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Good morning. In a case closely watched by law firms across the country, a federal judge ordered Covington & Burling to reveal some of its clients impacted by a cyberattack after the SEC sued for the information. Plus, a London court ordered a lawyer to pay about $36 million for helping a client hide illegal profits, and an Illinois federal judge reveals a DOJ probe into college financial aid programs. Tuesday’s happening.
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Covington must tell the SEC about some of the law firm’s public company clients that got caught up in a cyberattack against the firm, a D.C. federal judge ruled. As Andrew Goudsward reports, dozens of law firms had filed a brief backing Covington’s fight against the securities agency.
U.S. District Judge Amit Mehta ordered Covington to reveal to the SEC the names of seven clients that may have had information relevant to investors accessed or stolen, dealing a partial victory to the agency in its investigation into the hack. The SEC had sought the names of all the nearly 300 companies affected by the cyberattack. Covington, represented by Gibson Dunn, resisted identifying any client.
Law firms and other legal services providers that hold sensitive and confidential data have increasingly faced cybersecurity attacks involving their clients’ data and their own business information, our colleague Sara Merken writes. Quinn Emanuel recently disclosed that an electronic discovery vendor suffered a cybersecurity attack that may have exposed client information.
Mehta’s ruling is likely to be appealed to the D.C. Circuit. The SEC and Covington did not immediately respond to requests for comment.
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- London-founded law firm Linklaters reported increased revenue and stagnated profits, following similar financial results from other global law firms amid economic and geopolitical headwinds. Linklaters, which has about 3,000 lawyers, said it grew its revenue by 6.6% to a record high of $2.44 billion in its financial year ending April 30. The firm said in March 2022, after Russia’s invasion of Ukraine, it would wind down its Russia operations and close its Moscow office. (Reuters)
- A London court ordered an ex-lawyer of former Nigerian oil state governor James Ibori to pay around 28 million pounds (about $36 million) for helping hide funds gained illegally. Bhadresh Gohil was convicted in 2010 of 13 counts of money laundering and other offenses linked to his role helping Ibori, who was governor of Delta State in southern Nigeria from 1999 to 2007, hide the proceeds from criminal activities. (Reuters)
- Fisher Phillips will establish three offices in Mexico with a team of lawyers from Deloitte, amid what the law firm said was a “surging” demand for labor and employment advice in the country after updated trade deals and manufacturing shifts. The outposts include Mexico City and Guadalajara, Mexico’s second-largest city. (Reuters)
- Philadelphia-founded law firm Blank Rome has opened its second Texas office in Dallas and absorbed three-attorney law firm Block & McNeill. The firm also brought on four other partners from rival firms Faegre Drinker Biddle & Reath, Locke Lord and Alston & Bird. (Reuters)
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The DOJ’s policy of incentivizing companies to self-report criminal conduct and to cooperate with prosecutors in building cases against executives has emerged unscathed from a challenge that threatened to disrupt the way federal prosecutors investigate corporate crime. Alison Frankel has the details on a Friday ruling from the judge overseeing the prosecution of two former Cognizant executives accused of FCPA violations. The decision, Frankel says, should come as a big relief for prosecutors – and a big disappointment for defendants.
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“You have not put yourselves in a good position.“
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- 5th Circuit Judges Edith Clement, Leslie Southwick and Stephen Higginson will hear arguments from relatives of people killed in two Boeing 737 MAX crashes who are challenging a Texas federal judge’s rejection of their bid to prosecute the plane manufacturer. The relatives want the appeals court to reopen or dismiss Boeing’s January 2021 deferred prosecution agreement. The DOJ agreement gave Boeing immunity from criminal prosecution over fraud conspiracy charges related to the plane’s flawed design. In return, Boeing has to pay $2.5 billion in fines and compensation to the government, airlines and a crash-victim fund. U.S. District Judge Reed O’Connor ruled he did not have legal authority to grant the relatives’ requests despite what he called “Boeing’s egregious criminal conduct.”
- Also in the 5th Circuit, the DOJ is expected to file its opening brief in a challenge to an order that had sharply limited certain Biden administration officials’ and agencies’ contacts with social media companies. U.S. District Judge Terry Doughty in Monroe, Louisiana, found that officials’ efforts to limit the spread of posts they considered to be misinformation on social media violated the right to free speech under the U.S. Constitution’s First Amendment. Doughty’s order was a temporary injunction and came in a lawsuit brought by Republican attorneys general in Louisiana and Missouri and by several individuals. The 5th Circuit earlier this month put Doughty’s order on hold. A three-judge 5th Circuit panel will hear arguments on Aug. 10.
