Former BigLaw partner agrees to suspension after insider trading conviction
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A former partner at two large law firms has agreed to a three-year suspension after his conviction for insider trading.
The suspension for Robert M. Schulman still must be approved by the District of Columbia Court of Appeals, the National Law Journal reports. Schulman was a former Washington, D.C., intellectual property litigation partner at Hunton & Williams and Arent Fox.
An ad hoc hearing committee of the court’s board on professional responsibility recommended the negotiated discipline in a June 16 report.
The suspension would be retroactive to June 28, 2018, which would allow Schulman to seek reinstatement in about a year. He will have to show fitness to practice law to be reinstated.
Schulman was convicted in 2017 for tipping his investment adviser about a pending pharmaceutical merger when he was an intellectual property partner at Hunton & Williams. He later became a partner at Arent Fox.
Schulman was sentenced to three years of probation in the criminal case, fined $50,000 and ordered to forfeit about $15,500. He was also required to serve 2,000 hours of community service.
Schulman tipped the adviser about pharmaceutical company Pfizer’s plan to buy King Pharmaceuticals in a roundabout way during a 2010 dinner.
Schulman told the investment adviser that he had to give his files to someone at Hunton & Williams for a meeting with Pfizer, then stated, “You know, it would be nice to be King for a day,” the adviser testified.
The investment adviser was accused of buying stock for himself, Schulman and other clients. Schulman had told the National Law Journal that he was unaware that the adviser had made trades on his behalf. Schulman’s arrangement with the adviser allowed stock trades on his behalf without seeking permission.
The ethics hearing committee found no moral turpitude by Schulman. Nor was he seeking a substantial financial benefit, the committee said.
While Schulman’s broker did invest on the information for Schulman’s benefit, and Schulman admitted he intended for him to do so, “the return was a relatively small amount, approximately $15,500, and the investments were made in the context of [Schulman’s] retirement account rather than in a manner calculated to bring him immediate benefit,” the hearing committee said.
“These circumstances take this case out of the norm of schemes to defraud and may be considered exceptional,” the hearing committee said.
It is the only known case of misconduct during more than 30 years of law practice by Schulman and did not occur as part of a pattern of misconduct, according to the committee.
In a statement to the ABA Journal, Schulman said he was grateful that the hearing committee and a case manager “expended the effort to look beneath the surface into the specifics of my case.”
“The patent office has likewise handled this matter in a very professional manner,” he said. “Should the D.C. Court of Appeals agree to the settlement, I do not know that I would practice again, though it would be nice to have that as an option.
“Even after the passage of more than three years since the verdict, I still wrestle with what has happened. But it did happen. I have tried to learn and grow from it and not become embittered. I am grateful for the support of family and friends who saw me through this. There are a lot of great people, both clients and former colleagues, whom I miss dearly. I am still in touch with many of them.
“I’ve tried to use my extra time in a meaningful way. I’ve become a master gardener and am pursuing a master’s in agriculture and life sciences from Virginia Tech. I’ve also been teaching ESL classes.
“At this point, I’m enjoying my vegetable gardening, including a lot of volunteering, my grandchildren and, with any luck, some baseball soon. There is in fact life after patent law after all!”
Updated June 19 at 3:03 p.m. to include the statement from Schulman.