Conflicts and Ethics — Judicial Disqualification Clarification, Arbitrator Conflicts Concern, Private Credit Conflicts Allegation, DOJ Crypto Conflict
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NYSB: “Opinion 25-124(B)” —
- “Facts/Issue: A new full-time judge asks about disqualification based on his/her prior employment as a sole practitioner. The judge represented defendants in a wide variety of criminal cases in courts throughout the county, including the court where the judge now presides. The judge asks for clarification about instances where the judge served as assigned counsel.”
- “Discussion: As always, a judge is permanently disqualified, without the possibility of remittal, in any case where the judge previously participated as an attorney.”
- “In other matters involving former clients, a judge is disqualified, subject to remittal, for two years. The two-year period runs from the time the attorney-client relationship completely ends, including any extension due to ongoing connections with the client such as unpaid legal fees. It is understood that, as assigned counsel, the judge was or will be compensated by the designated governmental department(s) at legally specified rates based on vouchers submitted. Accordingly, where the judge served as assigned counsel, the two-year period runs specifically from the end of the attorney-client relationship, just as it does for a judge who served as an assistant public defender.”
- “Conclusion: Where a judge previously served as assigned counsel, the two-year disqualification period for former clients runs from the end of the attorney-client relationship.”
- “Authorities: Opinions 24-168; 21-151.”
- “A Manhattan judge has declined to set aside an arbitration award despite questionable behavior by one of the arbitrators in the case, finding respondents failed to meet the high bar required to prove their rights were prejudiced by his actions.”
- “Manhattan Supreme Court Justice Nicholas Moyne found that, while a representation by neutral umpire Eli Mattioli ‘was at best misleading if not outright false,’ he could not disturb a unanimous final award to which respondents own party-arbitrator had agreed.”
- “That ruling, which concerns a long-term ground lease for Carnegie House on West 57th in Midtown Manhattan, allowed a 450 percent rent hike to take effect. The historic coop property was considered one of the last affordable buildings on what’s now dubbed ‘Billionaires Row.'”
- “The building’s tenants sought to vacate the decision from the tripartite arbitration panel last year, alleging party misconduct and arbitrator impartiality, and sought a preliminary inject to prevent the rent reset from taking place.”
- “Their counsel alleges that Mattioli, while acting as a neutral umpire in the matter, accepted a paid, unrelated engagement from the landlord’s lawyer and then made an incomplete and misleading disclosure about the offer.”
- “When the tenants requested Mattioli recuse himself, they allege he instead suggested a ‘quid pro quo’ in which he would not accept the other job if they withdrew their recusal motion.”
- “‘While the conduct surrounding the neutral umpire’s acceptance and later refusal of an unrelated engagement offered by Landlord’s counsel created an appearance of impropriety, this conduct, when assessed against the stringent standards of CPLR Article 75, does not constitute the corruption, fraud, misconduct, or partiality necessary to justify the extreme remedy of vacating a final arbitral award,’ Moyne wrote.”
- “Morrison Cohen partner and retired judge David Saxe, who represents the tenants, called Moyne’s decision ‘misguided.'”
- “‘In our mind, once the developer’s counsel reached out to the arbitrator and offered him a job while our arbitration was pending, it was very problematic,’ said Saxe, who previously served as an Associate Justice at the Appellate Division, First Department. ‘The arbitrator’s decision to try and accept that additional retention really created the appearance of ethical impropriety.'”
- “Mattioli was appointed as neutral arbitrator, or umpire, in the matter in February 2025.”
- “Court records show he was then approached by Nixon Peabody partner Thomas Mealiffe, who serves as primary counsel for the landlord, 57th & 6th Ground LLC, to serve in an unrelated appraisal proceeding identified in filings as the ‘Durst engagement.’ Mealiffe did so, the judge wrote, without notifying counsel he was offering Mattioli a paid job or that he was communicating with Mattioli on the side.”
- “‘By itself, this action posed a significant ethical risk that the integrity of the arbitration could be called into question,’ Moyne wrote in his ruling. ‘This is particularly true given that the parties previously agreed that ex parte communications with the Umpire were prohibited.'”
- “In a subsequent disclosure to the parties that Moyne called ‘demonstrably imperfect,’ Mattioli told the parties he’d been ‘invited’ to serve on the unrelated proceeding but did not say he’d been approached by Mealiffe. ‘In fact, he claimed that he had not had any ex parte communications with Mr. Mealiffe, a claim that was at best misleading if not outright false,’ the judge said.”
- “Saxe described the umpire’s email to parties as that of someone ‘trying to ‘kosherize’ the situation.'”
- “‘He was in fact trying to give the impression that this was all above board to get the referral for other business,’ the attorney added.”
When the tenants sought his recusal, Saxe said Mattioli did every ‘everything in his power to disadvantage the coop,’ including expediting hearings and issuing a final award before the proceeding concluded.” - “Though a severe appearance of partiality existed in this matter, Moyne wrote, the tenants failed to show objective facts linking any impartiality to the final award.”
- “‘While the Umpire’s initial attempt to bargain with the Tenant was ill-advised and questionable, particularly since it came at the suggestion of the Landlord’s counsel, the record does not establish that the conflict resulted in financial motivations or actual prejudice affecting the final valuation, particularly given the unanimous nature of the award,’ Moyne said.”
