Bressler Risk Blog

Hat tip to my IP expert colleague Chris Kave for flagging this one (make sure to read until the end): “Carpmaels & Ransford sued for missed appeal deadline” —

• “One of the UK’s leading patent attorney firms is facing a claim brought by their client, chemical company BASF. BASF is suing Carpmaels for a reported €1.05 billion, because of a missed EPO appeal deadline.”
• “The EPO has stringent criteria for allowing requests for re-establishment. Re-establishment requires a party to show that they used ‘all due care’ to meet the relevant deadline (Article 122(1) EPC) (IPKat). The requirement for ‘all due care’ to have been shown applies to the applicant/patentee, their representative, and even none European patent agents (IPKat). For the ‘all due care’ requirement to be fulfilled, patent attorney firms must show that the failure to meet a deadline was as a result of an isolated mistake in an otherwise well-functioning system (Case Law of the Boards of Appeal, III-E-5.4).”
• “The request for re-establishment was submitted by the Carpmaels patent attorney responsible for the case. The patent attorney had been a partner at Carpmaels for over quarter of a century, during which it was submitted, he “had never missed a due date for filing a Notice of Appeal or any other critical deadline before the EPO”. Shortly before the incident with the appeal deadline, the patent attorney had retired. To manage the hand-over of work, the attorney continued to take some responsibility for a certain number of cases as a consultant and only visited the office occasionally.”
• “Carpmaels argued that the missing of the appeal deadline was an isolated error in an otherwise ‘extremely reliable system.’The EPO sent the minutes of oral proceedings and the revocation decision relating to the case stapled together, with the minutes of oral proceedings in front. Importantly, it is the revocation decision that sets the appeal deadline, not the minutes of oral proceedings. The Carpmaels records department did not notice the revocation decision and thus no appeal deadline was docketed. The responsible attorneys did not notice the mistake, and it was BASF who themselves contacted Carpmaels about the appeal deadline after noticing the decision on the EP register. Carpmaels were then instructed by BASF to work on a statement of grounds of appeal. Still, however, the appeal deadline was not docketed.”
• “Importantly at the time Carpmaels was still reliant on paper files. The retired partner ultimately responsible for the case was predominantly working away from the office and relied on documents that had been emailed to him by BASF and not the physical file. The attorney therefore failed to spot that the documents received by Carpmaels from the EPO had not been processed correctly by the records department. The retired partner was also travelling at the time the appeal deadline came due and only noticed that it had been missed on his return.”
• “The Board noted the failure of the record department to cross-check the incoming mail, the failure of the attorney responsible for signing the delivery receipt to properly review the documents, and the failure of the responsible retired partner to double-check the appeal deadline whilst he was working on the statement of grounds.”
• “Carpmaels’ admit to missing the appeal deadline. Their argument in defence to BASF’s claims is that the patent was clearly invalid anyway, and that the decision of the opposition division to revoke the patent would have been upheld by the Board of Appeal. Carpmaels have therefore placed themselves in the rather unusual position of arguing against the validity of a patent they once defended.”

“Florida Supreme Court holds that an insurer may pursue malpractice claims against lawyer retained to defend the insured” —

