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March 31, 2009 9:00 AM

The Am Law Litigation Daily: March 31, 2009

Posted by Alison Frankel

Law Firms / Legal Malpractice
Stanford Financial Exec Facing Criminal Charges Sues Proskauer for Malpractice

Considering that former Stanford Financial CIO Laura Pendergest-Holt doesn't have money to pay her lawyers, she's getting a lot of legal help. On Friday, Anthony Buzbee of Houston's Buzbee Law Firm filed a suit for Pendergest-Holt, accusing Proskauer Rose and partner Thomas Sjoblom of legal malpractice, professional negligence, and breach of fiduciary duty.

The suit claims that before and during her February 17, 2009, meeting with Securities and Exchange Commission investigators, Pendergest-Holt believed that Sjoblom was acting as her attorney. "She was never advised that the company's interests differed from hers, or that Sjoblom represented the company and not her, and that was such a huge conflict and could work to her detriment," Buzbee told The Am Law Daily's Zach Lowe in an e-mail response to questions. (Buzbee is not involved in Pendergest-Holt's criminal defense.)

And according to Buzbee, even when Sjoblom stated during Pendergest-Holt's testimony that he only represented her to the extent she was an officer of the company, "She didn't know what that meant," Buzbee said. "He didn't stop and advise her or do any of the things that you would expect in such a situation....At some points [during her testimony] he is coaching and instructing her, but at others he is not protecting her at all."

Pendergest-Holt's complaint alleges that Sjoblom had a conflict of interest: Unbeknownst to Holt, the night before he met with her to prepare her to testify before the SEC, "Sjoblom had solicited a multimillion-dollar retainer from Stanford to represent Stanford personally."

Proskauer Rose spokesperson Joshua Epstein sent the Litigation Daily an e-mail response to our request for comment: "We are reviewing the complaint and will respond in the appropriate forum."

We've reported on the complexities of Sjoblom's role in the SEC's investigation of Stanford Financial and its executives. For more details on his actions during Pendergest-Holt's testimony--which resulted in her arrest on criminal charges of lying to investigators--you can check out the two-part transcript here and here.

Proskauer didn't answer our question about who will be defending the firm, although our Am Law Daily colleague Lowe reports that it's James Cole at Bryan Cave, who confirmed the engagement but declines additional comment. But here's an interesting question: If, as Sjoblom seemed to say to the SEC, he didn't represent Pendergest-Holt in her personal capacity, does she have standing to sue him for legal malpractice? We're sure that's just one of the issues this tangled case will eventually have to address. Stay tuned.


Appellate / Product Liability / Mass Torts
Packed House for Supreme Court Asbestos Case

The lawyers arguing before the Supreme Court in Travelers Indemnity v. Bailey, which could have huge repercussions in the tort system, encountered a hot bench.
more


Securities
Rare Securities Class Action Trial Begins in Years-Old Subprime Case

Years before the phrase "toxic assets" became a cliche, the shareholders of a mortgage company called Household International filed a class action in Chicago federal district court, alleging that Household had engaged in "a massive predatory lending scheme" that inflated the company's financials. The trial in the case begins this week.
more


Product Liability / Mass Torts
For Trial Bar, It's Morning in America

Not long ago, trial lawyers were on the defensive in the nation's capital. Now they're making wish lists for legislation.
more


IP
TomTom, Meet BillBill: Dutch GPS Maker and Microsoft Settle Dueling Infringement Suits

Even for a case filed in the rocket docket of the Eastern District of Virginia, the settlement between Dutch GPS maker TomTom and Microsoft had to set a speed record.
more


Law Firms
Have We Turned the Corner? Some Litigation Firms Are Now Hiring Associates--but There's a Catch

For litigators willing to switch sides, there are employment opportunities.
more


Edited by Alison Frankel

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