Bressler Risk Blog

I just discovered “Dear Ethics Lawyer” from Mark Hinderks at Stinson. Here’s an interesting recent piece on: “Positional Conflicts” —

• “Q: Dear Ethics Lawyer, I am handling a significant case in which I am preparing to argue to a federal district court in our state that a state law cause of action against our client under relatively recent legislation is preempted by federal law. I’ve just learned that one of my partners in the firm is coincidentally preparing to argue in state court on behalf of a different client that preemption does not apply.”
• “I discovered this by accident, given that our firm (similar to other firms) does not track the specific legal arguments being made over time in individual cases as part of its conflict-checking system. Now that I know about it, what do I do? Is this an actual conflict, or something that will just be difficult to explain to the clients if they find out we are arguing both sides of the same argument at the same time?”
• “A: Positional or issue conflicts occur when a lawyer (or firm) is advocating a substantive position in one matter that could be detrimental to the interests of another client in a different matter. This situation raises questions such as whether the first decision rendered will be persuasive or even binding precedent affecting the other case; whether the judge(s) will discount the lawyers’ advocacy knowing the firm is on both sides of the issue; and whether the clients will be concerned by, or even subject to divided loyalties of the lawyers involved?”
• “The issue is dealt with to a certain extent in Model Rule 1.7, Comment 24, which states that ordinarily ‘a lawyer may take inconsistent legal positions in different tribunals at different times on behalf of different clients,’ and that the ‘mere fact’ that precedent might be created adverse to the interest of a client in an unrelated matter does not create a conflict of interest. If, however, there is a significant risk that the advocacy for one client will materially limit the lawyer’s effectiveness for another client in a different case, then a conflict will exist.”
• “Formal Ethics Op. 93-377 (1993) also looks at the issue primarily in the framework of a material limitation conflict under Rule 1.7(a)(2). Is the importance of the issue likely to affect the ultimate outcomes? Is the determination in one case likely to have a significant impact on the determination in the other? Will there be any ‘inclination by the lawyer, or her firm, to ‘soft pedal,’ de-emphasize or alter certain arguments to avoid impacting the other case?’ It concludes on the one hand that a conflict does exist when a lawyer or firm argues opposing substantive positions in the same jurisdiction at the same time; and on the other hand that no conflict exists when the matters are not litigated in the same jurisdiction and there is no substantial risk that either representation will be adversely affected by the other. Of course, there is a huge gray area between these two outcomes, in which the lawyer(s)/firm involved must examine the factors referenced above as to whether a material limitation conflict exists.”
• “There is also the matter of whether the matter should be disclosed to affected clients, especially if the decision is to proceed with both representations. As a practical matter, disclosure and consent (where disclosure may be made, and consent obtained under Rule 1.7(b)) may cure both any actual conflict of interest and inoculate the firm against client surprise and disappointment upon learning its lawyer or firm is arguing a position adverse to its interest.”
• “In the situation you describe above, the two matters are not in the same jurisdiction (one is in state court, the other federal), but are in the same state, where decisions of state and federal courts on a legal issue are likely to have significant influence, one upon the other. You should consider whether either representation is likely to adversely affect the other given the importance of the issue involved, and whether there is any other material limitation on the ability of you and your partner to vigorously present your arguments in the interests of your respective clients, and to have them fairly received by the courts involved. The safe route is either not to knowingly proceed with both matters, or to obtain informed consent if possible from the affected clients.”

“Nelson Mullins Faces $2B Suits Over Alleged Conflicts” —

• “The former wives of two insurance mogul brothers have sued Nelson Mullins Riley & Scarborough LLP for $2 billion, claiming a partner there set up the couples’ estates while quietly conspiring with the brothers to shield marital assets from the wives in the event of divorce.”
• “In two nearly identical suits filed Wednesday in West Palm Beach, Florida, Michelle Waite and Sandra Cohen, who were married to Seth and Brad Cohen, respectively, said Nelson Mullins partner Jonathan Gopman jointly represented them with their husbands when he helped do their estate planning.”
• “But he then worked against the wives’ interests by taking steps with the Cohen brothers, who founded Insurance Care Direct, to cut the wives out of their shares of the marital assets without communicating with the women.”
• “Waite and Sandra Cohen estimate they were denied between $500 million and $1 billion each in what should have been their fair share of the marital assets in their divorces.”
• “Gopman placed marital assets outside the women’s reach, including through complex and unnecessary corporate restructurings and the establishment of foreign trusts, according to the suit. He also helped the brothers secret away marital assets over the course of several years, according to the suit.”
• “Gopman was at Akerman LLP in 2015 when he helped the couples set up their estates, according to the suit. He joined Nelson Mullins in July 2021.”
• “The ex-wives allege that the law firm knew Gopman had previously represented each couple jointly, but agreed to represent the brothers in their respective divorces despite the conflicts of interest.”
• “‘Because Nelson Mullins was involved as counsel in the divorce proceedings, as well as having its own counsel to defend Gopman and its interests in those same proceedings, Nelson Mullins was fully aware of the conflict of interests involved,’ the ex-wives said.”
• “Nelson Mullins also helped the brothers set up a new entity, Entratus LLC, which claimed ownership of the proprietary intellectual property developed over several years at ICD entities, according to the suit.”

