Having defied the Securities and Exchange Commission and beaten its inside trading allegations in court, the investor and team owner is not through giving them a piece of his mind: “I think they exemplify what type of organization you should expect when you have nothing but attorneys and in particular former prosecutors running the show. …There is a culture of trying to win, not trying to find justice.” In the absence of bright-line rules, notes Cuban, the commission resorts to “regulation through litigation,” trying to ram through doubtful legal interpretations by way of sheer vehemence of enforcement. [Kevin Funnell/Bank Lawyer’s Blog, Alexander Cohen/Business Rights Center, earlier] Attorney Lyle Roberts, who represented Cuban, will also be known to some of our readers for his blogging at The 10b-5 Daily.
- Wells Fargo declines to serve firm that sells knives online, which might relate to a “mass de-risking” trend that followed Operation Choke Point [Kelsey Harkness/Daily Signal, H. Clay Aalders/The Truth About Knives]
- “Time For Securities Lawyers To Stand Behind Their `Confidential Witnesses'” [Lyle Roberts via Daniel Fisher]
- Attractions of English law may help London retain luster as financial center post-Brexit [Jon Sindreu, WSJ]
- “Hillary Clinton’s ‘Exit Tax’ Is an Unseemly Example of Banana Republic Economics” [Daniel Mitchell, related earlier] Three good ideas from Clinton’s small business tax plan [Scott Greenberg, Tax Foundation]
- Lawyers file class actions against Yale, Harvard, MIT, many other universities, objecting to excessive fees on retirement fund investments [Ira Stoll, Future of Capitalism; Benjamin Edwards, PrawfsBlawg]
- “White House climate disclosure plan is major executive overreach.” [Ray Lehmann, R Street Institute]
Has there been a more dramatic year than 2008 in the securities-law world since the 1930s? I’ll be among the participants tomorrow (Tuesday) afternoon at 2 p.m. Eastern in the first of an ongoing series of webcasts on a new “Securities Litigation and Enforcement Channel” being launched by prominent securities-law blogger Bruce Carton. It’s free, but registration is required: details here. I’ll be the relative amateur, with the other seats at the table held by some very highly qualified observers of the securities law scene: Lyle Roberts (The 10b-5 Daily), Kevin LaCroix (D&O Diary), Francine McKenna (re: The Auditors), and Thomas Gorman (SEC Actions), as well as Carton (cross-posted and updated from Point of Law, where I do most of my blogging on the subject).
The latest issue of the Federalist Society’s Class Action Watch has many articles of interest to Overlawyered readers:
- William E. Thomson & Kahn A. Scolnick on the Exxon Shipping case;
- Jimmy Cline on Arkansas’s disregard for class action certification standards;
- Jim Copland on the “Colossus” class action;
- Laurel Harbour on the New Jersey Supreme Court decision on medical monitoring class actions;
- Lyle Roberts on lead-counsel selection in securities class actions;
- Mark A. Behrens & Frank Cruz-Alvarez on the lead paint public nuisance decision by the Rhode Island Supreme Court; and
- Andrew Grossman, extensively citing to Overlawyered and my brief in discussing the Grand Theft Auto class action settlement rejection.
Plaintiffs firm Berman DeValerio sued attorneys Eran and Susan Boltz Rubenstein, former Coughlin Stoia attorneys, for breach of contract; in their counterclaim, the Rubensteins claim they were hired on a contingent fee basis to wrangle international clients to serve as plaintiffs in securities class actions. Lyle Roberts has the details, and the complaint and counterclaim. Alas, the case settled before details of this interesting arrangement came to light in discovery or other court filings, and it is perhaps too much to ask for questions to be asked in the nonexistent Congressional investigation of the practices of the securities class action bar.
For identifying Overlawyered as one of the top ten legal blogs. We’re invited to name our ten favorite. I’d be remiss if I didn’t identify Point of Law, our sister blog, but that seems poor sport. Here’s my ten, though, of course, Walter’s may differ:
- Drug and Device Law Blog: Beck and Herrmann do such a good job covering pharmaceutical litigation in detail that I’ve virtually stopped posting on the subject. It’s one of two blogs where I’d link to every single post they made if it didn’t quickly become redundant to do so.
