Ark. Lawyer in Hot Water Over $9M Settlement-Funds Shortfall
Posted May 8, 2009 6:37 PM CDT
By Martha Neil
A prominent Arkansas plaintiffs securities lawyer has reportedly come up short on about $9.3 million that was supposed to be paid last month from a fund he controls to clients who made a $65.8 million settlement with BISYS Group Inc. in 2006.
Gene Cauley told co-counsel in the case last month that he can't produce the money, and his lawyer told U.S. District Judge Jed Rakoff at an April 20 hearing in New York City that the money is "presently unavailable," reports the Wall Street Journal Law Blog. Law Blog provides a link to the hearing transcript (PDF).
Cauley's lawyer, John Wesley Hall of Little Rock, declined at the hearing to provide details about why the money can't be liquidated, citing his client's privilege against self-incrimination. It is supposed to be invested in U.S. Treasury bonds, according to Rakoff.
“We are working to be able to find the money and pay it in 90 days,” Hall says, apparently in an interview with Law Blog. “Mr. Cauley fully expects to make everyone 100 percent whole.”
A representative of the local U.S. Attorney's office was present at the April 20 hearing, and Rakoff indicates in the transcript that he expects to refer the issue of the funds shortfall to a Southern District of New York grievance committee. Hall tells Law Blog that federal authorities are presently investigating.