David Kluft asks: “Can I wait until the Court finds a conflict before I start screening the new lawyer?” —

• “A CA lawyer represented Home Depot in a few slip and fall personal injury cases, including some involving traumatic brain injury claims. The representation concluded in 2014, she joined a new firm, and in 2025 the new firm (including this lawyer specifically) appeared in a personal injury lawsuit by a man claiming he rented equipment from Home Depot that malfunctioned, causing a traumatic brain injury.”
• “The firm didn’t seek a conflict waiver and didn’t seem to consider it a conflict at all. This confidence may have been based on the passage of time, or the fact that this was a completely different case, or that it was a different type of case (slip and fall vs. equipment malfunction).”
• “Home Depot moved to disqualify both the lawyer and the whole firm. The Court allowed the motion, apparently impressed with the argument that the matters were ‘substantially related’ because the same type of injury was alleged, and therefore the lawyer’s knowledge of Home Depot’s litigation strategies from a decade ago would give her an unfair advantage.”
• “Because the new firm hadn’t bothered to screen anyone from the lawyer’s knowledge, the whole firm was disqualified. The Court stated: ‘[S]creening should be implemented before undertaking the challenged representation or hiring the tainted individual.'”
• “[Ed [Kluft]. Note: Even assuming the judge was correct on the merits, he did a terrible job explaining why this case was distinguishable from other ‘playbook’ cases in which lawyers were not precluded from litigating against former clients, he failed to address the very large passage of time, and his reasoning taken literally would forever ban any lawyer from being adverse to any former client on certain types of cases, which is not what the conflict laws are trying to achieve. Sloppy opinion. Still, the firm should have seen this coming and implemented screening instead of assuming they would win the motion.]”
• “Decision: here.

“FBI warns of in-person data theft attacks from extortion gang” —

• “The FBI warned on Tuesday that the Silent Ransom Group (SRG) extortion gang is now targeting U.S.-based law firms in in-person data theft attacks.”
• “‘As of Spring 2026, SRG actors use a social engineering scheme to pose as an employee from the victim’s IT department. SRG actors either directly call or send phishing emails to urge employees to call the SRG actor posing as IT support,’ the FBI warned in a Tuesday flash alert.”
• “‘While on the phone, the SRG actor directs the employee to grant access to a remote desktop session. If that attempt fails, SRG sends a threat actor to the victim’s location to gain access to insert a storage device into the victim’s computer.'”
• “By going to the victim’s location in person, the malicious actors can steal data by connecting USB drives or external hard drives to the victim’s computer.”
• “‘Through phone calls and phishing emails, SRG actors pose as IT support to establish access to victim computers and exfiltrate data, usually through legitimate remote access tools or by sending an individual in-person to the victim company’s location to gain physical access to computers,’ the FBI added.”
• “SRG uses the stolen data to extort the victims by sending a ransom email that threatens to sell or post it on their leak site, and will also call the victims’ employees or clients to pressure them into beginning ransom negotiations.”
• “This week’s flash alert follows a May 2025 FBI private industry notification warning that the same extortion gang had been targeting U.S. law firms in callback phishing and social engineering attacks for more than two years.”

“Brownstein Hyatt Faces DQ Bid In Sports Betting Biz Fight” —

• “A sports-betting executive suing her former employer for defamation and contract breach is looking to oust the company’s Brownstein Hyatt Farber Schreck LLP attorneys, telling a Nevada federal judge that the firm’s prior work for her creates a conflict.”
• “The legal feud between Australian betting company PlayUp and its former U.S. CEO, Laila Mintas, has plodded along for nearly five years, with each side preparing for trial on Mintas’ claims of defamation, breach of contract and lost wages against the company. But in a Tuesday motion, Mintas’ attorneys claimed that a recently discovered conflict should prohibit the Brownstein Hyatt team from representing PlayUp.”
• “‘Disqualification is warranted because BHFS has an imputed conflict of interest,’ Mintas said. ‘To allow this conflict to remain when there are clear indications that it is being abused would undeniably erode public trust in the profession as a matter of policy.'”
• “At the center of the disqualification request is Brownstein Hyatt’s representation of Mintas while she was still employed at PlayUp, in a case brought by a co-founder of the gambling platform Bet.Works, alleging that Mintas and others conspired to push him out of his company. The matter was eventually settled, but Mintas believes that the dispute offered the Brownstein Hyatt attorneys crucial information.”
• “‘While BHFS characterizes this representation as ‘narrow,’ the scope was not limited to mere procedural filings, and instead offered insight into Dr. Mintas’s professional and personal life that could be — and may well be — weaponized by an adverse party,’ she said.”
• “In an April 27 letter, Brownstein Hyatt attorneys refuted Mintas’ assertions, saying there was ‘no basis — factually or legally — to conclude that a conflict exists,’ stressing that its work was limited only to ‘negotiating and finalizing a settlement.'”
• “The underlying case surrounds Mintas’ time at the company during the collapse of a potential acquisition by the now-defunct cryptocurrency trading platform FTX. PlayUp sued Mintas for tanking the deal, seeking $465 million in damages. Those claims were thrown out last year, but a Nevada federal court allowed Mintas’ counterclaims, including that the company’s leadership defamed her and denied her compensation, to proceed to trial.”
• “According to Mintas, who was born in Germany, Brownstein Hyatt’s prior work on her behalf made the attorneys privy to her immigration status, which she said may be pivotal in PlayUp’s efforts to defeat her case on jurisdictional grounds.”
• “In their letter opposing Mintas’ request for PlayUp’s counsel to exit the case, the Brownstein Hyatt attorneys said that if the company were to make a jurisdictional argument, the facts of her immigration status would have to be disclosed, a passage that set off alarm bells for Mintas.”
• “‘This is an extraordinary admission: BHFS is simultaneously arguing that it possesses no relevant confidential information while telegraphing the use of precisely that information as a basis for a subject matter jurisdiction challenge,’ she told the court.”

