Feb. 8 (Bloomberg) -- Rajat Gupta, the ex-Goldman Sachs Group Inc. director accused of giving inside information to fund manager Raj Rajaratnam about that company and Procter & Gamble Co., may face additional allegations he passed tips, prosecutors said.
Federal prosecutors, at Gupta’s arraignment on revised charges yesterday, also told U.S. District Judge Jed Rakoff of a second “insider at Goldman Sachs” who provided Rajaratnam with information.
Prosecutors disclosed in a Feb. 3 letter “certain witness statements related to an insider at Goldman Sachs, a company that provided information to Mr. Rajaratnam, that did not relate to Goldman and or Procter & Gamble,” Rakoff said during the hearing as he read the Feb. 3 letter aloud. Gupta was a director at Procter & Gamble.
Gupta’s lawyer, Gary Naftalis, had previously asked the government to share any evidence that Rajaratnam had an inside source at Goldman Sachs other than his client. The defense lawyer has said the evidence may be used to show that the other source is the culprit, not Gupta. Rakoff has also pressed prosecutors to identify the purported source, whom he called “Mr. X.”
Gupta, 63, pleaded not guilty yesterday to a revised indictment filed last week. The latest charges broaden the prosecutors’ description of the insider-trading scheme, saying it began in March 2007, not in 2008, as the U.S. alleged when Gupta was first charged in October.
Naftalis said that with the new allegations, they need more time to prepare for trial. Rakoff agreed to postpone until May 21 from its scheduled start date of April 9.
“What the government is doing here now is wildly expanding what everybody in the world believed the case to be about,” Naftalis said, adding later, “I really think it’s quite unfair. They can investigate my client ‘til the cows come home.”
Assistant U.S. Attorney Reed Brodsky told the judge the government may file yet another superseding indictment adding new allegations that Gupta passed tips.
The judge told lawyers that with six additional weeks to get ready for trial, no further delays will be allowed, “barring an act of God.”
“My goal is to get this show on the road in a way that’s fair to all concerned,” he said.
Prosecutors said that even if the judge doesn’t allow them to further revise the indictment, they may still seek to introduce evidence at Gupta’s trial of other acts of alleged wrongdoing.
Naftalis declined to comment on yesterday’s hearing after court.
Gupta, who denies wrongdoing, faces as long as 20 years in prison if convicted of any of the securities fraud charges and as long as five years if convicted of conspiracy, U.S. Attorney Preet Bharara in Manhattan said. He also faces a fine of as much as $5 million, prosecutors said.
Rajaratnam, who was convicted by a jury last year of insider-trading charges, is serving an 11-year prison term.
The case is U.S. v. Gupta, 11-cr-00907, U.S. District Court, Southern District of New York (Manhattan).
For more, click here.
Four Accused of Running Insiders’ ‘Criminal Club’ Indicted
Four men arrested last month for allegedly participating in a “criminal club” of inside traders that reaped almost $62 million from Dell Inc. shares were indicted by a federal grand jury in Manhattan.
One trade earned a $53 million illegal windfall for Level Global Investors LP co-founder Anthony Chiasson and his fund, Manhattan U.S. Attorney Preet Bharara alleged. The ring, which involved five hedge funds and investment firms, is the largest identified by the U.S. to date tied to a single stock, federal authorities said.
Chiasson; Todd Newman, a portfolio manager formerly at Diamondback Capital Management LLC; Jon Horvath, a hedge fund analyst in New York; and Danny Kuo, a fund manager for Whittier Trust Co. in South Pasadena, California, were all named yesterday in an indictment filed in federal court in New York. They were charged in total with one count of conspiracy to commit securities fraud and nine counts of securities fraud.
After a federal grand jury returned the indictment, the case was assigned to U.S. District Judge Richard Sullivan.
Illegal profits earned from the scheme were almost of the same “magnitude of fraud we proved in the Galleon Group insider trading scheme,” Bharara said.
A five-year insider-trading probe by Bharara’s office and the Federal Bureau of Investigation in New York called “Perfect Hedge” has resulted in charges against 63 people, said Janice Fedarcyk, head of the FBI’s New York office.
