The judge who sentenced Raj Rajaratnam to 11 years in prison for insider trading after a trial in which he often closed proceedings and sealed files used a public relations firm to announce his resignation.
Richard Holwell, 65, revealed his departure yesterday in a press release advertising the creation of his new Manhattan law firm, Holwell Shuster & Goldberg. The announcement was circulated by Hellerman Baretz Communications LLC.
In response to a question last week on reports he planned to leave the judiciary, Holwell said he told a spokeswoman for the U.S. District Court in Manhattan that it’s not his practice “to talk about my future plans.”
“I gave the chief judge a heads-up a week or two ago,” Holwell said yesterday in an interview, referring to U.S. District Judge Loretta Preska. “I didn’t think it was appropriate to ask the court to issue a press release,” Holwell said. “I thought I should be the guy to do it.”
Mary Beth Pratt, a Philadelphia-based law firm consultant, said a judge issuing his own press release is an unusual move that is nevertheless within the bounds of ethics rules.
“It’s standard operating procedure for lawyers today,” Pratt said in an interview. “What makes this different is that he’s a judge on such a major case setting up his own shop.”
The announcement comes a day after Holwell published his last ruling in the Rajaratnam case, a 39-page opinion giving the reasons for how he calculated the applicable federal sentencing guidelines. The hedge fund manager’s sentence was the longest in U.S. history for insider trading.
Finish the Ruling
Holwell said he wanted to finish that ruling before leaving the bench, along with a decision in a securities case against Vivendi SA (VIV) and another denying a request to block toll increases on New York-area bridges and tunnels. His new firm opened yesterday, according to the press release.
During the Rajaratnam trial, Holwell sealed at least 38 documents filed with the court. He also held secret hearings about matters including Rajaratnam’s emergency foot surgery, which caused the defendant to miss part of the jury deliberations. He declined a request to be interviewed before the trial began.
Prosecutors argued that the public had a First Amendment right to see papers he had sealed about the Galleon Group LLC co-founder’s medical condition. Rajaratnam, who has diabetes, cited his health in arguing for leniency in sentencing. Holwell later unsealed some of the material.
A section of the press release announcing his departure from the bench listed notable matters handled by the lawyers forming Holwell Shuster. It put the Rajaratnam case at the top.
Holwell spent more than 30 years as an attorney with White & Case LLP (1116L) in Manhattan before President George W. Bush appointed him to the federal bench in 2003. The New York-based law firm also refused to comment about him before the Rajaratnam trial.
Holwell’s new firm includes Michael Shuster and Daniel Goldberg, lawyers he practiced with at White & Case. Holwell Shuster & Goldberg plans to represent clients in complex commercial, securities, antitrust and bankruptcy litigation, according to the press release.
“When you get out of law school you think, gosh, I’d like to form my own firm,” Holwell said. “I hope this will be a good third career.”
On the same day Holwell announced his departure, Weil, Gotshal & Manges LLP said that another figure from the Rajaratnam case, Christopher Garcia, will join the firm as a partner. As chief of the Securities and Commodities Fraud Task Force in the Manhattan U.S. Attorney’s office, Garcia supervised the prosecution of Rajaratnam and others charged in the government’s investigation of insider trading at hedge funds.
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