“Complaint Accuses Trump’s Criminal Attorney of ‘Blatant’ Crypto Conflict in His Role at DOJ” —
- “An ethics watchdog group filed a complaint Thursday seeking an investigation into whether President Donald Trump’s criminal defense attorney — now the No. 2 at the Justice Department — broke federal conflict-of-interest law when he issued a new prosecution policy that benefits the cryptocurrency industry.”
- “The complaint comes after a ProPublica investigation revealed last month that Todd Blanche owned at least $159,000 worth of crypto-related assets when he ordered an end to investigations into crypto companies, dealers and exchanges launched during President Joe Biden’s term. Blanche, the deputy attorney general, issued the order in an April memo in which he also eliminated an enforcement team dedicated to looking for crypto-related fraud and money-laundering schemes.”
- “Blanche had previously signed an ethics agreement promising to dump his cryptocurrency within 90 days of his confirmation and not to participate in any matter that could have a ‘direct and predictable effect on my financial interests in the virtual currency’ until his bitcoin and other crypto-related products were sold.”
- “Later ethics filings show Blanche divested from the investments more than a month after he issued the memo. Even when he did ultimately get rid of his crypto interests, his ethics records show he did so by transferring them to his adult children and a grandchild, a move ethics experts said is technically legal but at odds with the spirit and intent of the law.”
- “In its complaint this week, the Campaign Legal Center asked the Justice Department’s acting inspector general to launch an investigation. The complaint alleged that the evidence suggests that Blanche ‘blatantly and improperly influenced DOJ’s digital asset prosecution guidelines while standing to financially benefit.'”
- “The Campaign Legal Center is a nonpartisan government watchdog group dedicated to addressing challenges facing democracy in the U.S. Its trustees and staff include Democrats and Republicans, including Trevor Potter, a Republican former chair of the Federal Election Commission, who serves as president of its Board of Trustees.”
- “Under the federal conflicts-of-interest statute, government officials are forbidden from taking part in a ‘particular matter’ that can financially benefit them or their immediate family unless they have a special waiver from the government. The penalties range from up to one year in jail or a civil fine of up to $50,000 all the way to as much as five years in prison if someone willfully violates the law.”
- “In the complaint, Payne alleged that Blanche’s orders violated the law because they benefited the industry broadly, including his own investments. He estimated that Blanche’s bitcoin alone rose by 34%, to $105,881.53, between when he issued the memo and when he divested. At the time he issued the memo, Blanche also held investments in several other cryptocurrencies, including Solana and Ethereum, and stock holdings in Coinbase.”
“Private Credit Deal Gone Bad Spawns Court Fight Over Conflicts” —
- “Planet Networks Inc. thought it had landed a $50 million private credit deal to finance the fiber internet company’s expensive push into New York’s Hudson Valley. Instead, its founder now says a private equity firm dangled the loan to access his trade secrets while its own competing startup tried to swoop into the region.”
- “The financing gone bad with Wafra Inc.-backed private equity manager Post Road Group has landed in New York state court, with a lawsuit filed earlier this month by Planet.”
- “The fiber internet company accused the Connecticut-based manager and its co-founder Michael Bogdan of misrepresenting their involvement in Post Road portfolio company Archtop Fiber, founded only months prior, and using the pretext of an investment in Planet to steal competitive information and stall its growth plans.”
- “‘PRG never intended to enter into a deal with Planet, and it never did,’ the company and its founder Robert Boyle said in the lawsuit.”
- “Private credit has boomed into a $1.7 trillion industry in part on the pitch to borrowers that expert specialty firms understand their businesses and can reduce the hurdles to completing loans. But as more private equity investors with their own portfolio companies have also become lenders, the potential for conflicts of interest has also grown.”
- “‘We believe the lawsuit is meritless and plaintiffs’ claims are completely baseless,’ Jeff Kramer, an attorney for the defendants, said in a statement. ‘We intend to defend ourselves vigorously in this case.'”
- “Planet says Post Road provided a $12 million bridge loan in January 2023 and committed to $50 million in long-term debt that would be hammered out in a 90-day window. The package was more attractive to Planet than competing equity investments because it would allow the 30-year-old company to grow and its founder to retain control.”
- “According to the lawsuit, Post Road slow-rolled its potential investment in Planet and used ‘bait-and-switch tactics’ to steal its trade secrets, including sensitive information related to permitting maps, technologies, business opportunities and vendor relationships. That helped Archtop, created and controlled by Bogdan, expand into the Hudson Valley, Planet alleges.”
- “While Planet acknowledges that it knew Post Road had committed hundreds of millions of dollars to Archtop, the private equity firm represented itself as a ‘mere passive’ investor in the competitor, according to the complaint. Planet said it relied on Post Road’s assurances that it could manage any conflicts of interest.”
- “‘PRG sought to entice Planet with the allure and facade of funding and a beneficial relationship while actually intending to bully Planet into ceding its New York operations to Archtop, misappropriate Planet’s confidential information for Archtop, and bleed it dry while it was reliant on PRG for cash,’ the company said in the lawsuit.”
- “Now, the type of financing that pitches privacy as a virtue is spilling out in court in what amounts to a rare public rebuke within the close-knit world of digital infrastructure investing.”








