As Second Circuit Holds Citi Case, Rakoff Slams the SEC

The SEC and U.S. District Judge Jed Rakoff seem to be locked in a game of one-upmanship. Today, the SEC asked a federal appeals court to halt its securities fraud lawsuit against Citigroup. The case seemed destined to end in a $285 million settlement until Rakoff rejected it in November, saying he couldn’t sign off on an agreement without any “proven or admitted facts.”

The agency on Tuesday petitioned the U.S. Court of Appeals for the Second Circuit to put the breaks on the case while it pursues its appeal of Rakoff’s decision, which, according to SEC enforcement chief Robert Khuzami, was arrived at through plain old “legal error.”  The Second Circuit is also considering the SEC’s appeal.

The court answered later in the day with one-paragraph order saying that a “motions panel” would review the SEC’s request for a stay on Jan. 17. The panel also will consider an SEC request that the court review Judge Rakoff’s decision on an expedited basis.

Seventy-eight seconds later, according to Reuters, an order by Rakoff went up. The SEC had also placed a request with him to delay the case while the agency pursues its appeal.

Rakoff, of course,  declined.

In fact, he reckoned the SEC committed a pretty serious error of its own — to wit, the agency doesn’t have a legal basis for an appeal in the first place, he said. . .

SEC Seeks Emergency Hold On Citi Suit

Our colleague, Andrew Ackerman, in Washington D.C. writes this dispatch about the latest development in the SEC’s proposed $285 million settlement with Citigroup over a mortgage bond deal.

The Securities and Exchange Commission on Tuesday asked a federal appeals court to place an emergency hold on the agency’s lawsuit against Citigroup Inc. while the court weighs an appeal of the SEC’s proposed $285 million settlement with the bank.

SEC officials filed the request . . . . .

High Court Has Busy Start to 2012

Like most of Washington, the Supreme Court is quiet this week, but it kicks off 2012 with a trio of politically sensitive cases including what may be the final word on whether broadcasters can be fined for “fleeting expletives” like U2 singer Bono’s use of the f-word on national television in 2003.

On its first argument day of 2012, Jan. 9, the court is taking up a late addition from Texas, weighing whether an interim redistricting map for Texas drawn by a lower court can stand. Texas says the lower court improperly ignored the map drawn by the state legislature. This is the initial battle  . . . . .

White-Collar Defense Pioneer Remembered

The death of white-collar defense pioneer Robert G. Morvillo over the weekend prompted a number of reflections on Morvillo’s big personality and the role he played in opening up an area of legal practice once disdained by white-shoe law firms.

A skilled legal tactician with a deeply-held sense of right and wrong, Morvillo “really understood people,” Elkan Abramowitz, his longtime friend and principal at Morvillo, Abramowitz, Grand, Iason, Anello & Bohrer, told Law Blog on Tuesday. “He was a very passionate advocate. If he believed in something, you would know it. He certainly made himself heard.”

One reason Morvillo embraced white-collar defense work –at a time when few firms took on such cases—was because it allowed the kind of high-stakes responsibility and autonomy he had relished as a young prosecutor in the U.S. Attorney’s office.

“It’s a real thrill to be able to handle a case that you can control,” Abramowitz said. “When you’ve been a prosecutor in your 20s and early 30s, it’s really tough to go from a job with that kind to responsibility to being one of 10 in a big firm on any particular case. You’re used to being the one who talks in court, who argues the case to a jury. So it was difficult to adjust to life at the Wall Street firms then.”

Still, Morvillo’s path was an unusual one for a young lawyer to take. Until the early 1970s, few attorneys specialized in defending businesses and executives accused in criminal cases, Abramowitz said. Even after the Watergate scandal opened up a new area of prosecution . . . . .

The AM Roundup: Fort Worth Shootings, SEC’s Most-Wanted, More

Searching for answers: Police were looking for a motive in a shooting in which they believe a man dressed as Santa Claus killed six family members in a Fort Worth, Texas, suburb on Christmas day before shooting himself. WSJ, AP, Star-Telegram

The SEC’s new “most-wanted” list: It’s a chart covered with handwritten notes, yellow highlighter and the names of about 100 hedge funds. The hedge funds have one thing in common: Their performance seems too good to be true. WSJ

Poker face: The Justice Department’s Christmas miracle — its new position that the federal Wire Act doesn’t bar Internet betting except on sports — is likely to encourage some state lotteries. . .