“Lawyers Can Drop Uncooperative Clients, Within Limits, ABA Says” —

• “Lawyers can stop providing services or seek permission to do so if a client doesn’t fulfill basic obligations in the attorney-client relationship, the American Bar Association said in a new ethics opinion.”
• “This option, under Rule 1.16(b)(5), is most commonly invoked when a client repeatedly fails to pay for legal services, the ABA noted in its Wednesday opinion. However, the rule can also be applied to clients who refuse to cooperate with their attorney, provide or update their contact information, or comply with other terms of an engagement agreement, the ABA said.”
• “This is true even in circumstances where withdrawing representation would inflict a material adverse effect on the client, the ABA said, with the caveat that attorneys must give their client ‘reasonable warning that the lawyer will withdraw unless the obligation is fulfilled’ before they can abandon their client.”
• “‘In addition to serving as a risk management tool for the lawyer and law firm, engagement agreements should provide the client with a meaningful understanding of the material terms of the relationship,’ the association said. ‘This Opinion focuses specifically on provisions concerning the client’s obligations.'”
• “The opinion lays out several limitations an attorney must consider when drafting engagement agreements.”
• “For example, engagement agreements can stipulate provisions that the Model Rules of Professional Conduct don’t require, such as more implicit client obligations like producing necessary documents and providing truthful information.”
• “An agreement could also have terms that are ‘not otherwise implicit’ as long as they’re ‘within ethical limits,’ the ABA said, including provisions that prohibit a client from recording conversations or disclosing the attorney’s identity on social media over the course of representation.”
• “Client agreements can’t be used to require clients to comply with terms prohibited under the Model Rules or other public policy, such as forcing a client to ‘promise not to later pursue a disciplinary complaint or bar grievance against the lawyer or law firm.’.”
• “The opinion emphasizes that attorneys must enforce engagement agreements that are accurate or not misleading to the client; the ABA bars agreements that mischaracterize the client’s prospective rights and obligations, in addition to the circumstances in which attorneys can withdraw representation.”
• “Agreements also can’t include ‘a blanket stipulation irrevocably consenting to the lawyer’s future withdrawal’ in circumstances when an attorney wishes to withdraw for a reason not specified and agreed to by the client, the opinion said.”

David Kluft asks: “Should defense counsel be disqualified if she knows the medical history of a prosecution witness?” —

• “A NJ man was on trial for murder. The prosecution planned to call the man’s cellmate to testify that the man had admitted the murder to him. The problem was that defense counsel briefly represented the cellmate years before, and during that time had access to his mental health records, which among other things discussed his battle with schizophrenia.”
• “The prosecution moved to disqualify her. The Court allowed the motion, finding that defense counsel’s familiarity with the medical records of the cellmate and the very serious mental health issues detailed therein would be ‘part of the calculus’ in any attack on his credibility, and that this required her disqualification.”
• “The NJ App. Division affirmed, noting in passing that the two matters were ‘substantially related’ for conflict purposes, presumably because they both involved the mental health of the cellmate. According to the court, there was a substantial risk that defense counsel would either have (a) used the confidential information from the former client (the cellmate), thus giving an unfair advantage to the defendant; or (b) failed to vigorously cross-examine the witness about his mental health for fear of using the confidential information. Either way, the Court agreed it was appropriate to disqualify her.”
• Decision: here.

“Law firm Wiley Rein hit with class action over data breach tied to Chinese hackers” —

• “Prominent U.S. law firm Wiley Rein has been sued in a proposed class action alleging the firm failed to protect sensitive personal data stolen by hackers believed to be affiliated with ​the Chinese government. The lawsuit was filed on Friday in the federal court in Washington by a ‌Florida resident and seeks class-action status for potentially thousands of people.”
• “The complaint alleges that cybercriminals accessed Microsoft 365 email accounts belonging to certain Wiley Rein personnel between July 2024 and June 2025 before the firm detected the intrusion last year. The stolen data ​allegedly includes names, addresses, dates of birth, financial account numbers, medical information, and full or partial ​Social Security numbers, according to the lawsuit. The firm did not begin notifying victims ⁠until on or around March 6, 2026, the complaint said.”
• “Wiley Rein acknowledged after an internal probe that ‘a group that may ​be affiliated with the Chinese government’ carried out the intrusion, according to the lawsuit. In a notice to at least one victim, Wiley Rein said that the firm was arranging for the person to have 12 months of complimentary credit monitoring, and that ​it had ‘taken additional steps to enhance our existing security measures.'”
• “Law firms, like other major U.S. businesses, have faced ​a wave of cyberattacks in recent years. Law firms are particularly attractive targets for sophisticated criminal and state-linked hackers drawn to the ‌vast ⁠troves of sensitive client data they hold.”
• “The complaint alleges the breach ​occurred through a so-called ⁠phishing email, and that Wiley Rein failed to implement basic cybersecurity safeguards, including multi-factor authentication and adequate staff training.”
  “‘Wiley Rein’s breach differs from typical data breaches because it ​affects consumers who had no relationship with Wiley Rein, never sought one, and ​never consented to ⁠Wiley Rein collecting and storing their information,’ the lawsuit said.