• “Under the terms of the professional liability insurance policy, Arch Insurance Company (Arch) had a duty to defend Spear Safer in the accounting malpractice lawsuit and the insured had the right to retain legal counsel with Arch’s approval. The policy also included a subrogation provision, which stated that Arch was subrogated to all of Spear Safer rights of recovery against any person, organization, or entity, and that Spear Safer was required do whatever necessary to secure such rights.”
• “Arch retained the Kubicki Draper law firm to defend Spear Safer in the accounting malpractice action. That litigation was settled within Spear Safer’s policy limits for $3.5 million before trial. Arch then filed a legal malpractice lawsuit against Kubicki Draper, alleging that the law firm breached its duty of care by failing to timely raise a statute of limitations defense in the underlying litigation.”
• “The Florida Supreme Court agreed with the trial court and 4th DCA that defendant was in privity with Spear Safer and not Arch; however, Arch had standing to maintain a legal malpractice action against the defense counsel retained to defend its insured where Arch was contractually subrogated to the insured’s rights under the insurance policy.”
• “The opinion found that Arch’s right to contractual subrogation was expressly provided for in the insurance policy, which included claims for legal malpractice against counsel retained to defend the insured. The opinion found that where an insurer has a duty to defend and counsel breaches the duty owed to the insured, contractual subrogation permits the insurer to pursue the same claim the insured could have pursued and, since the insured was in privity with defendant, Arch could step into the insured’s shoes and pursue the malpractice claim.”
• “Bottom line: In this case, the Florida Supreme Court adopted the reasoning that a malpractice lawsuit alleging breach of care can be brought against a lawyer not only by the former client, but also by the former client’s insurer, if a duty to defend and subrogation rights are included in the policy.”

“AT&T Wants Ex-BigLaw Attys DQ’d From $450M Patent Case” —

• “AT&T on Tuesday asked a New York federal court to disqualify a former Baker Botts attorney and two former Akin Gump attorneys from representing a company that hit the telecom giant with a $450 million patent infringement suit, arguing that the lawyers previously provided extensive legal services for AT&T.”
• “According to the motion to disqualify opposing counsel, attorneys Kevin Cadwell, David Clonts and Michael Reeder worked with AT&T for more than a decade, billing nearly 25,000 hours. Cadwell alone billed nearly 13,000 hours, ‘the equivalent of working full-time for six and a half years,” AT&T said in the filing, which was heavily redacted.'”
• “‘In addition, beyond the overwhelming volume of counsel’s work for AT&T, there is substantial direct factual overlap between this case and prior cases with respect to the AT&T network systems, technology and witnesses,’ the company said.”
• “The lawyers represented AT&T in more than 100 patent infringement cases over the years, the telecom said. Reeder provided legal services for AT&T as recently as late 2019, per the motion. And Cadwell defended AT&T in patent cases as recently as 2017, it said.”
• “And the attorneys had access to AT&T’s employees, files and confidential information that makes them conflicted in the case, it added. They were also actively representing AT&T when Network Apps brought an earlier, “strikingly similar” case against AT&T in 2016, according to the motion.”
• “Cadwell, Clonts and Reeder and counsel for AT&T didn’t immediately return requests for comment Wednesday.”

“Jay-Z’s Lawyer and Damon Dash Clash Over Truth, NFTs and Conflict of Interest” —

• “On June 22, a judge sided with Roc-A-Fella Records in the label’s lawsuit against co-founder Damon Dash, filing a temporary restraining order prohibiting Dash from his alleged attempt to sell a portion of the copyright to Jay-Z’s 1996 debut album Reasonable Doubt as an NFT. The case continues to stir up drama, as Dash is now trying to disqualify Roc-A-Fella’s legal counsel.”
• “Roc-A-Fella is represented in the lawsuit by Alex Spiro, a partner at the New York office of law firm Quinn Emanuel Urquhart & Sullivan. Spiro is also Jay-Z’s personal lawyer. In court documents filed on June 25, Dash claims that Spiro is currently representing Jay-Z in shareholder governance hearings taking place at Roc-A-Fella (referred to in court documents as RAF), and that Spiro’s representation of Roc-A-Fella itself in this case therefore represents a conflict of interest.”
• “Spiro — who has also represented Meek Mill, 21 Savage and Bobby Shmurda — fired back in court documents filed on June 28, claiming that no conflict of interest exists since Jay-Z’s and Roc-A-Fella’s interests are directly aligned. A conflict of interest would only arise, he argues, if he had previously represented the opposition (meaning Dash himself).”
• “‘Dash was trying to steal RAF, Inc.’s property — to the detriment of the company and its other shareholders. Jay-Z and RAF, Inc.’s interests are therefore directly aligned,’ he writes. ‘Nor does Quinn Emanuel have ‘privileged information concerning the other side through prior representation.’ The firm has never represented Dash, and it has not represented RAF, Inc. in any matters through which it acquired any of Dash’s privileged information.'”