Robert Morvillo, Dean of the White-Collar Bar, Dies at 73

We have some sad news to bring you, LBers. White-collar defense lawyer Robert Morvillo, best known for representing Martha Stewart, Geraldine Ferraro’s husband John Zaccaroand AIG’s Maurice Greenberg, died on Saturday. His law firm announced the news of his death, at age 73, on its website:

With great sadness, Morvillo, Abramowitz, Grand, Iason, Anello & Bohrer, P.C. announces the passing of our partner and colleague, Robert G. Morvillo.  Bob was an unrivaled advocate dedicated to protecting his clients, upholding the finest traditions of the legal profession. He also was a dear friend, wonderful colleague, and cherished mentor to us all.  We extend our love and deepest sympathies to his family.  We will miss him.

According to the New York Times, he died in his sleep while recovering from a recent operation. Reuters has a story on Morvillo here.

Morvillo’s mark on the legal industry is indelible. Like several other top white-collar defense lawyers in New York. . .

Twas the Night Before the Night Before…

We’re breaking for Santa, LBers. Safe travels (for those of you for whom that applies) and don’t forget to enjoy yourselves. We won’t be gone long. LB is taking Monday off, but we’ll be back hitting the legal news hard(ish) on Tuesday and the rest of next week.

Internet Poker Is Sort of Legal!

Ah, the holidays. If you’re a poker player, the Justice Department has given you a pretty nifty gift in the way of this little-noticed legal memorandum made public Friday.

In a nutshell, the department’s Office of Legal Counsel has determined that the Federal Wire Act, the 1961 law that had been interpreted to outlaw all forms of gambling across state lines, actually only applies to “a sporting event or contest.”

Well, what does this mean? It means that Internet poker isn’t barred by any federal statute.

The Unlawful Internet Gambling Act allows federal authorities to prosecute people who knowingly accept most forms of payment in connection with unlawful Internet gambling. But the key word is “unlawful”. . .

Judges Cancel Case Assignment Experiment

Federal judges in the Southern District of New York have made a slight but important change to way cases are assigned to them: No longer will  one judge necessarily be able to claim related SEC and Justice Department cases, even when they stem from the same alleged securities fraud.

The court made the change during a Dec. 15 meeting, but the order, signed by Chief Judge Loretta Preska (right), was only recently made public.

So what does this mean in practical terms? Until this month, the rules said that “criminal cases and SEC enforcement actions arising  from the alleged fraud shall be assigned to the judge to whom the first case is assigned.”

That rule, which was only passed within the last year, formalized a longtime practice in the Southern District — the court could unofficially reassign civil cases that were related to criminal ones, or vice versa, so the same judge had both. But once formalized, the rule drew complaints: judges felt prosecutors were trying to abuse it to land or avoid judges, and some defense lawyers had the same concerns, a person familiar with the matter said.

By striking the rule, the court may also be trying to avoid the appearance that much of the high-profile work is being steered to the same judge just because he or she was lucky enough to draw the first case.

The “related” rule is one reason that some judges, including the Southern District’s Jed Rakoff, have at times seemed “ubiquitous,” . . . . .

2012: The Year Law Firms Ditch Geezer Image And Get Tweeting?

Risk-averse and hidebound many lawyers may be, but firms are finally waking up to the potential benefits of allowing lawyers to tweet, blog and otherwise get the practice’s name out there, says Adrian Dayton over at the National Law Journal.

Interactivity is the way to go, and it’s about time law firms realized it, says Dayton, an attorney and author of two books for lawyers on social media:

The way firms are using social media is like owning a fighter jet but rather than flying it, rolling it around on a dolly. Firms need to stop using social media sites as billboards and start using them to connect with people who would be difficult to reach otherwise… This is an extremely conservative group, but we are seeing a shift in the way lawyers talk about social media and in the begrudging respect even the most senior lawyers are beginning to show for these tools.

Dayton’s column follows a LexisNexis report out earlier this month that found only a handful of the 110 global practices it audited took full advantage of the interactive marketing potential of Twitter, Linked In and other social networking services. Law Blog broke down the results here. Dayton predicts that 2012 could be the year when law firms “wake up and start using social media the right way.”

The topic has stirred up lots of chatter across the blawgosphere.  For instance, law firms that . . . . .