“Lawyer Charged With Insider Trading Wants to Subpoena Ex-Firms” —

• “A former Big Law attorney accused of feeding an insider trader ring with confidential client information signaled plans to subpoena the law firms he allegedly exploited.”
• “Nicolo Nourafchan filed a motion Wednesday in Massachusetts federal court to issue three subpoenas to law firms whose private client files he allegedly misappropriated from 2013 to 2023. Federal officials announced charges in May against Nourafchan along with 29 others for participating in a scheme to make trades based on private information about company transactions.”
• “Sidley Austin, Latham & Watkins, and Goodwin Procter may have to disclose their protocols for safeguarding client information, along with the specific material the former associate allegedly misappropriated to facilitate stock trades, should Nourafchan succeed with his motion.”
• “The demand hints that Nourafchan’s defense may seek to incorporate specific information about what records he allegedly accessed and when he accessed them. His lawyer Martin Weinberg also wants to review training for associates regarding their level of access to client files to which they aren’t assigned.”
• “‘The requested materials are necessary to refute the government’s inference that such access was undertaken to obtain confidential information for unlawful tipping,’ the motion states.”
• “His motion asks for legal authority to demand the law firms turn over client information allegedly used to trade stocks and the security protocols used to prevent unauthorized access. The motion also seeks to obtain the firms’ correspondence with federal law enforcement agencies investigating and prosecuting the insider trading defendants.”
• “‘The requested materials go directly to the government’s theory of the case,’ Weinberg wrote. ‘They will also show whether reviewing documents from unassigned matters was unusual or instead consistent with ordinary associate training, research, and drafting practices.'”
• “Weinberg went on to state that ‘because these issues bear directly on whether Mr. Nourafchan obtained and misused material nonpublic information as alleged, the defense requests production sufficiently in advance of trial to permit meaningful review and preparation.’ “

“US sanctions Greece-, Panama-based law firm over aid to Iranian shipping” —

• “The US Treasury Department imposed sanctions on Wednesday on Karnakis & Karnakis, a law firm based in Greece and Panama, saying it had for years provided legal assistance to Iranian shipping networks.”
• “The US Financial Crimes Enforcement Network also issued an administrative subpoena to advance an investigation into a Greek bank over potential ties to Iran, according to a Treasury statement, which did not name the bank.”
• “FINCEN also issued requests for information to six other European banks that it did not name over relationships with Iranian financial institutions under US sanctions. ‘Whether you are conducting illegal oil transfers at sea or sitting in the corner office of a law firm, if you are supporting the Iranian regime, we will find you and sanction you,’ Treasury Secretary Scott Bessent said in a release.”
• “State Department spokesman Tommy Pigott said Karnakis & Karnakis for years ‘set up shell companies to hide the true owners of vessels carrying Iranian oil, petrochemicals, and steel.’ He said the firm created companies that served as fronts for networks selling millions of barrels of Iranian oil to benefit the Islamic Revolutionary Guard Corps Quds Force and the Houthis. Karnakis & Karnakis did not immediately respond to a request for comment. Treasury also imposed sanctions on Singapore- and UAE-based shipping agents that it said directly aid Iranian shadow fleet operations.”
• See also: “Greece to impose sanctions on Iran-linked law firm, following US measures“

“Anthropic’s Ambitions in Legal Technology Get a Reality Check” —

• “It was billed as a ‘fireside chat,’ but law-firm innovation leaders had high hopes for a private meeting with Anthropic’s new head of Claude for Legal at a convention in Nashville, Tenn.”
• “The presentation from Robert Mahari — just a few weeks into his new role at Anthropic at the time — underscored to some law firms that the company, despite its industry-leading AI models and world-altering potential, is still just a 5-year old startup figuring out how to sell its products. It’s trying to enter a market where many lawyers have developed trust in AI products made by legacy platforms or startups like Harvey.”
• “‘They need to wake up,’ one of the people in the room said of Anthropic. ‘They do need to hear that we’re not impressed.'”
• “Forty-four percent of firms are using or exploring using Claude, tied with Thomson Reuters CoCounsel and trailing only Microsoft’s Copilot as the most popular AI tool among firms, according to a survey published last month by the International Legal Technology Association. But Anthropic hasn’t yet converted the high interest into long-term customers. Among the firms using or exploring Claude, just 7% said they had fully rolled it out to attorneys.”
• “All that colored how the law firm leaders received Mahari’s presentation, according to interviews with five people who attended the meeting and were granted anonymity to describe a closed-door discussion.”
• “‘It landed awkwardly in a room full of people who are trying to see if they can actually deploy Claude and are under pressure from their stakeholders,’ an attendee said.”
• “Law firms often negotiate some privacy and data security terms in their contracts with software vendors. Different firms have different risk tolerances, which they incorporate through negotiations with vendors.”
• “Anthropic, one meeting attendee said, is not far off the pace on the privacy terms it included in its base contracts. But he said his firm often negotiates privacy terms, and Anthropic isn’t willing to do that.”
• “Another meeting attendee said he balked at giving Claude access to email, because the system could then potentially access data from clients who don’t want their information in AI tools. The same person also took issue with Anthropic’s decision not to offer zero data retention policies for its Fable 5 model.”
• “Some firms have accepted Anthropic’s terms, deciding that Claude meets their safety standards. Ogletree Deakins has been running a pilot with Claude since February. Timothy Fox, the firm’s chief data and AI officer, said it has ownership over the data that goes into Claude and the answers it spits out.”
• “Despite the success, Fox said, ‘it is not a product that is geared for legal, and so they don’t design their enterprise security like a legal platform would. And so legal vendors are great because they know what a law firm is looking for.'”
  “He’s willing to be patient as Anthropic learns the industry and adds more functions for lawyers. Fox, like other innovation leaders interviewed for this story, said Anthropic was still in the early days of developing products for the legal industry, and that it had only recently attracted the attention of major firms.”
  “‘We give them some grace and some credit,’ he said.”
  “Anthropic is swaggering into the legal market as both top dog and underdog.”
  “As top dog, it has raised more than $100 billion, built an industry-leading reputation for Claude, and is eyeing a $2 trillion valuation in a forthcoming IPO planned for mid-November, Bloomberg News has reported.”
  “Those advantages were reflected in that private meeting in August, where innovation chiefs were excited that a company with Anthropic’s reputation is investing in legal work. Despite their misgivings about the meeting, some of the attendees who spoke with Bloomberg Law said they were still interested in paying for Claude—if it stands out from tools they’re already paying for.”
  “Some law firms use enterprise tools developed by Harvey or Legora alongside subscriptions to Claude or ChatGPT Enterprise that attorneys can use for quick queries. Whether firms believe they need both is an open question.”
• “‘The primary takeaway from that meeting was that unlike a lot of other legal tech vendors, there was a strong sense that we as an industry probably don’t rate significantly high on Anthropic’s universe of expected revenue, and therefore the level of attention that we would get as an industry is relatively low,’ one meeting attendee said.”
• “Bigger firms may have the resources to implement Claude themselves, but smaller firms lack the resources to do that, said Alex Finkel, chief innovation officer at Offit Kurman. Firms like his are looking for vendors that provide pre-built workflows, trainers and AI experts. Anthropic is still in the process of building that infrastructure, Finkel said.”