Risk Update

Conflict Allegations Compounded — Ongoing Breach Accusation (Casino Matter), Fraud Finding (FIFA Fight)

Posted Dan Bressler

We previously noted this “pinky promise” conflict fight. Here’s the latest: “Alleging ‘Ongoing Breaches,’ Gaming Company Seeks to Expand Lawsuit Against Eckert Seamans” —

  • “However, the amended complaint disputes those arguments and seeks to allege that Stewart and Skjoldal further ‘arranged’ for the Harrisburg firm Hawke McKeon & Sniscak to act as conflict counsel for Parx Casino so the attorneys could continue ‘surreptitiously directing the representation of Parx Casino’ against Pace-O-Matic’s interests.”
  • “Specifically, the gaming company alleged the lawyers drafted court filings, encouraged participation of the casino gaming regulatory agency and advocated for legal theories and strategies for Parx Casino.”
  • “‘In addition to covertly advocating against POM in relation to the Commonwealth Court litigation, Eckert, Mr. Stewart and Mr. Skjoldal actively encouraged criminal, administrative, regulatory and legislative actions against POM and POM games, both while Eckert was representing POM and after that representation ended,’ the amended complaint said.”
  • “Along with raising a breach of duty claim, the amended complaint also seeks to add a fraud claim against the firm.”

“Robbins Geller DQ Doesn’t Muddy Investor Law, 2nd Circ. Told” —

  • “A Mexican media company urged the Second Circuit on Wednesday to uphold an order disqualifying Robbins Geller Rudman & Dowd LLP from securities litigation stemming from the FIFA corruption scandal, saying the firm’s ‘sky-is-falling’ arguments are just an attempt to distract from its alleged ethical violations.”
  • “Grupo Televisa SAB said Robbins Geller has exaggerated the precedential effects of a New York federal judge’s finding that the firm committed ‘fraud’ on the court by failing to disclose short positions held by Colleges of Applied Arts and Technology Pension Plan, the former lead plaintiff in a certified securities class action over bribes Grupo Televisa allegedly paid to FIFA officials.”
  • “Robbins Geller warned in its June appeal that requiring institutional investors to disclose all their third-party investments would throw securities litigation into disarray. But Grupo Televisa said these arguments conveniently skirt around the real reason for the firm’s disqualification: that it allegedly lied to the court for more than a year about CAAT’s investment portfolio.”
  • “U.S. District Judge Louis L. Stanton removed CAAT as class representative in June 2020 after it came to light that the investment fund, which claimed to have lost $986,000 in Grupo Televisa’s alleged stock drop, in fact gained $11 million from shares it held in a Canadian hedge fund that had shorted the stock.”
  • “Judge Stanton then disqualified Robbins Geller in May after finding that the firm had been aware of CAAT’s short positions all along without telling the court. The firm appealed, arguing with the help of legal titans like David Boies and a group of pension funds that filed an amicus brief that the ruling would ‘cripple’ the ability of institutional investors to serve as lead plaintiffs in securities cases.”
  • “But Grupo Televisa said Thursday that the facts belie those arguments. In the year since Judge Stanton’s initial order booting CAAT, the media company said, no issues or uncertainties tied to third-party investments have arisen in other lead plaintiff battles.”