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Securities Law

Ex Jenkens Partner Named in Fraud Case

Posted Oct 19, 2007 4:34 PM CDT
By Martha Neil

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A New York partner of Baker & McKenzie has been indicted in a federal securities fraud case involving alleged corporate kickbacks, along with executives and two individual investors.

Attorney Martin Weisberg and the five other defendants "face a variety of charges, including conspiracy, securities fraud and money laundering," reports the Wall Street Journal (sub. req.). A separate civil case also is being pursued by the Securities and Exchange Commission.

"I'm confident that Mr. Weisberg's conduct here was only as a lawyer and that the suggestion that he committed criminal acts will be disproven," says his lawyer, Elkan Abramowitz. "We believe the charges result from a misunderstanding of the nature of the transactions and we look forward to full vindication."

Weisberg, 57, allegedly participated in a scheme with the other defendants to defraud stockholders of two companies, Xybernaut Corp. and Ramp Corp., by issuing discounted shares in so-called PIPEs (private investment in public equity transactions) to the two defendant investors. The investors eventually profited as a result, for which they paid the other defendants kickbacks, prosecutors contend.

At the time of the transactions at issue, between 2001 and 2005, Weisberg was a partner at Jenkens and Gilchrist, which has since dissolved. In April 2005 he joined Troutman Sanders as a partner, the newspaper writes, "but was terminated by the firm a month later, according to the SEC's complaint."

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