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Dorsey & Whitney Fires Partner in Toronto Amidst Insider Trading Allegations
The firm believes partner Gil Cornblum acted alone
The National Law Journal
May 09, 2008
Minneapolis-based Dorsey & Whitney fired a partner in Toronto on Thursday in connection with an investigation of alleged insider trading.
In a statement issued Thursday afternoon, the firm said it is cooperating fully with inquires made by the Securities and Exchange Commission regarding possible insider trading involving mergers and acquisitions transactions on which the firm served as legal counsel.
The firm became aware of the inquiry on April 24 and began its own internal investigation, according to the statement, which was e-mailed from Julie Snow-Samanant, the firm's director of marketing and business development.
"In connection with these regulatory inquiries and its own investigation, the Policy Committee of Dorsey & Whitney today terminated a partner in its Toronto office," read a part of the statement. "The Firm has no reason to believe any other lawyer or staff member is implicated in these events." Gil I. Cornblum was the lawyer terminated, according to Larry Splett, the firm's director of global communications.
Cornblum was admitted to practice in Ontario and New York in 1996 and is a graduate of Osgoode Hall Law School, a highly regarded Toronto law school.
The school lists him as a speaker during a 2006 continuing legal education conference on securities law.
Cornblum's profile was not available on the firm's Web site Thursday. But a cached version of the site -- which captures recent Web site data -- states he was a partner in corporate, mergers and acquisitions practice groups who has represented issuers, underwriters, lenders and investors in numerous debt, public and private equity securities offerings, hedge and venture capital fund transactions and in mergers and acquisitions.
Cornblum could not be reached Thursday afternoon.
A SEC spokesman said the commission cannot confirm or deny, or discuss any ongoing investigations. A spokeswoman for the Ontario Securities Commission, which is also investigating, did not return two requests for comment on Thursday, but a spokesman for Ontario's Ministry of the Attorney General confirmed the action was filed.
The allegations involve Toronto business consultant Stan Grmovsek and claims he profited about $1 million by trading companies before they were involved in mergers and acquisitions that resulted in higher prices. Dorsey & Whitney was involved as counsel in some of these transactions.
Joseph Groia of Toronto's Groia & Company, who is representing Grmovsek, could not be reached for comment Thursday.
In its statement, Dorsey & Whitney talked about the importance of protecting clients' information.
"Dorsey & Whitney has clear and firm policies regarding the protection of clients' confidential information," Tom Tinkham, the firm's chief administrative partner, said in the statement. "We take these policies very seriously and enforce them strictly at all levels of the organization. Our commitment to these policies and their enforcement is the reason for the actions taken by the Policy Committee."