“9th Circuit Clears Firm in Arbitration Disclosure Lawsuit” —

• “Defendants’ counsel in a privately mediated child custody dispute had no duty to disclose to a plaintiff that they retained and appeared before the same mediator in other matters, the U.S. Court of Appeals for the Ninth Circuit held Monday.”
• “The unanimous three-judge panel concluded in an unpublished memorandum opinion ‘that there was no evidence of a conspiracy’ between attorneys at Moore, Schulman & Moore and JAMS mediator Jeannie Lowe solely because they had appeared before the former San Diego County Superior Court commissioner in eight other cases.”
• “Additionally, the court wrote, the Moore Schulman attorneys had no mandate under California law to refrain from hiring Lowe to mediate other matters or to tell the plaintiff, Nicholas Vena, that they had done so.”
• “‘Vena does not cite any relevant cases, rules, or statutes to support either duty,’ stated the opinion signed by Ninth Circuit Judges Jacqueline Nguyen and Daniel Bress as well as Fifth Circuit Judge Stephen Higginson, who sat on the case by designation.”
• “While affirming a district court’s grant of summary judgment for Moore Schulman and attorneys Julie Westerman and David Schulman, the panel criticized Lowe for not disclosing the eight matters the firm had before her.”
• “‘We agree with Vena that Canon 6D(5)(a) of the Code of Judicial Ethics demands more,’ the opinion stated.”
• “The cited canon requires arbitrators to disclose ‘information reasonably relevant to the question of disqualification,'”
• “In a concurrence, Bress wrote that the case highlighted ‘risk areas for retired judges engaging in ‘private judging,’ and the duties of law firms who retain these judges.’ Bress noted that Lowe ultimately recused herself from the case after Vena questioned her impartiality, although she denied having any bias.”
• “‘Although I do not ascribe any wrongful intent to Commissioner Lowe, the outcome here—an expensive, fifteen-day child-custody trial being vacated due to a judge not adhering to continuing disclosure obligations—is unfortunate for everyone involved and should have been avoided,’ Bress wrote.”
• “And while Moore Schulman had no disclosure duty in the Vena matter, ‘with the proliferation of litigants retaining retired judges to resolve their disputes, the subject of potential state-law duties on the part of lawyers is worthy of further consideration by state courts and governing bodies,’ the judge added.”
• “California, like other states, has tried in recent years to impose ethical standards on private judges, particularly in the area of ‘repeat player bias,’ where neutrals’ impartiality may be questioned when parties continue to bring them cases or firms solicit future business from existing clients.”
• “In 2024, California’s Legislature enacted a number of arbitration practice rules, including a prohibition on arbitration companies soliciting future business from a lawyer or litigant with a case pending before a firm neutral. Those changes were primarily aimed at consumer arbitration, however, and they did not take effect until after the Vena matter went to arbitration.”
• “As part of a disclosure package provided to the attorneys, Lowe announced she had an unspecified ‘significant professional relationship’ with Moore Schulman and that she was open to considering some types of work offers from the firms of attorneys in the case, ‘including offers to serve as a dispute resolution neutral in another case.’ The disclosure also stated she wouldn’t disclose to the parties in the Vena case if that happened while the matter was pending.”
• “Nicholas Vena acknowledged the mediator’s recitals and agreed to proceed.”
• “In July 2021, Lowe ordered child and spousal support terms for Christina Vena that Nicholas Vena thought were unfair. Two months later, his attorney sought additional disclosures from Lowe that showed Moore Schulman had eight previously undisclosed mediations with her.”
• “Nicholas Vena sought to disqualify Lowe, citing his inability to continue paying for her services and her undisclosed work with his wife’s firm. A San Diego judge voided Lowe’s orders.”
• “The custody dispute proceeded in San Diego County Superior Court, where, the Ninth Circuit opinion said, the outcome was ‘substantially the same or worse’ for Nicholas Vena. He sued Moore Schulman and the two attorneys representing his wife, alleging a violation of his due process rights.”
• “Caitlin McNair Jones, a Moore Schulman attorney who defended the firm against Nicholas Vena’s lawsuit, said the case represented a ‘bit of a bellwether’ in deciding whether attorneys have an implied duty to ‘police the bench’ in disclosures. Two courts have now decided ‘there isn’t one,’ she said.”

David Kluft asks: “Does my judicial clerkship create a personal interest conflict?”

• “A SD federal court appointed an attorney to represent an incarcerated plaintiff in a civil rights case. The plaintiff objected to the appointment of the attorney on the grounds that she had a conflict of interest, specifically, that she used to be a clerk for the same court about five years earlier.”
• “The Court rejected the notion that a former clerkship with a court was a ‘personal interest’ that created a significant risk that the representation would be limited or that otherwise triggered a conflict under Rule 1.7. Nor was there a rule that a judge cannot preside over a trial in which a former law clerk is counsel.”
• “The Court also devoted a paragraph of the opinion to explaining that the attorney had more experience in prisoner civil rights cases than most lawyers in the state in part because of her work as a clerk (translation: you are lucky to have her so zip it).”
• Decision: here.

“Samuel Alito Has Exposed Himself to Felony Bribery Charges Under New Jersey Law” —