“Attys DQ’d For Using ‘Twisted Logic’ In Calif. Pot Co. Dispute” —

• “A California appeals court on Monday upheld a decision to disqualify a law firm involved in a multipronged dispute involving control of a cannabis cultivator, saying the lawyers used ‘twisted logic’ to justify representing multiple parties in the matter.”
• “Specifically, the appeal focused on Catanzarite’s work as counsel for shareholders in a derivative action against CTI, as well as its representation — purportedly on behalf of the same company — in another lawsuit with a lender.”
• “As described in the decision, a schism in CTI leadership led to one group of shareholders, called the Probst Faction, asserting power within the company. Attorneys from Catanzarite filed multiple lawsuits on behalf of the other group of CTI investors, called the O’Connor Faction, as well as other shareholders between 2018 and 2019.”
• “Catanzarite, which was at the time representing various disgruntled CTI investors against the company and its principals, filed counterclaims against FinCanna, purporting to represent CTI itself. According to the decision, Catanzarite attorneys apparently copy-and-pasted material from one of their derivative shareholder actions into their cross-complaint against FinCanna.”
• “‘Catanzarite appears to be arguing concurrent representation was possible because after the O’Connor Faction asserted control of the corporation, these shareholders effectively became insiders of the corporation,’ the court said. ‘This is twisted logic.'”
• “The appellate panel found that Catanzarite’s representation of investors in a derivative shareholder action against CTI was untenable while the law firm also purported to represent the company in its dispute with FinCanna.”

Hat tip to diligent reader Simon Chester (Counsel, Head – Client and Matter Acceptance Team at Gowling WLG) for sending in: “Boom Times for Lawyers as Washington Pursues Big Tech” —

• “The mounting legal and regulatory scrutiny facing Big Tech has led to a wave of lawsuits, investigations and proposed legislation aimed at ending the dominance of Amazon, Apple, Facebook and Google. Whether those efforts succeed may take years to sort out, but there is already one clear winner: the nation’s legal industry.”
• “The cost is minimal for the giant tech companies. But it has widened the divide in resources between regulators and the companies they police, making it harder for the government to recruit and keep talent to take on the industry. It has also raised fresh concerns about Washington’s revolving door, since many of the lawyers used by the tech companies recently worked for the government.”
• “In 2019, when the Justice Department searched for a lead investigator into Google and other tech giants, officials came up with a list of candidates from about 10 law firms, according to two people with knowledge of the search. But one by one, they said, potential candidates had to be crossed off the list because they already worked for Big Tech clients, leaving few options.”
• “More recently, conflicts of interest have complicated the Biden administration’s search for the head of the Justice Department’s antitrust division. Several times, critics of the industry have criticized a potential candidate because of the person’s ties to Big Tech.”
• “‘What’s striking is the number of people going to work directly for tech companies from the agencies,’ said William Kovacic, a former chairman of the F.T.C. ‘That reflects a real change.'”
• “Jonathan Kanter, a longtime antitrust lawyer who has been rumored as a possible nominee to lead the Justice Department’s antitrust division, built his career largely around working for the rivals of Google, Facebook, Amazon and Apple. His client list included both big companies like Microsoft and News Corporation and smaller firms like Yelp and Spotify.”
• “In 2016, he moved to Paul, Weiss, Rifkind, Wharton & Garrison, a prominent corporate litigation firm. But last year, Mr. Kanter’s work criticizing Big Tech started to present conflicts with other parts of the firm’s sprawling portfolio, said two people with knowledge of the matter. Specifically, his practice was at odds with work being done by Bill Isaacson and Karen Dunn, two lawyers the firm had just hired who are known to represent Apple and Amazon, said another person with knowledge of the situation.”
• “Mr. Kanter faced a choice: Drop some of his clients or leave the firm. He left. ‘Jonathan made this decision due to a complicated legal conflict that would have required him to discontinue important and longstanding client representations and relationships,’ the firm said in a note circulated at the time.”

