“Judge Dismisses Legal Mal Suit Against Cozen O’Connor for Second Time” —

• “A federal judge has again dismissed a legal malpractice suit against Cozen O’Connor after an appeals court determined the district court improperly analyzed the plaintiff’s complaint the first time around.”
• “The plaintiffs, Adam Potter and Moxie HC, filed suit against Cozen O’Connor in 2020 over an alleged conflict of interest in selling several companies in which the plaintiffs owned 100% membership interest.”
• “According to the Thursday opinion, then-Cozen O’Connor attorney Anne Blume advised Potter on the sale of his companies to another firm client. Potter claimed that Blume denied the existence of a conflict of interest surrounding the firm’s representation of both the buying and selling entities in the transactions.”
• “After the deal’s close, however, the shareholders allegedly learned their company had been sold substantially below market value, and that confidential information Blume learned while working with Potter had been used to aid the purchaser.”
• “The plaintiffs alleged they ‘have suffered millions of dollars in damages, representing the difference in the true value of the companies and the purchase price stated in the asset purchase agreement, a price that was negotiated by Blume.'”
• “But Alejandro ruled that because the terms of the asset purchase agreement stated the companies were to receive the purchase price, an allegedly unfair sale would harm the companies themselves. As shareholders, Alejandro held, the plaintiffs did not suffer direct harm and therefore did hot have standing to sue.”
• “‘The only damages that plaintiffs attribute to defendants’ alleged misconduct is the diminution of the amount of money (i.e., the purchase price) received under the asset purchase agreement by the non-party companies in consideration of the sale of their assets,’ she wrote.”
• “Alejandro dismissed the amended complaint in January 2021 for lack of subject-matter jurisdiction. Still, the U.S. Court of Appeals for the Third Circuit ruled that the analysis had been improper.”

“The Corporate Lawyer Moonlighting as a New York Assemblymember” —

• “Keith Brown makes $142,000 representing his Long Island district — and about half a million representing corporate real estate interests.”
• “He often takes big corporate clients, including a Wegman’s and a Marriott franchise. Since shortly before his election in November 2020, he has been the attorney of record for another warehouse landlord suing a town in a neighboring district over truck traffic rules. He filed a document in the case as recently as last month. His firm’s website lists Brown’s client as ‘the largest owner of industrial warehouse space on the East Coast.'”
• “New York lawmakers are officially part-time employees; they are permitted to earn outside income, and there is no indication that Brown has broken state ethics laws. In an email to New York Focus, Brown denied any impropriety.”
• “‘I take seriously the rules of the Legislature and there is absolutely no conflict of interest associated with this project,’ he wrote, referring to the warehouse development at issue in the September meeting. ‘My role is to provide legal services related to local zoning laws on the AIREF Logistics Center.'”
• “The developer Brown was representing at the September meeting was Ares Management, a global investment firm with a large real estate portfolio, which includes warehouses. Through a subsidiary, the firm is seeking to build a 500,000-square-foot distribution center in North Bellport, on Long Island’s south shore.”
• “It’s not clear whether, or how, Brown’s legal work has influenced his efforts in Albany. Of the 39 bills he’s introduced so far, none bear any immediate connection to commercial real estate interests.”
• “Blair Horner, executive director of the New York Public Interest Group, said lawmakers earning outside income have made efforts to “insulate” their business practices from their work in Albany, particularly since corruption charges brought down former Assembly Speaker Sheldon Silver and Senator Dean Skelos in 2015. But the wall is often thin, he said, underscoring the need for strict restrictions on outside income. Whether a lawmaker like Brown faced a formal conflict of interest or not, Horner added, ‘it would at minimum be a bad look.'”

“Plaintiff Lawyers Ask Finra To Build Database of Ejected Arbitrators” —

• “The Public Investors Advocate Bar Association is pushing for more transparency around how arbitrators are selected in the Financial Industry Regulatory Authority forums by providing public explanations when arbitrators are substituted due to a conflict of interest.”
• “The plaintiff lawyer-membership organization wants Finra to create a database that would include an explanation about why challenges to proposed arbitrators based on conflict-of-interest allegations succeeded or failed.”
• “‘​​Such release would provide helpful precedents for future parties to consider in evaluating potential arbitrators,’ PIABA’s President Hugh Berkson made the suggestion in a February 1 comment letter to the Securities and Exchange Commission.”
• “PIABA’s suggestion comes in response to Finra’s proposal in December to refine its arbitration-selection procedures. Names of specific arbitrators could be redacted for privacy reasons, Berkson wrote.”
• “Finra’s audit committee had in February 2022 tapped Lowenstein Sandler, LLP, to review its arbitration processes after allegations arose in a Georgia state court case about an improper side deal that allowed a lawyer representing Wells Fargo to rig the regulator’s arbitrator selection process. The Lowenstein report rejected those allegations, but recommended Finra provide ‘greater clarity’ to its arbitration process.”
• “Under the Finra proposal, which the SEC still has to bless, Finra would codify its existing practice of using both an algorithm and ‘conducting a manual review for conflicts of interest prior to sending an arbitrator list’ to disputing parties, it said in its filing.”