super lawyers." Inside Opinions has the rundown of the controversy.

Judges Reading the Blogosphere

Professor Bainbridge has an interesting post regarding judges who read blogs. What happens when a judge reads a blog discussing a case that is pending before him?

N.Y. Judge Appoints Milberg Co-Lead Counsel in Backdating Suit

Stating that the firm's indictment had no bearing on its ability to handle its responsibilities as lead counsel, Manhattan Supreme Court Justice Richard Lowe appointed Milberg Weiss as lead counsel in a series of cases brought against voicemail software company Comverse Technology, Inc., whose top executives allegedly enriched themselves by almost $400 million by repricing stock option grants.

Readers will recall that Milberg Weiss and two of its partners were indicted in May on charges that they paid kickbacks to class action plaintiffs. All pleaded not guilty.

GunnAllen Moves to Upgrade Image

The competition for brokers and clients continues. GunnAllen joins the fray, but can they compete with Morgan's 200% deals?

Advisers misreport use of soft dollars

Advisers misreport use of soft dollars - July 24, 2006 - Sara Hansard - InvestmentNews: "One week after the Securities and Exchange Commission approved new guidelines governing the use of so-called soft dollars, the commission's top inspections official said that many investment advisers underestimate the benefit they receive from such commission-sharing arrangements.

Many advisers do not take into account the research they receive from affiliated broker-dealers when asked to report on their use of soft dollars, said Lori Richards, director of the SEC's office of compliance inspections and examinations. "

Follow the link for the full article from Investmentnews.com

Ex-CEO Charged in Backdating Probe, as SEC Weighs Others' Conduct:

The SEC has announced civil and criminal charges against the former CEO and HR manager of Brocade Communications Systems related to backdating of options grants.

The criminal aspect of this may prove to be interesting, as companies and commentators start to downplay the "intent" and "self-enrichment" aspect of the grants.

Lay Case Suggests Health Risk for White-Collar Felons

The death of Ken Lay provokes an interesting look at Law.com of an often overlooked risk to white collar defendants - death by stress.

Congressional Hearings on Plaintiff's Attorneys

With the Milberg Weiss indictment, Congress is holding hearings to amend the Private Securities Litigation Reform Act, to include provisions regarding "attorney accountability." Once again, Congress and regulators are attempting to address a problem by creating new laws, when the ones that we already have are not being enforced.

I understand that Congress is comprised of politicians, who feel this need to appear to be "doing something" when a problem arises, but enacting new rules and regulations is simply a feel-good solution, and often has unintended consequences.

Witness Sarbanes Oxley - a hastily and poorly drafted series of statues and regulations has impacted the financial markets far beyond the original issue, and created new rules and regulations when the existing ones were just fine - they simply were not being enforced.

Now, this amendment, to address the Milberg Weiss issue. Why is there a need for more legislation? The individuals accused of wrongdoing have been INDICTED! If the indictments are correct, these individuals will go to prison. Is there a need for another law to make illegal that which is already illegal?

For those interested, the proposed bill, entitled the "Securities Litigation Attorney Accountability and Transparency Act," would add "loser pays" provisions, compel disclosure of conflicts (we already have that rule) and add "competitive bidding" to the process of selecting lead plaintiff's counsel.

I am a defense attorney, and have participated in the defense of a number of class actions. I am certainly not a fan of class actions, but this bill is over the top.

Congress is trying to make the appointment of the lead plaintiff's attorney subject to competitive bidding? Have they lost their minds? First, there is nothing more important in litigation than the relationship between an attorney and his client. While it is certainly true that a class action plaintiff's attorney represents more than the lead plaintiff, it is that relationship that drives the litigation. The court is now going to put out to bid who represents the lead plaintiff?

Additionally, this is not some pork barrel construction project, where a large part of the costs for materials and labor are fixed. This is often high end securities litigation, where you do get what you pay for. Some of these class action law firms spend millions of dollars and years of work on these cases. This is not something that any law firm can handle. It requires expertise, skill and experience.

The 10b-5 Daily has the links to the bill, and the prepared remarks. The Secretary of Massachusetts, William Galvin, an outspoken investor advocate, and Professor James Cox of Duke University School of Law, were two of the four witnesses, and largely opposed the bill. For those of you interested in theory and practical aspects of class action litigation, their testimony is an interesting overview of recent events in class action litigation.

You Leaving Me?—Mother Merrill Asks Some Top Producers If They’re Fixin’ to Depart

You Leaving Me?—Mother Merrill Asks Some Top Producers If They’re Fixin’ to Depart: "If you are one of Merrill Lynch’s best financial consultants and you have been flirting with other brokerages or financial-planning firms, watch out: You could get hit with a Merrill loyalty statement.

Merrill Lynch acknowledged that it has asked some of its best producers -- ones it suspects are actively pursuing new jobs -- to answer a series of questions about whether they are in talks—or have had talks—with other companies about leaving. Further, the questionnaire asks if the FCs have already given a commitment to join a rival financial-services firm. The firm says it has produced the two-page document entitled, Present Employee Interview Questionnaire, in rare cases and only when the firm had proof of an advisor’s contact with rivals"

This is interesting. If you say yes, you get canned. If you mislead them and say no, you get sued. It is probably not much of a lawsuit, but the first Merrill rep to get sued for lying on this "Loyalty Statement" is going to have an interesting case.