• “In October 2026, the Supreme Court will hear a case called Suncor Energy v. County Commissioners of Boulder County, and Justice Samuel Alito is on track to vote in it. The lead petitioner is a company in which Paul Singer’s hedge fund holds a stake worth roughly 1.97 billion dollars. Singer is the same billionaire who flew Alito to Alaska on a private jet in 2008, in a gift Alito never reported, before Singer’s fund won a case in front of Alito that delivered it 2.4 billion dollars. The Court heard an earlier version of this same Suncor case in 2023, and Alito recused. The case has come back on the same question with the same parties, and this time he has not stepped aside.”
• “That recusal in 2023 and the refusal to recuse now turn on a rule most folks intuitively understand. Recusal is the rule that keeps a gift from becoming a bribe. A judge who takes something of value from a person and then rules on that person’s case has turned the gift into something that looks like payment for the ruling. Recusal is how a judge prevents that: they step aside and never vote, and the gift stays a gift.”
• “Samuel Alito has refused to step aside at least three times in cases tied to the people who gave him things of substantial value, or to the operative who arranged the giving.”
• “Here is the first, and it is the one that built the relationship. In July 2008, Alito flew to a fishing lodge in Alaska on Paul Singer’s private jet, a seat that would have cost more than 100,000 dollars to charter. Leonard Leo arranged the trip. Leo is the operative who ran the campaign to confirm Alito to the Court and who has spent his career connecting wealthy conservative donors to conservative judges. Alito did not report the trip on his 2008 financial disclosure form or on any form afterward, until ProPublica exposed it in 2023. Six years after the trip, Singer’s hedge fund had a case before the Court, Republic of Argentina v. NML Capital. Justice Sotomayor recused. Alito did not. He voted with the majority for Singer’s side, and within two years Singer’s fund collected approximately 2.4 billion dollars from Argentina.”
• “Here is the second. In 2023, Alito sat for two long private interviews with attorney David Rivkin inside his chambers at the Court. At the time, Rivkin was the lawyer of record for the petitioners in a case called Moore v. United States, which the Court agreed to hear in the weeks between the two interviews. Rivkin was also Leonard Leo’s personal lawyer, defending Leo against the Senate subpoenas that grew out of the Alaska trip investigation. Alito refused to step aside from Moore, calling Rivkin a journalist rather than a litigant during those chambers visits. The Court ruled for Rivkin’s clients in June 2024, with Alito in the majority.”
• “The third is Suncor, the vote that is still ahead. Alito owns shares in seven energy companies and a fund that holds ExxonMobil, which is one of the petitioners in the case. He recused from the identical case in 2023 and has not recused now, and Singer’s 1.97 billion dollar position in the lead petitioner ties this vote back to the man who paid for the 2008 trip. One episode looks like a lapse. Three, with the same operative and the same donor running through them, look like a practice.”
• “The thread connecting all three is Leonard Leo. He ran the confirmation, arranged the trip, served as the lawyer in the second episode, and built the donor relationships that reach the third. The case is not that one billionaire bought one vote in a back room. The case is that a single operative built a standing relationship between a justice and the donors whose interests keep arriving at the Court, and the justice continues to weigh in on cases where they should be recusing.”
• “The bar grievance is the solid one. New Jersey, where Alito is admitted to practice law, holds its lawyers to Rule 8.4(d), which forbids conduct that damages the administration of justice. The test the New Jersey courts apply asks whether a reasonable person, knowing the facts, would doubt the judge’s impartiality. A six-figure undisclosed gift followed by a vote worth billions to the giver creates that doubt, and it does so no matter who arranged the seat on the plane or what was said on it. The appearance is the violation. The grievance covers all three episodes.”
• “The criminal referral is the more difficult one, and I will not pretend otherwise. New Jersey’s bribery statute, 2C:27–2, makes it a felony for any person to accept a benefit as consideration for a vote in a judicial proceeding, and the New Jersey Supreme Court confirmed in 2023 that the statute reaches anyone who meets its elements, with no exemption for federal officers. Proving consideration is the demanding part, because it requires showing that Alito understood, when he accepted the benefit, that it was tied to his conduct on the bench. That is why the referral is built around Suncor and made conditional. If Alito steps aside before the vote, the referral falls away. If he sits and votes on a case where Singer holds a near two billion dollar stake, after taking Singer’s gift and ruling for Singer once before, while the conflict sits under public scrutiny, he cannot credibly claim ignorance, and the conduct becomes present and provable rather than a matter of reconstructing what he was thinking in 2008.”

“Law firm Fenwick agrees to pay $54 million in settlement over FTX work” —

• “Prominent U.S. law ‌firm Fenwick & West, which advised FTX before its 2022 blockbuster ‌collapse and bankruptcy, on Friday said it will pay $54 million to resolve claims from FTX ​customers who alleged the firm helped enable one of the largest financial frauds in U.S. history.”
• “A preliminary settlement was filed on Friday in the federal court in Miami, Florida, and will require approval by ‌a judge.”
• “Silicon Valley-founded ⁠Fenwick, known for its work for technology clients, was a lead outside law firm for FTX as the exchange ⁠rose to prominence as one of the largest crypto platforms in the world. Fenwick ‘helped to craft and implement strategies that facilitated FTX’s fraud,’ plaintiffs alleged.”
• “Fenwick in a statement on Friday said it ‘was not aware of the fraud at FTX, stands by the integrity of its legal work, and disputes wrongdoing of any kind, as we have consistently stated ‌throughout this matter.’ The firm, which employs ​more than 500 lawyers, said ‘we look forward to ​putting this matter behind ​us’ and focusing on its business.”