“Recent Federal Cases Signal Increased Scrutiny of Ethical Wall Procedures” —

• “In this article, we discuss best practices for effective implementation of ethical walls in light of two recent developments—the decision by the U.S. Attorney’s Office for the Southern District of New York (S.D.N.Y.) to proactively seek a special master to review materials seized from Rudy Giuliani’s home, and the Department of Justice Antitrust Division’s recent request for a federal court to probe the adequacy of an ethical wall at the law firm of Morgan, Lewis & Bockius related to their representation of co-defendants Glenmark and Teva in a price-fixing prosecution pending in the Eastern District of Pennsylvania, which led to Morgan Lewis’s withdrawal from the matter.”
• “The other recent prominent proceeding involving ethical walls stems from a DOJ Antitrust price-fixing prosecution against Glenmark and Teva pending in the Eastern District of Pennsylvania. In that case, in connection with a conflict of interest hearing, the DOJ asked the court to assess the adequacy of ethical walls that the law firm of Morgan, Lewis & Bockius put in place as a result of its current representation of Glenmark and prior representation of Teva in the criminal matter, as well as its current representation of both companies in parallel civil cases.”
• “The DOJ requested that the court ask Morgan Lewis to submit written answers to over 40 questions about the details of its internal ethical wall procedures, including how it is staffing and managing its ethical walls in light of Pennsylvania ethical rules and how it is handling the issue of fee-sharing between attorneys working on both matters.”
• “The government also requested that Glenmark and Teva answer similar sets of questions regarding their understanding of these procedures, including whether each company had consulted with independent counsel. See id. at 3-6. Glenmark initially opposed the government’s request, noting that it was prepared to waive any conflict of interest and calling the government’s proposed requests unprecedented, ‘overbroad, intrusive, and entirely unnecessary.’ Glenmark further argued that the government ‘seems to be attempting to impose broad restrictions on Glenmark’s trial preparation and use of its chosen legal team.'”
• “This extensive inquiry, especially the questions directed to Morgan Lewis concerning its own internal procedures for implementing ethical walls, went beyond the typical Curcio hearing procedure and signals that firms may have to implement stricter procedures in certain cases to assure the government and courts of their ability to follow ethical rules and guidelines.”
• “Second, the Morgan Lewis matter provides guidance for firms looking to construct ethical walls that will withstand heightened scrutiny. In addition to taking standard precautions such as limiting information-sharing and personnel overlap, firms should consider segregating fees where circumstances may justify taking such steps, and should consider formulating specific procedures to educate and advise clients about the procedures being followed to ensure that no conflicts arise. In such cases, firms may also evaluate whether it is appropriate for clients to consult with independent counsel (as the government suggested was appropriate for Glenmark and Teva to do), and if so, how best to effectuate that process.”

“It’s Official: New Jersey Federal Courts Will Require Disclosure of Litigation Funding Arrangements” —

• “The new rule says lawyers who get financial assistance from nonparties for legal fees and expenses must disclose the funder’s name and address, whether the funder’s approval is needed for litigation or settlement decisions, and what terms and conditions apply to such approvals.”
• “Some critics have questioned the need for a rule mandating disclosure of litigation funding arrangements. But litigation funding is also facing criticism from the U.S Chamber of Commerce, which argues that such funding leads to meritless litigation, and will make settling suits more difficult.”
• “Steven Richman, chair of the subcommittee that formulated the rule, said, ‘I’m pleased with the result. Our rule strikes the balance that was needed between those who were concerned that it would open up the floodgates of disclosure, and those who felt we needed to provide certain basic information.'”
• “And Kerri Chewning, president of the Association of the Federal Bar of New Jersey, said the proposal hadn’t generated much feedback or interest among that group’s members. Chewning, of Archer in Haddonfield, who is also a member of the lawyers advisory committee, said she understood the purpose of the rule to help trial judges avoid a conflict of interest when parties in their court is using a litigation funder. A judge might own stock in a bank or other company that is affiliated with a litigation funder but trades under another name, and the rule change would make it easier to spot such conflicts, Chewning said.”

