Legal Ethics

Dorsey & Whitney Fires Partner as Insider Trading Probe Continues

A Canadian partner of Dorsey & Whitney has reportedly been fired by the Minneapolis-based law firm, as an insider trading probe to which the lawyer has been linked continues.

Gil Cornblum, the fired partner, was a law school colleague of business consultant Stan Grmovsek, one of three individuals who reportedly may have made $1.1 million by trading in the stock of resource companies shortly before they became takeover targets and their share prices shot up, according to the Star Tribune, a Minneapolis newspaper. Cornblum reportedly worked in the Toronto office of the 650-lawyer firm and was fired yesterday.

The Star-Tribune says the investigation concerns three deals, but the Globe and Mail reported yesterday that 11 Canadian deals, all involving takeovers of resource companies, are at issue, as discussed in an earlier post. The Globe and Mail reported today that Cornblum or Dorsey & Whitney provided legal advice to “at least eight companies involved in the deals.”

The insider trading investigation involves both the U.S. Securities and Exchange Commission and the Ontario Securities Commission in Canada.

In a written statement, Dorsey says it is fully cooperating with the SEC “regarding possible insider-trading activity on certain merger and acquisition transactions on which the firm served as legal counsel” and has “no reason to believe any other lawyer or staff member is implicated in these events,” the Star Tribune reports.

Cornblum is admitted to practice in both Ontario and New York, and is a graduate of Osgoode Hall Law School in Toronto, the National Law Journal reports.

Additional coverage:

Bloomberg: “Dorsey & Whitney Fires Partner After Trading Probe”

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