More than 50 have pleaded guilty or been convicted after trial since 2009, including Galleon Group LLC co-founder Raj Rajaratnam, who is serving an 11-year prison sentence.
Three men who were charged in the scheme to illegally trade in Dell stock have pleaded guilty and are cooperating with the U.S. -- Jesse Tortora of Diamondback; Spyridon “Sam” Adondakis, a Level Global analyst; and Sandeep Goyal, a former Dell employee, according to Bharara and court records.
The criminal case is U.S. v. Newman, 12-cr-121, U.S. District Court, Southern District of New York (Manhattan). The civil case is Securities and Exchange Commission v. Adondakis, 12-409, U.S. District Court, Southern District of New York (Manhattan).
BNP Paribas Wins Dismissal of Unauthorized Trades Lawsuit
BNP Paribas SA’s wealth management unit won dismissal of a lawsuit filed by Nitine Jantilal, a former client who claimed the bank made unauthorized trades leading to a shortfall in his account.
Jantilal sued the bank in 2009 over allegations that a S$1.1 million ($883,000) reduction in his account was due to the bank’s breaches. The Indian national had made two of his relatives co-signatories of his account and claimed he was unaware of trades based on instructions from them, Singapore High Court Judge Choo Han Teck said in a ruling yesterday.
Jantilal “assumed the risk of making his relatives authorized signatories. He cannot now say that he did not authorize them,” Judge Choo said. BNP Paribas “executed the specific asset transactions and swap transactions with the proper authority.”
The decline in asset value in Jantilal’s account was due to trades made by his authorized signatories and market fluctuations, according to the ruling.
K. Muralidharan Pillai represented the bank.
The case is Nitine Jantilal v. BNP Paribas Wealth Management S1048/2009 in the Singapore High Court.
States With Highest Foreclosure Rates Among Bank Deal Holdouts
California, New York, Nevada, Florida and Massachusetts are among the states that haven’t signed off on a settlement with banks over foreclosure abuses, according to state officials and two people familiar with the talks.
The holdouts include some with the highest rates of foreclosures. More than 6 percent of Nevada housing units had at least one foreclosure filing in 2011, the nation’s highest rate, according to RealtyTrac. California was third-highest with more than 3 percent, said the firm, which tracks foreclosures.
California Attorney General Kamala Harris and New York Attorney General Eric Schneiderman, who have been among the most outspoken in pushing for changes to the accord, were among those who hadn’t joined as of a Feb. 6 deadline. More than 40 states signed on, said Iowa Attorney General Tom Miller, who is helping to lead talks with the banks.
“Adding more numbers probably improves the political dimension of the settlement from the standpoint of the attorneys general,” said Ken Scott, a Stanford University law professor. “If you can say there were only a handful of diehards that didn’t sign on, that gives you some political protection.”
All 50 states announced almost 16 months ago they were investigating bank foreclosure practices following disclosures that faulty documents were being used to seize homes. Officials from states and federal agencies, including the Justice Department, have since negotiated terms of a proposed settlement with five banks that is said to be worth as much as $25 billion.
Massachusetts Attorney General Martha Coakley and Florida Attorney General Pam Bondi hadn’t joined as of yesterday, said the two people, who declined to be identified because the matter isn’t public. Delaware and Nevada also hadn’t agreed to the settlement as of Feb. 6, according to their offices.
Miller said federal and state officials continue to discuss the proposed deal and its terms with the banks.
Bank of America Corp., JPMorgan Chase & Co. and Wells Fargo & Co. made a last-minute demand that New York drop claims filed against them Feb. 3 as a condition of the settlement, a person familiar with that case said. The push by the three banks raised an obstacle in getting Schneiderman’s support for the deal, said the person.
New York sued Bank of America, JPMorgan and Wells Fargo in state court in Brooklyn, saying their use of a mortgage database known as MERS led to improper foreclosures.
Dani Lever, a spokeswoman for Schneiderman, declined to comment on the demand by the banks over the MERS lawsuit. Schneiderman, who was scheduled to make remarks on the settlement talks yesterday, postponed the conference call indefinitely, according to a statement.
