A daily look at legal news and the business of law:
SEC Alleges Insider Trading on Potash Buyout Offer
When BHP Billiton (BHP) made its offer to acquire Potash Corp. (POT), two residents of Madrid, Spain, made $1.1 million trading ahead of the announcement, the Securities and Exchange Commission claims. According to the SEC, the men purchased out-of-the-money call options for Potash shares, cheaply, knowing the at-that-point unannounced tender offer would cause the Potash share price to spike above the options' price, enabling them to cash the options out for a tidy profit, which they did. In response the SEC has not only sued, it has also frozen $1.1 million of their assets.
FedEx Tries to Fend Off Cuomo
The Wall Street Journal reports that FedEx is suing New York Attorney General and gubernatorial candidate Andrew Cuomo, rather than complying with a subpoena from Cuomo's office. Cuomo is trying to investigate FedEx's liability limits and insurance for valuable items, but FedEx says it's an airline, and thus subject to federal regulation only. FedEx wants an injunction shutting the investigation down.
Stem Cell Decision Will Be Appealed
The Justice Department has announced that it will appeal the ruling by Chief Judge Royce C. Lamberth of the Washington, D.C., Federal District Court halting all federal financing of embryonic stem cell research, The New York Times reports.
And in the Business of Law
• Prestigious firm Paul Weiss and New Jersey top dog Lowenstein Sandler were just hit with a $2 million bill for bringing frivolous litigation on behalf of billionaire Ron Perelman and his daughter against his ex-in-laws, reports Am Law Litigation Daily. The bill covered their opponents' legal fees. In awarding the fees, the judge noted that the firms seem unrepentant, particularly Paul Weiss.
• Above the Law reports the legal market is so bad that UCLA -- a highly ranked law school -- is offering a chauffeuring position to its students. Admittedly it could be a fabulous networking opportunity for a wannabe entertainment lawyer: The person being driven is an alum who is an of-counsel entertainment lawyer at a firm, and he has promised to discuss his cases and what life is like as a lawyer. Moreover, the job pays an above minimum wage $12 an hour, which is more than most people working to break into the entertainment industry get.
• The ABA Journal reports that California Attorney General (and gubernatorial candidate) Jerry Brown is suing the "tax lady" Roni Deutch. Allegedly, rather than helping her clients reduce their tax bills as advertised -- and she advertises a success rate "grossly" in excess of her true one -- Deutch commonly increases her clients' tax liability by placing them in an endless loop of duplicate document requests. Each document request generates fees for her and delays the client's payment of taxes. After enough delays, the IRS levies fines. The upshot: Her clients pay inflated fees, taxes, and fines. Brown is seeking $33.9 million in restitution and fees.
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