“Insider trading case exposes gaps in law firm security” —

• “An insider-trading scheme unveiled this week by federal prosecutors in Boston laid out what looked like the perfect crime of opportunity. Corporate lawyers allegedly mined internal law‑firm systems for deal secrets and tipped accomplices to earn tens of millions of dollars off well‑timed trades.”
• “Based on the information in the indictments, the insider tips the lawyers gleaned didn’t require breaking through any doors, physically or metaphorically: they had access by virtue of working at ​the law firms. The sprawling scheme includes 30 defendants and has ensnared some of the most elite law firms in the country, including Latham & Watkins; Wachtell, Lipton, Rosen & Katz; and Goodwin Procter. The law firms haven’t ‌been accused of wrongdoing and are considered victims by prosecutors.”
• “One could argue that no internal security system can guard against every bad actor, but law firms have reason to know better at this point. Reading the indictment, it struck me that I’ve seen versions of this scam before — many times.”
• “Over the last dozen years, several well-known corporate law firms have been embroiled in similar insider-trading scandals involving information employees nabbed from internal databases. Those cases should have served as a wake-up call for law firms that they needed to do more to secure their internal systems.”
• “In the days of banker boxes full of documents, locked conference ​rooms kept files secure, and law firms trusted their partners to uphold their ethical duties to clients. Law firms have invested heavily in security in recent years, in part out of fears of cyberattacks. That doesn’t always help, however, when the ​threat comes from inside.”
• ‘The reality is you cannot really eliminate insider risk or access to sensitive data,’ said Avi Sambira, a director at cybersecurity firm Sygnia. While a stray document on a printer or ⁠overheard watercooler chatter can always be a risk, the biggest internal vulnerability these days stems from who has permission to access internal documents housed on law firm servers. Cybersecurity professionals and lawyers I spoke to said law firms have grown more sophisticated over the last ​decade in how they restrict such data, often granting permission matter-by-matter rather than more broadly to everyone who shares a client or practice group.”
• “‘Firms having access to something doesn’t mean everyone should have access equally,’ said Devon Ackerman, an executive at cybersecurity firm LevelBlue. Instead, he ​said, permissions should be granted on a ‘need-to-know’ basis.”
• “A pair of indictments and a related Securities and Exchange Commission civil case filed this week suggest that lawyers determined to access insider information can find gaps in the system.”
• “The scheme spans a decade and centers around Nicolo Nourafchan, a deal lawyer who worked at Sidley Austin, Latham & Watkins and Goodwin Procter. Notably, prosecutors allege he repeatedly obtained access to documents related to sensitive M&A deals that he was not assigned to work on, including a draft merger agreement, diligence review tracker, timeline and signing checklist.”
• “Prosecutors say he even accessed documents 10 days after he was ​terminated from what the indictment calls Law Firm B, while on a leave of absence from Law Firm C, and on the day he turned in his firm-issued laptop at a firm.”
• “In one telling detail, ​the SEC complaint alleges that in 2018, Nourafchan told a co-conspirator that ‘he searched the system using key words and viewed documents in preview or read-only mode so as to minimize any electronic trail of his access to the files.’ Nourafchan’s co-conspirators at one point marveled at the ‘genius’ of his ‌going into deal ⁠work at large firms, to help enable the trades, according to court filings.”
• “For law firms, setting tight restrictions on internal documents can be tedious, requiring hundreds of individual permissions to be granted and constantly monitored. Looking for anomalies in who is opening documents is tricky, cybersecurity professionals said, but AI and other technology is continually evolving to help.”
• “Everyone I spoke to stressed that even with state-of-the-art technology and protocols, human behavior can be hard to outwit. ‘You can’t have a completely foolproof system no matter what steps you take,’ said Stephen Frank, a former securities fraud prosecutor now at Quinn Emanuel Urquhart & Sullivan, speaking generally and not about the new case. Law firms ⁠undoubtedly try to avoid ​such incidents, Frank said, because when breaches happen, ‘those are a lot of very uncomfortable conversations to be having with clients.'”

“Exclusive: Acting AG Todd Blanche was told last year to recuse from Justice Department matters involving Trump” —

• “It was less than two weeks after Todd Blanche took on his role of deputy attorney general in March 2025 when the Justice Department’s top ethics lawyer delivered some straightforward yet inconvenient news: His recusal from legal cases that involved President Donald Trump in his personal capacity was necessary.”
• “The official conducting the briefing, Joseph Tirrell, handed Blanche and his then-top deputy Emil Bove, who was also in the conference room, a printed PowerPoint presentation on ethics, according to a former senior Justice ethics official who described the meeting to CNN.”
• “The meeting, which hasn’t previously been reported, is the first time Blanche was formally informed he would need to recuse himself from cases involving Trump. Around the same time, the department’s top career lawyer advised that Bove potentially had a conflict of interest by being involved in firings of DOJ lawyers.”
• “Recusal, however, is a word that comes with treacherous consequences in the Trump era — including in the case of former Attorney General Jeff Sessions who Trump tormented after he recused himself from overseeing what eventually became the Mueller investigation. Blanche’s choice is either to oversee investigations the president cares deeply about but risk damaging their viability in court or to recuse himself and risk incurring the president’s wrath.”
• “Now serving as acting attorney general, Blanche finds himself in an ethical quandary. His previous role representing Trump in criminal prosecutions brought by the Justice Department means that he is switching sides, overseeing the department’s investigation of the former government officials whom Trump claims unfairly used the criminal justice system to target him. “
• “That includes some who were connected to the prosecutions of Trump for mishandling classified records in Florida after his first term, and allegedly conspiring to overturn his loss in the 2020 presidential election. Blanche was Trump’s primary defense lawyer in both federal court cases, which were dismissed prior to being fully resolved in court.”
• “Blanche signed the department’s ethics pledge laid out to him by Tirrell, according to the former ethics official who spoke to CNN and a document submitted to the Office of Government Ethics. That pledge included requirements for Blanche to not participate for at least a year in any of the department’s matters involving past clients of the Blanche Law Group, the small private law firm Blanche used to represent Trump in the criminal cases. The department’s regulations also prohibit his participation ‘in any criminal investigation or prosecution if he has a personal or political relationship’ with anyone who was involved in or has an interest in that investigation or prosecution. “
• “A Justice Department spokeswoman said Wednesday that Blanche is complying with ethical obligations.”
• “The potential conflict is more acute now that Blanche has installed Joe diGenova, a former US attorney for DC, to reinvigorate an investigation into what diGenova has outlined as a broad conspiracy against Trump spanning from the 2017 Russian election interference probe to the aborted Special Counsel Jack Smith prosecutions that ended in 2024.”
• “DiGenova is based in Fort Pierce, Florida, a federal court with few major criminal cases aside from Trump’s. Among those targeted for possible prosecution is John Brennan, the former CIA director — a top priority for Trump in his efforts to prosecute his political foes. Brennan denies wrongdoing. Last week, a spokesperson told CNN Blanche had not recused himself from the investigation into Brennan, which the department has repeatedly declined to comment on.”
• “‘It was typical in past administrations for senior officials to solicit advice,’ especially when conflicts of interest were a close call, Benjamin Grimes, the former deputy director of DOJ’s Professional Responsibility Advisory Office, said recently.”
• “The conflicts of interest aren’t uncommon.”
• “During the Biden administration, Deputy Attorney General Lisa Monaco recused herself from investigations of President Joe Biden’s alleged mishandling of classified documents, which didn’t result in charges, and an investigation of Hunter Biden. Monaco had served in the Biden transition team and during the Obama administration worked closely with the vice president. An internal memo recorded her recusal but wasn’t made public.”
• “During the George W. Bush administration, Attorney General John Ashcroft recused himself from the investigation into the leak of former CIA operative Valerie Plame’s identity. He cited his close political relationship with President Bush and other top administration officials who would be potential witnesses in the probe.”
• “But the Justice Department during the second Trump term has broken with many past institutional norms, including the traditional separation between the White House and the department.”
• “In his first press conference as acting attorney general, Blanche notably remarked, ‘I love you, sir,’ to Trump.”

