The Firms

August 28, 2009 4:19 PM

Proskauer, Sjoblom Hit in Class Action

Posted by Zach Lowe

This just in: Investors who lost money in Allen Stanford's $7 billion (at least) Ponzi scheme have filed a class action against Proskauer Rose and partner Thomas Sjoblom, according to The National Law Journal, an Am Law Daily sibling publication. 

The suit, filed late Thursday in federal district court in Dallas, Texas, accuses the firm of conspiring with Stanford to perpetuate the massive fraud that centered around certificates of deposit Stanford issued from his banking headquarters in Antigua. As has been well-documented both here and elsewhere, Stanford and several of his executives stand accused of providing investors with falsified reports of profits and lying to them about the nature of Stanford's investments (which were mostly illiquid, it turns out). 

The suit caps a bad couple of days for Proskauer and Sjoblom, who has gone silent since the SEC accused Stanford of fraud late last year. On Thursday, Stanford's chief financial officer, James Davis, pleaded guilty to fraud and referred often to Sjoblom in his plea agreement. In that document, Davis says Sjoblom (identified as "Outside Lawyer A") allegedly lied to the SEC about which Stanford executives had knowledge of the bank's financial operations, and then had other Stanford execs provide false testimony to the agency. 

One of those executives--former Stanford chief investment officer Laura Pendergest-Holt, has already sued Sjoblom, accusing the Proskauer partner of failing to adequately prepare her for testifying before SEC lawyers. Sjoblom at the time was representing Stanford and Stanford's company, and the complaint accuses Sjoblom of failing to detail his potential legal conflicts to Pendergest-Holt--an issue we wrote quite a bit about at the time.

Proskauer said the new class action filed against the firm has "no basis whatsoever," and that the firm played no role in Stanford's alleged frauds, according to the NLJ.

Sjoblom is represented by Bryan Cave's James Cole. 

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