- Insurance Coverage Blog. David Rossmiller’s blog is the other one that has occupied the field: he covers insurance litigation so thoroughly that it feels redundant for me to post on the subject, and he affirmatively breaks stories in Katrina litigation and the Scruggs contempt hearing. We’re glad to have been able to add David to Point of Law.
- The Volokh Conspiracy: An obvious choice. Intelligent discussion of the law by some of the nation’s top law professors, while fairly acknowledging opposing arguments. Is it wrong that I aspire to being a Conspirator?
- How Appealing; WSJ Law Blog; and Above the Law. Three more obvious choices for breaking news, but I read them daily, and I would be remiss if I didn’t mention them in my top ten.
- The 10b-5 Daily. Lyle Roberts provides excellent coverage of securities litigation issues.
- Ideoblog. I don’t always agree with Larry Ribstein (who also blogs at Point of Law) but his discussion and thoughts on corporate legal issues are always interesting.
- Legal Pad. That’s the Roger Parloff version; several blogs have similar names. One of my favorite legal journalists, and the original reporting done on this blog is top notch.
- Prettier Than Napoleon. My top ten has to have one non-obvious choice if it’s going to be at all interesting. Only a small portion of attorney Amber Taylor’s blog is about legal issues, but her daily posts are provocative, intriguing, and well-written, and the comments section community is surprisingly productive for a blog.
Update: My, this meme is widespread, we’re honored to also be selected by The Common Scold, What about clients?, and May it Please the Court. Eric Turkewitz also names us to his top ten, but I have to disagree with his characterization: Overlawyered is a pro-consumer blog, as excessive litigation hurts consumers. We criticize socially wasteful litigation whether it comes from big business or the traditional plaintiffs’ bar.
Via Lyle Roberts at 10b-5 Daily (Aug. 29), we learn of the latest advance in methods guaranteed to bring us a more ruthless legal profession: “Christopher Waddell, general counsel of the California State Teachers’ Retirement System, said that he uses both bounty and sliding-scale fees in order to ‘incentivize’ his outside counsel to go after personal assets. CalSTRS, the nation’s third-largest public pension fund, has promised its lawyers a 2.5 percent bounty, plus an undisclosed fee, in a pending suit against the former directors of WorldCom.” (Sue Reisinger, “Securities Fraud: Attorneys Are Receiving Bounties for Pursuing Officers and Directors”, Corporate Counsel, Aug. 24). For the reasons most other countries’ legal systems consider contingency fees for lawyers to be unethical, see Chapter 2 (“A Piece of the Action”) of The Litigation Explosion (PDF).
White-collar prosecutions, securities and accounting law and corporate governance in general have come in for much attention of late at our sister site. Lyle Roberts (no relation to John that we know of), who puts out the excellent securities law blog 10b-5 Daily, dropped by as a guest the other week to contribute posts on, inter alia, the record of the PSLRA and the Supreme Court’s history of dodging questions in this area. Ted Frank discusses the Bernie Ebbers sentence as well as a new NERA study on securities lawsuits, while Martin Grace, Jonathan Wilson and I all post on different aspects of the Sarbanes-Oxley law. I’ve also got brief items on Chris Cox as Bill Lerach’s nightmare nominee and on the much-discussed Larry Thompson memo laying out ground rules for corporate prosecutions at DOJ.
With comptroller Alan Hevesi in charge, the state of New York acted as lead plaintiff (via the New York State Common Retirement Fund) in the WorldCom securities case, but according to Forbes, the large settlement that resulted may not have been such a great deal for Hevesi’s client:
“Judging by a plaintiff expert’s own estimate of shareholder losses, New York’s claim of a $317 million hit would entitle it to 1.1% of the kitty, or a mere $11 million …. Hevesi’s suit cost New York’s pension fund by deflating the value of its investments in the banks it sued. The Hevesi fund owns stakes in J.P. Morgan, Citigroup and BofA. These three banks took aftertax charges totaling $3.2 billion for WorldCom settlement costs. The fund’s pro rata share of these losses, and those of smaller-fry defendants, totes up to $13 million.”
(Neil Weinberg, “Cui bono?”, Forbes, Apr. 25).
Hevesi’s campaign ties to the private lawyers who file these suits, which have come under scrutiny before (see May 14 and Dec. 10, 2004) are again a topic of criticism in parts of the press. Lyle Roberts of 10b-5 Daily (Apr. 13) rounds up the links, including a New York Sun editorial (“Hevesi by the letter”, Apr. 12).