Posted Mar 15, 2010 07:01 pm CDT
A former partner of McGuireWoods pleaded guilty today in federal court in New York to one count of securities fraud and one count of conspiracy to commit securities fraud concerning the sale of unregistered shares issued by his clients.
Louis Zehill, 44, allegedly purchased the securities as private placements through two entities he and his wife controlled from their Florida home, and then resold the shares in before they were registered, Bloomberg reported. The article relies on information provided in a civil Securities and Exchange Commission complaint concerning the so-called PIPE (private investment in public equity) transactions.
The Bloomberg article says Zehil said today that no other McGuireWoods partners were involved, but said he was assisted by an unidentified McGuireWoods associate who at Zehil’s direction sent opinion letters containing misrepresentations to transfer agents.
The firm apparently did not comment about Zehil’s plea, but said when he was arrested in 2007 that it notified clients, alerted the SEC and demanded his resignation as soon as it was aware of the situation, according to the Wall Street Journal (sub. req.).
Zehil faces up to 20 years on the securities fraud count and five years on the conspiracy count when he is sentenced in July.
Earlier related coverage:
ABAJournal.com: “Client Sues McGuireWoods re Ex-Partner’s Claimed $17M Trading Scheme”