- On Capitol Hill, the U.S. Senate Judiciary Committee will hear from several witnesses at an AI oversight hearing exploring regulatory principles. Artificial intelligence startup Anthropic’s CEO Dario Amodei will testify as lawmakers consider potential regulations for the fast-growing technology. Computer science professors Yoshua Bengio and Stuart Russell also are scheduled to testify. Watch the hearing.
- Timothy Shea, an associate of Donald Trump’s former adviser Steve Bannon, is set to be sentenced in Manhattan federal court before U.S. District Judge Analisa Torres. Shea in October was convicted at trial of defrauding donors to a campaign to build a wall along the U.S.-Mexican border pursued by the former president. Prosecutors have recommended a 63-month prison sentence. Shea’s defense lawyer, Thomas Nooter, has argued the sentencing range in his client’s case is unreasonable. In a filing, Nooter said Shea “is a good man who got swept up in a dizzying vision of becoming enriched by something that both got out of control and was not what he planned.”
- Alex Mashinsky, founder and former CEO of bankrupt cryptocurrency lender Celsius Network, is expected to appear in Manhattan federal court for an initial conference after being charged earlier this month with misleading customers and artificially inflating the value of his company’s crypto token. Mashinsky has pleaded not guilty. Three federal regulatory agencies have sued Mashinsky and Celsius in connection with the case.
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Court calendars are subject to last-minute docket changes.
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- Boies Schiller is representing Burford Capital affiliate Carina Ventures in a lawsuit accusing major U.S. turkey producers of an antitrust price-fixing conspiracy. Carina filed suit in Texas, after acquiring rights from food distributor Sysco as part of a confidential settlement. (Reuters)
- A former federal prison employee in Massachusetts has agreed to plead guilty to secretly accepting thousands of dollars from hedge fund founder Raj Rajaratnam while Rajaratnam was serving time for insider trading, according to court records and a person familiar with the matter. Federal prosecutors in Boston said that William Tidwell accepted over $90,000 in benefits and a $50,000 property loan from a high-net-worth inmate while working as a counselor at the Federal Medical Center Devens in Ayer, Massachusetts. (Reuters)
- The D.C. Circuit, which is overseeing a lawsuit by Republican-led states involving California’s emissions standards for trucks, has granted permission to a group of 18 Democratic-led states, three cities and several environmental organizations to intervene in the case. The lawsuit against the EPA, which approved a waiver to California allowing it to set more stringent limits than the national standard, was brought by trucking industry groups alongside 19 Republican-led states and others. (Reuters)
- A nonprofit that supports teenage cancer patients sued Unilever in Brooklyn federal court, claiming Unilever’s use of the phrase “Not Done Yet” in ads for Degree deodorant and other products violates its trademark rights. The Garden City, New York-based I’m Not Done Yet Foundation said in its lawsuit that Degree’s motivational ad campaign threatens to confuse consumers and damage its ability to raise money. (Reuters)
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- Management-side employment firm Littler hired Bradford Kelley as a D.C.-based partner from the EEOC, where he served as chief counsel to Commissioner Keith Sonderling. (Reuters)
- Cozen O’Connor added Atoussa Mahmoudpour to the firm’s Vancouver, Canada, office as chair of the firm’s Canadian life sciences and technology practice. Mahmoudpour was previously at Norton Rose. (Cozen)
- Norton Rose Fulbright added Kevin Friedmann as head of the corporate, M&A and securities practice in the firm’s Chicago office. Friedmann was previously at Greenberg Traurig. (Norton Rose)
- Baker Botts added Andrew Roche as a Singapore-based partner in the global projects department. Roche was previously at Ashurst. (Baker Botts)
- Lewis Brisbois hired trial attorney and litigator Joseph Gallo as a partner based in its Newark office. Gallow was previously with McGivney, Kluger, Clark & Intoccia. (Lewis Brisbois)
- Hinshaw & Culbertson picked up aviation and aerospace partner Evan Kwarta from Condon & Forsyth. (Hinshaw)
- Winston & Strawn hired Scott Delaney as a partner in the firm’s private equity transactions practice, based out of the Dallas office. Delaney was previously with Weil. (Winston & Strawn)
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