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MERRILL LYNCH WINS SUIT OVER 401(K) PICKS NEW YORK — Merrill Lynch won a major round Tuesday in the ongoing ERISA litigation arising from WorldCom’s collapse when a federal judge ruled in its favor on a summary judgment motion. Southern District of New York Judge Denise Cote, who is also presiding over WorldCom’s securities class action cases, held that as a “directed trustee” under ERISA, Merrill Lynch’s fiduciary duties were limited in nature and that its decision not to block investment in WorldCom stock by the company’s 401(k) participants did not amount to a breach of its fiduciary duties. The decision, In re WorldCom ERISA Litigation, 02 Civ. 4816, is one of many class actions filed in the wake of WorldCom’s 2002 bankruptcy. The former telecommunications giant engaged in an $11 billion accounting fraud by overstating revenues and hiding expenses in an effort to keep up with investor expectations. When news of the overstatement became public, the company quickly fell into bankruptcy. It emerged last April under its former name, MCI. Several former executives pleaded guilty to securities fraud. WorldCom’s former chief executive, Bernard Ebbers, is being tried on charges of securities fraud and related claims before Southern District Judge Barbara Jones. The plaintiffs in the case before Judge Cote, a class of employees who participated in WorldCom’s 401(k) plan, accused Merrill Lynch of breaching its fiduciary duty as a trustee administering the retirement plan. — New York Law Journal N.Y. DEFENDER OFFICE IN FUNDING JEOPARDY NEW YORK — New York Gov. George Pataki called for the defunding of the Capital Defender Office in his budget released last month unless the Legislature repairs New York’s death penalty law by June 30. The governor’s budget proposed $12.3 million for the Capital Defender Office, but restricted use of the money to “no more than 30 percent” if the death penalty is not restored by June 30, the close of the first quarter of the state’s fiscal year. The $12.3 million budgeted for the office is several hundreds of thousands of dollars less than the current budget. The Capital Defender Office employs 60 lawyers in New York City, Albany and Rochester. Kevin Doyle, the head of the Capital Defender Office, declined to comment. The office, established by the 1995 legislation that reinstated the death penalty, represents defendants accused of capital crimes who are unable to afford counsel. The New York Court of Appeals put the law on hold last summer when it found unconstitutional the instruction judges were required to give juries if they deadlocked over whether to sentence a defendant to death. — New York Law Journal

New Partners

DLA PIPER NAMES 35 TO PARTNERSHIP DLA Piper Rudnick Gray Cary promoted 35 attorneys to the rank of partner in what is the first class of new partners since the 2,700-lawyer firm’s three-way merger. Two partners were named in the firm’s East Palo Alto office. William Goldman, 32, an attorney in the intellectual property practice group, earned his J.D. in 1998 from Syracuse University. Brent Yamashita, 32, also an IP lawyer, earned his J.D. in 1997 from Boalt Hall School of Law. The promotions were effective Jan. 1. Gray Cary elevated 20 partners in 2004, more than twice the number promoted the previous year. — Marie-Anne Hogarth

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