“Quinn Emanuel Just Got a $3 Million Ethics Lesson. A Judge Made Them Write It Themselves” —

• “On Tuesday, Judge Edward M. Chen of the US District Court for the Northern District of California dropped a $3 million sanctions order on Quinn Emanuel stemming from the firm’s representation of Natera Inc. in a pharma advertising case, and the opinion is the kind of reading that should make every partner at that firm put down their coffee and stare at the wall for a while.”
• “The conduct of the firm and its litigation team, Chen wrote in adopting a special master’s recommendation, ‘implicates a culture of lawyering that is deeply disturbing.’ Not a rogue associate. Not an isolated lapse in judgment. A culture. ‘At virtually every juncture in this misadventure,’ Chen wrote, ‘these attorneys turned a blind eye to the truth, deliberately failed to exercise diligence, violated their duties of candor to the Court, and then attempted to justify it — without basis.'”
• “So what exactly happened at Quinn? Judge Chen opens his sanctions order not with dry legal findings, but with a narrative — a detailed, almost novelistic account of a mid-level associate at ‘a well-recognized law firm’ navigating a cascade of ethical failures over the course of a year. It reads like a Professional Responsibility exam hypothetical. At the end of four pages, he pulls back the curtain: ‘This is not a Professional Ethics issue spotter. These are the facts of Quinn Emanuel’s conduct in the instant litigation.'”

“Canada’s Revised AML Framework: Sweeping Penalties And Compliance Requirements” —

• “Having received royal assent on March 26, 2026, Bill C‑12, the Strengthening Canada’s Immigration System and Borders Act, has significantly reshaped Canada’s anti‑money laundering (‘AML’) landscape. The bill established higher monetary penalties and stricter compliance requirements by, among other things, amending the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (the ‘PCMLTFA’) and enhancing oversight by the Financial Transactions and Reports Analysis Centre of Canada (‘FINTRAC’). Indeed, entities and individuals now face heightened penalties and more stringent requirements, while, at the same time, enrolment obligations have been extended to a broader range of parties. Below, we will discuss some of the most prominent updates being implemented.”
• “Unprecedented penalties. Further to our commentary dated July 15, 2025 regarding Bill C-2, several of the amendments initially contemplated therein were restated in Bill C‑12. In fact, one of the most anticipated changes was the increase of administrative monetary penalties (‘AMPs’) to forty times their previous levels, as can be seen in the table below: ”
  Violation Class Old Maximum Penalty New Maximum Penalty. Minor CA$1,000 CA$40,000. Serious CA$100,000. CA$4,000,000. Very serious CA$500,000 CA$20,000,000.”
• “Similarly, the maximum penalty for a violation has gone from $100,000 to $4,000,000 if the violation is committed by a person, and from $500,000 to $20,000,000 if the violation is committed by an entity. Consequently, the financial burden of a penalty has significantly increased and ensuring compliance has become increasingly pressing.”
• “Bill C-12 has also imposed a more stringent requirement with respect to the establishment by entities of a compliance program. In fact, the bill requires the entities to put in place a compliance program which is ‘reasonably designed, risk-based and effective’. In practical terms, FINTRAC would no longer limit its oversight to the formal existence of a compliance program, but would scrutinize its effectiveness and its likelihood of achieving meaningful compliance outcomes.”

“FinCEN Proposes New Rules for AML Whistleblower Incentives and Protections” —

• “The Financial Crimes Enforcement Network (FinCEN) recently published a notice of proposed rulemaking (NPRM) titled ‘Whistleblower Incentives and Protections.’ The proposal implements 31 USC § 5323 as amended by the Anti-Money Laundering Act of 2020 (AML Act) and the AML Whistleblower Improvement Act of 2022, establishing procedures for submitting tips, applying for awards and obtaining confidentiality and anti-retaliation protections. The NPRM represents a significant step toward operationalizing a program that Congress authorized over five years ago, and it carries meaningful practical implications for financial institutions.”
• “Scope: Beyond the BSA.”The proposed program would cover potential violations of the Bank Secrecy Act (BSA) and certain sanctions-related statutes – including the International Emergency Economic Powers Act, the Trading with the Enemy Act and the Foreign Narcotics Kingpin Designation Act (the Kingpin Act). FinCEN also positions the program as supporting enforcement of the US Department of the Treasury’s (Treasury) Outbound Investment Security Program and the US Department of Justice’s (DOJ) Data Security Program where those matters fall within the scope of the covered statutes. The broad statutory reach means that potential whistleblowers are not limited to traditional AML scenarios – sanctions compliance failures and related conduct are squarely within scope.”
• “Awards: 10-30%, with a presumption of maximum for smaller cases”
• “A ‘covered action’ is defined in the NPRM as a Treasury or DOJ judicial or administrative action that is successfully enforced and results in monetary sanctions exceeding $1 million. Awards would be paid within a statutory range of 10-30% of collected monetary sanctions in covered and related actions, with awards paid from the Financial Integrity Fund.”
• “A key tension: The 120-day waiting period for compliance and audit personnel”
• “One of the most consequential provisions for financial institutions is the proposed 120-day waiting period. Certain individuals – including officers, directors and partners who learned information through internal reporting processes, and employees whose principal duties involve audit or compliance (including those at firms retained to perform audit or compliance functions) – would be required to wait at least 120 days after obtaining the information before submitting it to FinCEN to remain award-eligible. FinCEN’s stated rationale is to preserve incentives for robust internal compliance programs and to give entities time to review, remediate and voluntarily disclose issues, while minimizing harm from delayed reporting.”
• “For institutions, this window creates both an opportunity and an obligation. Companies should anticipate how their internal reporting, triage and escalation processes will operate within that 120-day period, and should ensure that appropriate remediation and voluntary disclosure mechanisms are in place to take advantage of it.”
• “FinCEN also proposes that no person may impede an individual from communicating directly with Treasury or DOJ about possible violations, including by discouraging, hindering or delaying such communications.”
• “Rights and remedies under the proposed rule would be nonwaivable – including through pre-dispute arbitration agreements, which would be invalid and unenforceable to the extent they require arbitration of a dispute arising under 31 USC § 5323 or the implementing regulation.”
• “Comments on the NPRM are due by June 1, 2026. Covered entities and other interested parties should consider submitting comments to help shape the final rule.”

