US Claims Misleading Statements by ‘Attorney A’; Is Proskauer Lawyer at Risk?
Updated: A plea agreement reached Thursday between the former chief financial officer of Stanford Financial Group and the federal government claims an unidentified outside lawyer for the bank misled investigators about billionaire financier R. Allen Stanford’s knowledge of his bank operations and the legitimacy of the enterprise.
The agreement alleges a lawyer identified as “Outside Attorney A” falsely informed officials of the Securities and Exchange Commission at a January meeting that an Antigua affiliate of Stanford was not a criminal enterprise and made misleading statements about Stanford’s knowledge of his bank’s operations. The statements delayed depositions of Stanford and Davis, according to the agreement.
The Wall Street Journal Law Blog says “Attorney A” is Thomas Sjoblom of Proskauer Rose, who quit representing the bank in February after disavowing everything he had told SEC officials about the Antigua affiliate under a provision of the Sarbanes-Oxley Act allowing for “noisy withdrawals.”
The development “provided an indication that they may be setting their sights on Sjoblom,” the Law Blog says.
Attorney A was first retained before August 2005 to represent the Antigua affiliate in an SEC investigation of its sales practices. It wasn’t until late 2008 that the lawyer learned investors had not been informed of a secret third tier of the banks’ investments, amounting to about 80 percent of the bank’s portfolio, according to the plea agreement (PDF posted by the Houston Chronicle).
Former CFO James Davis pleaded guilty Thursday to fraud and conspiracy in the alleged $7 billion fraud involving certificates of deposit at the Antigua affiliate. Meanwhile, Stanford was hospitalized Thursday for an irregular heartbeat and missed a court hearing to determine which lawyers will represent him.
The agreement says Davis failed to disclose that the investment portfolio of the Antigua bank included grossly overvalued property and $2 billion in unsecured personal loans to Stanford. It also alleges the payment of $200,000 in bribes and Super Bowl tickets worth $8,000 to an Antigua banking regulator.
Sjoblom did not respond to an ABA Journal e-mail request for comment.
Prior coverage:
ABAJournal.com: “Stanford Exec Sues Proskauer Partner, Says He Put Her in SEC Frying Pan”
ABAJournal.com: “Stanford Official Charged With Lying to SEC Testified Without Her Own Lawyer”
ABAJournal.com: “Sarbanes-Oxley Governed Lawyer’s ‘Noisy Withdrawal’ in Stanford Case”
ABAJournal.com: “Proskauer Lawyer Raised ‘Red Flag’ in Billionaire Probe”
Updated at 5:10 p.m. to correct alleged work done by Outside Attorney A. Updated on Aug. 28 to include information from the Wall Street Journal Law Blog.
