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May 20, 2009 12:26 PM

Dorsey, Ex-McDermott Lawyers Facing Insider Trading Charges

Posted by Brian Baxter

UPDATE: 6:00 p.m., May 20. Additional information has been added to the fifth paragraph of this story. Dorsey & Whitney has released a statement that Rimmington has been fired from the firm.

Britain's Financial Services Authority (FSA) is set to charge current Dorsey & Whitney corporate partner Andrew Rimmington and former McDermott Will & Emery corporate partner Michael McFall with insider trading, reports Legal Week, an Am Law Daily sibling publication.

News of the FSA's investigation was first reported by Bloomberg.

The charges relate to the $569 million acquisition of Manchester-based NeuTec Pharma by Swiss pharmaceutical giant Novartis in June 2006. Peter King, a former financial director at NeuTec Pharma, is also the subject of the FSA's inquiry.

Spokespersons for both Dorsey and McDermott told Legal Week that neither firm advised on that deal.

A bio of Rimmington on Dorsey's Web site lists him as a cross-border M&A lawyer; Toledo-based auto parts manufacturer Dana Corporation is a major client. Rimmington is the second Dorsey partner within the past year to be accused of insider trading. The firm fired Gil Cornblum, who worked in Dorsey's Toronto office, last May amidst an SEC insider trading investigation.

Legal Week reports that Ian Mason of London's Barlow Lyde & Gilbert is representing Rimmington. Mason is a former head of the wholesale group in the FSA's enforcement division.

McFall spent four years as a corporate partner in McDermott's U.K. practice before leaving in January of this year. He previously worked in Dorsey's London office.

"This is going to be a very high-profile case," white-collar criminal defense lawyer David Corker of London's Corker Binning told Bloomberg. "Bearing in mind the damage that it will do to the lawyers and their firms, I hope that the FSA are convinced of the strength of their case and [are] not just doing it [as] a deterrent."

The FSA has been sharpening its regulatory teeth in recent months, successfully prosecuting former TTP Communications general counsel Christopher McQuoid on insider-trading charges earlier this year.

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