|  | | 2007 News and Press Releases | | |
HEADLINE NEWS:
Corporate Attorneys Split on Whether Partner's Refco Indictment Is a Warning for Others
Anthony Lin - New York Law Journal
Law.com. December 20, 2007
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EXCERPT: Has the indictment Tuesday of Mayer Brown partner Joseph P. Collins sent "a chill down the spine" of transactional lawyers everywhere, as Collins' defense lawyer said it should? "It's definitely a wake-up call," said Mark S. Vecchio, a corporate partner in the New York office of Venable. "I'm sure a lot of lawyers read about this in the morning papers and said, 'Oh my God.'" Collins was indicted for allegedly helping executives at commodities brokerage Refco Inc. hide massive losses from investors. When those losses subsequently came to light, Refco was forced to declare bankruptcy. In a statement Tuesday, Mayer Brown said Collins had been put on leave but that the firm stood by its work for Refco. Four Refco executives, including CEO Philip Bennett, were also indicted. Wednesday, one of the executives, Refco Capital Markets President Santo Maggio, pleaded guilty to securities fraud and conspiracy charges and agreed to cooperate in the case. Since Enron and the savings and loan crisis before that, corporate lawyers have been on the defensive about what responsibility they have, if any, for the misdeeds of their clients. Many have argued that even experienced lawyers cannot be expected to detect fraud in a complex web of transactions. "If he was just careless, there's a hell of a chill running down my spine about this," said the head of one New York firm who asked to remain unnamed. Another prominent corporate lawyer, who also asked to remain unnamed, said the case would be watched closely in the darkening economic climate. "When the economy takes a hit, there is a tendency to look for scapegoats to be taken out and shot," he said. But most of the lawyers who spoke to the Law Journal on Wednesday are not ready to rally around Collins. Citing the damning report of the Refco bankruptcy examiner, they noted that it was indeed possible that he crossed a line in the course of his representation. "He may just be a bad apple," said Vecchio. |
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