“Gibson Dunn announces release of the International Comparative Legal Guide – Anti-Money Laundering 2026” —

• “Gibson Dunn is pleased to announce with Global Legal Group the release of the International Comparative Legal Guide – Anti-Money Laundering 2026. Gibson Dunn partners Stephanie L. Brooker and M. Kendall Day are the Contributing Editors of the publication, which covers issues including criminal enforcement, regulatory and administrative enforcement, and requirements for financial institutions and other designated businesses. The Guide, comprised of 4 expert analysis chapters and 16 jurisdictions, is live and FREE to access HERE.”

“A day in the life of the Law Society’s anti-money-laundering unit”

• “The Law Society’s dedicated anti-money-laundering unit is housed within the Regulation Department, where all AML matters are dealt with by a single team. Mary Hallissey acts a bit shady”
• “Solicitors who provide AML-regulated legal services must comply with certain statutory obligations that apply to how solicitors both manage their AML compliance requirements within their practices and their mandatory obligation to report suspicions of money-laundering to the relevant authorities.”
• “In 2023/2024, the Law Society took the strategic decision to set up a dedicated AML unit housed within its Regulation Department, where all AML matters relating to regulation, education, and external-stakeholder engagement are dealt with by a single team, with input from colleagues in Financial Regulation and Regulatory Legal Services.”
• “Ciara McQuillan and Riona Leahy are both AML executives and solicitors in this new unit.”
• “Ciara points out that a single rulebook is emerging for anti-money-laundering – and the majority of the EU AML Regulation will have direct effect in all EU member states, including Ireland.”
• “These requirements will include: A directly applicable EU regulation creating a more harmonised ‘single rulebook’ for preventive controls; A new directive that updates how national systems, FIUs, and supervisors operate; and A regulation establishing the EU Anti-Money-Laundering Authority.”
• “Separately, EU criminal-law measures continue to harmonise money-laundering offences and sanctions across member states.”
• “Customer due diligence (CDD) will become more prescriptive, with firms expected to apply more standardised checks and follow clearer, more detailed rule-sets than under many current national approaches.”
• “In practical terms, CDD will require the collection of more information, supported by more robust documentation, and a clearer evidential trail showing how identity, beneficial ownership, and the purpose and nature of the relationship were assessed.”
• “Firms should also expect a stronger emphasis on consistency of outcomes, record-keeping, and being able to demonstrate compliance – not just that checks were performed.”
• “In terms of the forthcoming changes to the regulations, Ciara explains: ‘Solicitors are now required to seek much stronger proof of identification from new clients, such as passports, along with proof of nationality and proof of birthplace. Solicitors must also verify more than one source of client identification, with many more data points to be collected, before starting to deliver any AML-regulated legal service – particularly, but not solely, those concerning real estate.'”
• “She points to the Register of Beneficial Ownership as an indicator of the beefed-up obligations to declare interests.”
• “The Law Society’s Regulation of Practice Committee and Conveyancing Committee together recently published guidance for solicitors in this arena. The consequences for solicitors who fail to comply are grave, including a potential risk to livelihood and professional reputation.”
• “Not only do solicitors have obligations to comply with AML legislation to ensure that their practices cannot be used as conduits to launder illicit funds but, additionally, they have an obligation to submit a suspicious transaction report (STR) to FIU Ireland and to Revenue if a suspicion arises of an offence of money-laundering or terrorist-financing. Failure to comply with this obligation is a criminal offence.”
• “In addition, she cautions that ‘solicitors should be particularly on the lookout for social-welfare fraud or tax fraud, where substantial funds may get laundered through a property transaction’.”
• “AML risk assessments should now be deeply embedded in business-risk assessments in every law firm, they stress. While minor compliance infringements are dealt with by the Law Society on a practical, case-by-case basis – with the focus on educating rather than heavy-handed sanctioning – failure to comply with the AML regulations is serious, not just with the Law Society as supervisor, but in terms of a criminal-offence element.”
• “Firms who fail to demonstrate that they have sufficient measures in place to mitigate risk, and that they have been applying those measures, may find themselves subject to an external AML audit, issued with a formal direction to take certain action or, at the most serious end of the non-compliance scale, could be referred to the Legal Practitioners Disciplinary Tribunal.”
• “It’s not enough to have a beautifully written suite of business-risk assessments, policies, controls, and procedures in place in a practice if the contents of them are not being applied by the solicitor on the files, advises Ciara. It is also crucially important that the reasons that a solicitor assesses risk in relation to a transaction in a certain way is fully documented.”
• “Ciara and Riona also point to the potential reputational damage to a law firm if, for instance, it is linked to a Criminal Asset Bureau investigation.”