“Conflicts involving an R. Kelly lawyer arise ahead of his trial” —

• “As R. Kelly shuffles his legal team two months ahead of trial, a federal judge is weighing potential conflicts involving one of his remaining attorney’s past interactions with potential witnesses who may be involved in the trial.”
• “Kelly is awaiting US District Judge Ann Donnelly’s decision on a request from two of Kelly’s long-time Chicago-based attorneys, Steve Greenberg and Michael Leonard, to withdraw from the case. Kelly’s remaining attorneys, Thomas Farinella and Nicole Blank Becker, said in court last week that the singer had terminated Greenberg and Leonard. Donnelly in court asked to hear about concerns about alleged conflicts Becker may have before approving Greenberg and Leonard’s request to leave the case.”
• “An attorney who represented the women at one time said in a declaration filed by Greenberg and Leonard that was read in court Thursday, that Becker gave ‘legal advice’ to the women, one of whom began cooperating with prosecutors in early 2020 after severing ties with Kelly. Becker denied in court that she gave the women legal advice.”
• “Prosecutors in the hearing raised another allegation of a potential conflict by Kelly’s legal team: that an attorney helped facilitate payments to one of the women who Kelly lived with before his arrest and who may testify in his defense at trial.”
• “Federal prosecutor Maria Cruz Melendez, of the US Attorney’s Office for the Eastern District of New York, voiced concerns over the alleged payments, saying a jury may be misled into thinking that the payments incentivized the woman to testify for the defense. Becker denied ever facilitating payments to the woman on Kelly’s behalf.”
• “Donnelly said she would not discuss another alleged conflict involving Becker that was raised by prosecutors in a sealed letter to the court. Sources confirmed to CNN the matter deals with an allegation that Becker was connected to an effort to pay to silence a victim who is cooperating with the government. CNN has reached out to Becker for comment on the claim.”

“L.A. Firm Beats Costco’s Bid to Disqualify It Based on Conflict” —

• “Costco Wholesale Corp. can’t disqualify the plaintiff’s firm litigating a California woman’s slip-and-fall suit merely because one of its law clerks worked for the discount retailer’s counsel, according to a state appellate court ruling.
• “Federico Stea worked at Yukevich Cavanaugh as a law clerk while in school, and while waiting for results from the California Bar exam. During that time, he was assigned to the team of litigators handling the defense of Costco in several different cases, the company said. Yukevich left Stea and later accepted a law clerk job at the Los Angeles-based Vaziri Law Group.”
• “Stea asserted that his work at Yukevich didn’t include confidential attorney-client information and that he only performed menial tasks on Costco files. Costco failed to explain how that explanation was insufficient, Justice Judith Ashmann-Gerst wrote in the unpublished opinion.”
• “Vaziri’s screen was implemented before Stea started work—he was explicitly told he would not be working on any Costco-related cases—and included the creation of separate email distribution lists to prevent Stea from receiving Costco-related emails. There also were locked file cabinets he didn’t have access to, Ashmann-Gerst said.”

