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JONES, DAY TO FACE FRAUD ALLEGATIONS Jones Day can’t avoid its unwanted day in court. On Wednesday, the California Supreme Court refused to review a ruling that ordered the mega-firm to face fraud allegations in Los Angeles County Superior Court. Justice Ming Chin cast the lone vote to hear the case. Jones Day was sued by Frank Vega, a 23 percent shareholder in Monsterbook.com, a now-defunct online directory company that was acquired by Transmedia Asia Pacific Inc. Vega claims he lost $3.45 million in stock when Jones Day, which represented Transmedia, allegedly hid the existence of so-called “toxic” stock provisions within the terms of the third-party financial investments. Jones Day had argued that as counsel for an adverse party in the deal, it had no duty to disclose the terms of a third-party investment contract. In its August ruling, L.A.’s Second District Court of Appeal held that Vega had made a viable fraud claim. Toxic stock financing, the court noted, is a “desperate and last resort of financing for a struggling company” that ends up in bankruptcy 95 percent of the time. The case is Vega v. Jones, Day, Reavis & Pogue, S127783. — Mike McKee FORMER GC PLEADS GUILTY TO TAX CHARGE NEW YORK — The former general counsel of Long Island-based Symbol Technologies, Leonard Goldner, pleaded guilty Wednesday to conspiring to obstruct the collection of his and other executives’ taxes. The company has been accused by the Eastern District of New York U.S. attorney’s office of falsifying its financial statements. Goldner’s crime, however, related to his and others’ underpaying federal taxes after exercising stock options. Under the terms of a plea agreement, Goldner faces up to five years’ imprisonment and a maximum fine of $250,000. He also will forfeit $2 million he gained through his crime. Goldner is the sixth executive at Symbol to plead guilty since an investigation began in 2001, when the government received an anonymous tip. His plea before U.S. Magistrate Judge William Wall came a month after a plea to securities fraud and obstruction of justice by former Computer Associates General Counsel Steven Woghin. The U.S. attorney’s office in Brooklyn prosecuted both cases. Goldner was indicted with seven other executives at Symbol Technologies. The 25-count indictment, sought by Eastern District U.S. Attorney Roslynn Mauskopf in June, charged company leaders with accounting and securities fraud. Based in Holtsville, Long Island, the company is among the leading developers of wireless and mobile computing and bar code reading devices with more than 5,000 employees in 92 offices worldwide. Last year, its revenues topped $1.5 billion. The executives allegedly rigged financial statements through a variety of accounting schemes to match investor expectations. In all, the government claims, executives overstated pre-tax earnings by $530 million from 1998 to 2003. In June, Symbol Technologies settled civil suits with the Securities and Exchange Commission and class action cases for $139 million. — New York Law Journal

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