Law Firms

Two BigLaw firms face $1.8B suit by receiver who alleges they aided Ponzi schemer

A receiver for the investment firm founded by convicted Ponzi schemer R. Allen Stanford has sued Proskauer Rose, Chadbourne & Parke and a former partner who worked at the law firms.

The $1.8 billion suit by receiver Ralph Janvey (PDF) alleges that former partner Thomas Sjoblom aided Stanford’s sales of phony certificates of deposit and then thwarted an investigation by the Securities and Exchange Commission, Bloomberg News and Reuters report. The law firms are accused of failing to properly supervise Sjoblom.

A conspiracy to obstruct the SEC investigation began in the summer of 2005, Janvey says in the suit, filed Thursday in Dallas federal court. “Sjoblom, who had 20 years of experience as a senior lawyer in the SEC’s Enforcement Division, spent the next four years delaying and obstructing the investigation by lying to the SEC,” Janvey wrote.

The suit accuses Sjoblom of falsely asserting that he had personally confirmed that Stanford Financial was not a Ponzi scheme. It also claims he told the company to hide documents from the SEC.

Reuters published comments from both firms.

A statement by Poskauer Rose said: “The claims asserted against the firm are completely without merit. We will address them in the appropriate forum.”

A spokesperson for Chadbourne & Parke told the wire service: “These are the same allegations that we’ve seen previously. There is nothing new here. Prior litigation against our firm regarding Stanford was dismissed, and we do not believe this latest attempt should be any more successful.”

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