A small group of Louisiana officials and contingent-fee lawyers picked a multibillion-dollar fight with the oil and gas industry on July 24. The Southeast Louisiana Flood Protection Authority – East alleged that a network of oil and gas pipelines have nearly destroyed the wetlands that naturally protect New Orleans from violent weather and storm surges. The defendants are more than 100 oil and gas companies, including Exxon Mobil Corp., BP PLC and Chevron Corp.
HEDGE FUND CHARGED
The hedge fund operated by embattled billionaire Steven Cohen was hit with white-collar criminal charges on July 25 that accused the fund of making hundreds of millions of dollars illegally, while a related government lawsuit said insider trading was pervasive and unprecedented at the firm. SAC Capital Advisors L.P. was charged in federal court in New York with wire fraud and four counts of securities fraud; prosecutors allege the crimes were carried out from 1999 through at least 2010.
SECURITIES ACTIONS DECLINE
Securities class action filings during the first half of 2013 dipped by 16 percent compared with the same period in 2012, continuing last year's downward trend. There were 74 new cases, compared with 88 in the comparable period of 2012. Cornerstone Research and the Stanford Law School Securities Class Action Clearinghouse published the data on July 24. Market capitalization losses were historically low during the period — $113 billion, 65 percent below the $326 billion six-month average from 1997 to 2012.
A federal appeals court has opted to stay out of a dispute over whether a Boston federal prosecutor committed a professional breach by withholding exculpatory evidence in a racketeering trial. A special panel comprising three U.S. district court judges decided in 2011 not to impose sanctions on assistant U.S. attorney Jeffrey Auerhahn. The Massachusetts Office of the Bar Counsel appealed. But the U.S. Court of Appeals for the First Circuit ruled on July 22 that the bar lacked standing to bring the appeal.
RUTGERS GC CRITICIZED
An investigative report on Rutgers University's botched discipline and firing of basketball coach Mike Rice pointed to missteps by the school's top in-house lawyer. Former senior vice president and interim general counsel John Wolf, who resigned amid the scandal, was responsible for keeping quiet a disgruntled ex-employee's request for video of Rice's practices, according to the report, made public on July 22. "It appears that, upon the instruction of Wolf (whose intention was to protect the University), Rutgers' usual policies and procedures were not followed when the DVDs were released," Stephen Robinson and Christopher Gunther, partners at Skadden, Arps, Slate, Meagher & Flom, said in their report.
CHINA PROBES GLAXO
Ropes & Gray will lead an internal investigation at British pharmaceutical giant GlaxoSmithKline PLC, following Chinese government allegations that the company's China operations paid almost $500 million in bribes to help boost sales. The company has admitted that some of Chinese employees may have broken Chinese laws. China's Ministry of Public Security has said it believes Glaxo paid bribes to doctors and other officials to get them to use its products over those of competitors. Chinese police have detained four Chinese Glaxo executives, including the company's China legal affairs director Zhao Hongyan.
Arthur Makadon, a hard-nosed litigator who helped transform Philadelphia-based Ballard Spahr into a national presence during a decade as chairman, has died after a short illness. Makadon, 70, checked into University of Pennsylvania Hospital about a week before his death and learned soon after that he had late-stage lung cancer. He died early on July 24. Makadon served as chairman of Ballard Spahr from 2002 to 2011 but continued an active litigation practice.