Tag Archives: fraud

Alas, National Banks Have Virtually No Fiduciary Duties To Depositors And Are Almost Impossible To Sue

I've sued several multinational banks for breaches of fiduciary duty and breaches of contract, and have always been amazed their lack of any accountability or responsibility. It's not just a handful of instances of banks selling a company's loan to their competitor and bank lawyers lying to federal regulators. They live in a different world from you and I. In one of my cases, a bank fired a financial adviser because he was covering his gambling losses by stealing from clients. All well and good, until the bank covered up the whole mess and didn't tell any of his clients ... Continue Reading

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Philosophy Explains How Legal Ethics Turn Lawyers Into Liars

I am a fan of the American court system. There is no natural law requiring people to resolve their differences by asking third parties to represent them and advocate on their behalf in front of impartial decision-makers. The folks in classical Athens and Rome thought it was a good idea, the Europeans rediscovered the practice in the Middle Ages, and the adversarial system of law has been consistently practiced by England, and then America, ever since.   Since the classical time, there have always been restrictions on lawyers intended to keep them honest. Most of those "restrictions" have amounted to ... Continue Reading

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More False Claims Act Smoke And Mirrors To Deny Whistleblower Awards

Via the WSJ Law Blog, Amy Kolz at The American Lawyer has a new article about the False Claims Act: "[FCA cases] are a big gamble," says Piacentile's counsel, former Boies, Schiller & Flexner partner David Stone of Stone & Magnanini, who cites cost-benefit analyses and good relationships with prosecutors as essential to his qui tam practice. "That's why you have to know what you're doing. Otherwise you can be in a case for ten years and not get anything." But there is a darker perspective on Joseph Piacentile. Unlike most qui tam relators, he doesn't blow the whistle as an ... Continue Reading

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E.D.Pa. Refuses To Dismiss RICO Act Claims Against Title Insurers On Enterprise “Distinctiveness” Grounds

The Racketeer Influenced and Corrupt Organizations Act ("RICO") is not all that complicated. Section 1962(c) provides: It shall be unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise’s affairs through a pattern of racketeering activity or collection of unlawful debt. In case you think "racketeering activity" is too vague, don't worry — the RICO Act defines it specifically. If the plain meaning rule was applied as strictly as courts say it should be, then ... Continue Reading

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Partial Judicial Immunity Granted To Corrupt Luzerne County Judges

Following up on my post of two weeks ago on judicial immunity in the "kids for cash" Luzerne County scandal, Judge Caputo of the Middle District of Pennsylvania issued his ruling yesterday, which holds in pertinent part: For judicial immunity to apply, only two requirements need to be met: jurisdiction over the dispute, and a judicial act. As to the first, a judge is not immune only when he has acted in the “clear absence of all jurisdiction." Stump 435 U.S. at 349 (citation omitted). Second, a judicial immunity extends only to “judicial acts,” not administrative, executive, or legislative ones. Id. at 360-61. ... Continue Reading

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Jones v. Harris Brings Out Another Harvard Law Professor Who Knows More About Writing Columns Than Litigating Cases

[Updated to clarify a distinction between securities suits and investment company act suits.] This week, the Supreme Court heard arguments in Jones v. Harris. Briefly, the Oakmark complex of mutual funds "hired" Harris Associates as investment advisers, paying Harris 1% (per year) of the first $2 billion of the fund’s assets, 0.9% of the next $1 billion, 0.8% of the next $2 billion, and 0.75% of anything over $5 billion. I write "hired" because the situation is murky: Harris is directly affiliated with Oakmark. Importantly, the fee charged by Harris to Oakmark is more than double the fee it charges unaffiliated ... Continue Reading

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Don’t Make Your Contracts Apply “Throughout the Universe”

The Wall Street Journal's Law Blog points us to a WSJ story on the absurd language used in copyright contracts these days: Decked out in sequined black and gold dresses, Anne Harrison and the other women in her Bulgarian folk-singing group were lined up to try out for NBC's "America's Got Talent" TV show when they noticed peculiar wording in the release papers they were asked to sign. Any of their actions that day last February, the contract said, could be "edited, in all media, throughout the universe, in perpetuity." She and the other singers, many of whom are librarians in ... Continue Reading

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Academic Abstention Should Not Be a Blank Check for Arbitrary and Capricious Conduct by Universities

Via Atrios, we have Stanley Fish's recent NYTimes column, The Rise and Fall of Academic Abstention: As recently as 1979, legal academics Virginia Nordin and Harry Edwards were able to say that “historically American courts have adhered fairly consistently to the doctrine of academic abstention in order to avoid excessive judicial oversight of academic institutions” (Higher Education and the Law). Academic abstention is the doctrine (never formally promulgated) that courts should defer to colleges and universities when it comes to matters like promotions, curricula, admission policies, grading, tenure, etc. The reasoning is that courts lack the competence to monitor academic ... Continue Reading

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Supreme Court To Review Enron “Honest Services” Mail Fraud Conviction

SCOTUSBlog reports: The Supreme Court agreed on Tuesday to rule on claims that “searing media attacks” on longtime Enron executive Jeffrey K. Skilling tainted his criminal trial and conviction on various fraud charges.  The case of Skilling v. U.S. (08-1394) also raises an issue on the scope of the federal law punishing the failure to provide “honest services” as a corporate executive. In his petition to the Supreme Court, Skilling argued, In closing argument, the government declared that Skilling and Lay committed honest-services fraud because they violated a duty to Enron’s “employees”—a duty the government described as “a duty of good ... Continue Reading

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Small Businesses More Likely To Have Corporate Veil Pierced Than Large Companies

That's the conclusion of new scholarship by law professors Dave Hoffman and Cristy Boyd, in a draft just published here on SSRN, with blogging about it here. After analyzing 690 cases that sought to pierce the corporate veil between 2000 and 2005, they conclude: The part that extra-legal influences play in veil piercing cases should caution corporate lawyers and scholars. Although jurists have focused on the influence of law and lawyers' craft on the likelihood of defending the veil, we find that two previously ignored factors – ideology, and firm size, play as important a role, if not more so. ... Continue Reading

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