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March 30, 2009 1:17 PM

Stanford Exec Sues Proskauer Partner, Firm

Posted by Zach Lowe

This is one that you could see coming: The former chief investment officer for the Stanford Financial Group--who stands charged with lying to Securities and Exchange Commission lawyers--has filed suit against the Proskauer Rose partner, Thomas Sjoblom, who prepped her for that meeting with the SEC and accompanied her there, according to The Am Law Litigation Daily, our sibling blog.

The complaint focuses on a topic we wrote a lot about when the Stanford news first broke: the inherent difficulties that arise when a lawyer representing the company also accompanies an individual employee before federal investigators. Ethics experts and white-collar gurus told us that the investment officer, Laura Pendergest-Holt, should have had her own lawyer, and the new complaint says that Sjoblom never adequately explained the conflicts that the situation presented. 

"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," Pendergest-Holt's new attorney, Anthony Buzbee of the Buzbee Law Firm in Houston, wrote in an e-mail to The Am Law Daily. The suit seeks unspecified damages, including punitive damages. (Pendergest-Holt's lawyers have said she is not guilty of lying to investigators.)

James Cole of
Bryan Cave confirms that he's representing Sjoblom but declined to comment further. (Cole, you'll remember from last week, is the court-appointed lawyer who has been monitoring the goings-on at AIG since 2005 under the terms of a deferred prosecution agreement.)

As we've written before, Sjoblom repeated several times during questioning that he was representing Pendergest-Holt only to the extent that he was representing the company of which she was an officer. Buzbee told us that Pendergest-Holt "didn't understand what that meant," and that while Sjoblom helped her at times during the testimony, at other times "he is not protecting her at all."

One other interesting point our colleague Alison Frankel points out: The new complaint says that on the night before Sjoblom met with Pendergest-Holt to prepare for the SEC meeting, Sjoblom "had solicited a multimillion [dollar] retainer to represent R. Allen Stanford personally."

Sjoblom hasn't responded to messages, and a spokesman for Proskauer told the Litigation Daily the firm is reviewing the complaint. Stay tuned.


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