“Costco Can’t Disqualify Shopper’s Attys In Injury Case” —

• “A California appeals court has refused to disqualify attorneys representing a woman suing Costco for slip-and-fall injuries, saying a staffer working for the plaintiff’s counsel, who previously worked on similar Costco cases for defense counsel, was properly prevented from working on Costco cases.”
• “Costco had argued that because Federico Stea, a nonattorney staff member employed by Devora’s counsel, Vaziri Law Group, had previously worked for defense counsel Yukevich Cavanaugh on at least 20 Costco slip-and-fall cases, Stea possessed confidential attorney-client information that may have been disclosed in the current case.”
• “On appeal, Costco argued that plaintiff’s counsel should be disqualified because Vaziri Law Group did not implement proper ethical screening procedures before Stea was hired. The panel on Wednesday disagreed, however, saying Vaziri Law Group and Stea’s supervising attorney, David Shay, took reasonable and timely measures to implement screening. The firm told Stea before he was hired that he would not be allowed to work on any Costco cases, and the panel said ‘there would have been no rational reason to implement any other screening procedures until Stea had accepted employment,’ according to the opinion.”
• “‘These declarations, and the reasonable inferences arising from them, supported the trial court’s findings and implied findings that VLG implemented various screening procedures both before and as soon as Stea began working for VLG, and that those procedures were in fact effective in ensuring that Stea never worked on Costco matters or communicated anything he may have learned at the Yukevich firm to VLG,’ the panel said in an unpublished opinion.”

Bill Freivogel has clearly been busy with a brimming June reading list. Here are some key updates from him, shared with a hat tip and appreciation for his ongoing efforts:

• “Cantu Servs., Inc. v. Worley, No. CIV-12-129-R (W.D. Okla. June 7, 2021). Discovery dispute. In this opinion the court found that parties being represented jointly by one lawyer enjoy a common interest privilege even after the parties interests diverge. The fact that the lawyer should have recognized the conflict, but kept going, does not remove the privilege. The court then found that the discovering party had made a prima facie showing of crime/fraud requiring that the court do an in camera inspection of the disputed material. The court’s lengthy analyses of both common interest and crime/fraud appear to be good research tools.”
• “Prentice v. OfficeMax N.A., Inc., No. 13-71 (D.V.I. June 10, 2021). In this employment-related case the Rohn firm represents Plaintiffs, and the Ogletree firm represents Defendant. While with the Ogletree firm Lawyer worked on this case. He then joined the Rohn firm. The magistrate judge disqualified the Rohn firm. In this opinion the district judge affirmed, finding that the magistrate judge’s findings were not clearly erroneous. The Rohn firm delayed giving notice to the Ogletree firm for a month. Virgin Island courts follow the ABA Model Rules. Thus, the notice was not “promptly given” under Rule 1.10(a)(2)(ii). The court found other deficiencies in the Rohn firm’s screen, as well.”
• “Cicchiello & Cicchiello, LLP v. Sarris, No. HHD-CV-21-6137918-S (Conn. Super. Ct. Hartford Dist. May 19, 2021). Lawrence Connelli represents Plaintiff. The Dzialo law firm is a defendant. The defendants moved to disqualify Connelli, claiming that he represents the Dzialo firm. In this opinion the court denied the motion, finding that the Dzialo firm had hired Connelli as a testifying expert, and not as the Dzialo firm’s lawyer. The court relied primarily on Commonwealth Ins. Co. v. Stone Container Corp., 178 F. Supp. 2d 938 (N.D. Ill. 2001), which essentially held that a testifying lawyer expert does not have a client.”
• “Kimberly-Clark Corp. v. Extrusion Group, LLC, 2021 WL 2291078 (N.D. Ga. June 3, 2021). Suit by Kimberly claiming Extrusion’s infringement of Kimberly’s “‘104 patent.” There is a lot going on in this opinion. We will limit our discussion primarily to the court’s order regarding exclusion of a patent opinion. Law Firm representing Kimberly (but not in this case) had obtained a conflicts waiver from Kimberly allowing Law Firm to provide patent opinions to other clients relating to Kimberly patents. The waiver did prevent Law Firm from providing “assistance in, litigation or other disputes that are adverse to” Kimberly. One of Law Firm’s lawyers, in November 2019, provided Extrusion a non-infringement opinion relating to the ‘104 patent. This was after Kimberly filed this case and after Kimberly told Extrusion it was claiming infringement of the ‘104 patent. Thus, the court found that the opinion violated Kimberly’s waiver and ordered exclusion of the opinion and testimony relating to it.”
• “Initial Interview (posted June 9, 2021) Tex. Op. 691 (6/2021). Does a lawyer have a duty of confidentiality to prospective clients who do not become clients? Texas does not have a version of Model Rule 1.18; they’re looking at it. In this opinion the Committee has cobbled together several Texas rules to reach the conclusion that the lawyer does have such a duty. So, if Lawyer meets with W years ago to discuss a possible divorce, Lawyer probably cannot now represent H with respect to a possible divorce from W. Lawyer’s partner could not represent H either. Consents could cure some of these conflicts. We will leave it to our Texas brethren to parse the opinion and sort through how the current, oddly numbered, Texas rules relate to all this.”

