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In January, Julie Freese was one of the young associates at San Francisco’s Brobeck, Phleger & Harrison we wrote about in ” Still Golden.” Freese, we noted, was running her own deals, characteristic of the responsibility given to Brobeck associates during the dot-com boom. Like the stock market itself, Freese has since fallen to earth. The second-year M&A associate resigned from the firm’s Palo Alto, Calif., office in March in the wake of an insider trading investigation of Joel Mesplou, a Palo Alto stock trader. Mesplou made more than $400,000 after he learned privileged information from Freese about Sun Microsystems Inc.’s acquisition of Cobalt Networks Inc. After initially denying it, Mesplou recently admitted that he did, in fact, know of the deal from a Brobeck lawyer and has pleaded guilty to making false statements to the Securities and Exchange Commission in exchange for the recommended sentence of probation. He has settled civil insider-trading charges that were also brought against him. Freese — who is simply referred to as an associate at Brobeck in the court papers — has not been charged with anything. Her lawyer, Nanci Clarence of San Francisco’s Clarence & Snell, says Mesplou was already familiar with the possibility of the pending transaction when Freese unintentionally mentioned something about it. “She made an inadvertent statement while talking about the nature of her work,” says Clarence. “Someone pieced together what she said and capitalized on her mistake.” Clarence explains that her client had met Mesplou at a “very crowded party” last September. A couple of weeks later — after working grueling hours on the deal — Freese ran into Mesplou a second time and indirectly mentioned what was keeping her so busy, Clarence says. James Burns Jr., Brobeck’s managing partner, says that the firm learned of the investigation and Freese’s connection to it in mid-January, when Freese told the lead partner on the Sun-Cobalt transaction that she had been questioned by authorities. Soon afterward, when Freese was questioned further, she was placed on administrative leave according to firm policy. In March she voluntarily resigned. Brobeck does not have a position on whether Freese is at fault. Burns says that the firm only knows what it has heard from the U.S. Attorney’s office — namely that Mesplou received information regarding the deal from Freese. “What information? How it was told? We don’t know,” he says. Freese is taking a break before finding a new job while she continues to deal with the fallout, says Clarence. “It’s been a consuming couple of months,” she remarks. “There’s a lot of work to be done to get through this.”

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