The Manhattan District Attorney intends to ask for a stay of the Securities and Exchange Commission suit against former Dewey & LeBoeuf leaders while the criminal case proceeds, according to defense counsel in a letter to Southern District Judge Valerie Caproni.
Defense attorneys in an April 17 letter to Caproni pointed out there are parallel criminal proceedings in Manhattan Supreme Court against the same defendants who are in the SEC case.
Among the five defendants in the SEC suit, three have been indicted and have pleaded not guilty, including former chairman Steven Davis, former executive director Stephen DiCarmine and former chief financial officer Joel Sanders. Two of the SEC defendants—ex-finance director Francis Canellas and ex-controller Thomas Mullikin—have pleaded guilty in state court and might become witnesses at trial time.
In the letter, Kathryn Gebert, a Bryan Cave associate and attorney for DiCarmine, said, “[I]t is our understanding that the District Attorney’s Office, either directly or through the Securities & Exchange Commission, intends to move to stay” the SEC case.
Gebert said the SEC defendants would not oppose a stay request and the parties would like to adjourn a May pretrial conference until after the stay request has been made.
The SEC, in a suit brought in early March, claims the five Dewey defendants “orchestrated and executed a bold and long-running accounting fraud intended to conceal the firm’s precarious financial condition.”
The defendants are seeking an extension to answer the SEC’s complaint.
A spokeswoman for the district attorney’s office declined to comment, as did an SEC spokeswoman.