“KPMG faces record fine over ‘conflict of interest’ on Silentnight sale” —

• “KPMG UK faces record fines of over £ 15 million after advising bed maker Silent Night to sell its business, despite a “conflict of interest” with the buyout fund where the accountant bought it.”
• “The significance of the findings against KPMG and its partner, David Costley-Wood, who advised Silentnight to sell, ‘sits at the top,’ although the referee can do, Richard Coleman QC of the FRC told the hearing. The referee’s decision was not published, but a draft of its key findings was read aloud by Coleman.”
• “According to Coleman, Costly Wood and KPMG weren’t considering whether their objectivity was threatened or if the interests of HIG and Silent Night could be in conflict. It turns out that the motivating factor for cheating is the ‘desire to maintain HIGH’ as a potential client.”
• “The referee also fraudulently made Costley-Wood provide false or substantially incomplete statements to Silentnight, pension trustees, pension protection funds, and pension regulators regarding the causes of Silentnight’s financial difficulties. By supporting the pension, we found that it showed a lack of objectivity. Said.”
• “KPMG was paid around £ 1.6m for its Silent Night Engagement initiative, but hearings said it has received more than £ 8.5m from companies invested by HIG and the fund since 2010. HIG continues to be interested in Silentnight, which reported a pre-tax loss of £ 888,000 from £ 133.9m in sales for the year to February 2020.”
• “KPMG resisted the FRC’s request to conduct a review of the causes of Silent Night’s illegal activity and order the company to carry out a corrective review of current procedures… In a statement, KPMG UK said: ‘The referee’s draft findings relate to restructuring work carried out over a decade ago. At the right time, we will consider these findings and options for possible appeal.'”

“KPMG faces call for record fine from British accounting watchdog” —

• “Britain’s accounting watchdog called for KPMG’s UK arm to be fined more than 15 million pounds ($21 million) on Monday over a ‘conflict of interest’ when it advised on the sale of bed maker Silentnight.”
• “‘The tribunal’s findings that the respondents lost their objectivity and dishonestly advanced, or associated themselves with, misleading statements are particularly serious and unusual,’ the Financial Reporting Council’s (FRC) executive counsel said at the hearing.”
• “‘If the respondents had properly addressed and dealt with threats to their objectivity, including the conflict of interest, they would not have been able to advise and assist both HIG and Silentnight,’ the FRC said.”
• “KPMG said the tribunal’s findings related to restructuring work performed over a decade ago and the fine being sought was ‘overly punitive’ and ‘disportionate.'”

“KPMG Faces $21 Million Fine for H.I.G. Capital Conflict” —

• “The U.K.’s audit regulator said the conflict with H.I.G. Capital LLC was “obvious” in documents prepared for a sanctions hearing Monday. The Financial Reporting Council said that KPMG “lost their objectivity and dishonestly advanced, or associated themselves with, misleading statements,” with misrepresentations repeated on eight separate occasions.”
• “The tribunal’s executive counsel also recommended that David Costly-Wood, an ex-KPMG partner who worked on the sale, face a personal fine of at least 500,000 pounds and be stripped of his membership of the Institute of Chartered Accountants in England and Wales for 15 years.”