Mark Rodgers, a spokesman for New York-based Citigroup; Tom Goyda of San Francisco-based Wells Fargo; Tom Kelly, a spokesman at New York-based JPMorgan; and Gina Proia of Detroit-based Ally Financial declined to comment on the proposed settlement terms.
“We’re interested in finding a path forward with a comprehensive settlement that benefits homeowners and communities,” said Dan Frahm, a spokesman for Charlotte, North Carolina-based Bank of America, declining to comment further.
For more, click here.
News Corp.’s Times Mislead U.K. Court About Computer Hacking
News Corp.’s Times newspaper in London misled a court and lawyers for a police officer who suspected his e-mail account had been hacked by a reporter, editor James Harding told a media inquiry.
“In the last couple of weeks, I’ve learned a great deal more about what happened in this incident,” Harding told the inquiry that was set up in response to the phone-hacking scandal at News Corp.’s now defunct News of the World. “I sorely regret the intrusion.”
Reporter Patrick Foster hacked into officer Richard Horton’s e-mail in May 2009 to expose him as the writer of an unauthorized “Nightjack” blog about police work. Lawyers for Horton, to prevent the story from being published, raised the possibility that the e-mail had been illegally accessed.
Foster told his editor and the newsroom’s lawyer who advised him to continue to pursue the story through legitimate means and told Horton’s counsel that his identity was revealed through deduction, Harding said.
The Metropolitan Police Service is investigating the Times over e-mail hacking, Labour party lawmaker Tom Watson said in an e-mail last week. The paper is the third News Corp. title in London to come under suspicion in related probes of phone hacking, computer hacking and bribes to police officers. The scandal erupted in July after revelations that the News of the World accessed messages on a murdered schoolgirl’s mobile phone.
Foster didn’t immediately respond to an e-mail.
For more, click here.
UBS Says Swiss Regulator Granted Immunity in Libor Investigation
UBS AG said it was given immunity from a second antitrust regulator as part of an investigation into whether the London Interbank Offered Rate, or Libor, was manipulated.
The bank has conditional immunity from the Swiss Competition Commission regarding submissions for Yen Libor, Euroyen Tokyo Interbank Offered Rate, or Tibor, and Swiss franc Libor rates, the bank said in a regulatory filing yesterday. UBS was granted similar immunity by the U.S. Department of Justice in regards to Yen Libor and Euroyen Tibor because it is cooperating with the probe, the Zurich-based bank said last year.
UBS won’t be prosecuted, fined, or face other sanctions from the Swiss regulator if it continues to cooperate, it said. The regulator said last week that it was investigating 12 banks, including UBS and Credit Suisse Group AG, over how the benchmark for about $350 trillion of financial products is set.
The U.S. Securities and Exchange Commission, the U.S. Commodity Futures Trading Commission, the Justice Department, Japan’s Financial Supervisory Agency and the U.K. Financial Services Authority are investigating whether there were attempts to manipulate Libor rates. European Union antitrust regulators are also examining Libor rates.
For more, click here.
Google Removes Search, YouTube Content on Indian Court Order
Google Inc. removed content from its India domains that was deemed objectionable by a New Delhi district court after a civil lawsuit against the owner of the world’s largest search engine.
The material was blocked from India search results, YouTube, Blogger and the social-networking site Orkut, said Gaurav Bhaskar, a spokesman for Google India. The content was deleted from domains .in and .co.in, while remaining accessible from other countries, Bhaskar said yesterday. Google can’t take down content that appears on websites owned by other companies and individuals, he said.
India is stepping up scrutiny of Internet postings and mobile communications as it tries to eliminate provocative comments and curb discord between religious groups. The Hindu-majority South Asian country is home to more than 138 million Muslims, comprising about 13 percent of the world’s second-largest population.
“This step is in accordance with Google’s long-standing policy of responding to court orders,” the company said in an e-mailed statement yesterday.
The statement didn’t provide details about the lawsuit or the content that was removed, and Bhaskar didn’t elaborate.
The order follows a civil complaint filed by Mufti Aijaz Arshad Quasmi, an Indian activist who seeks the removal of videos and images that could be seen as offensive to Muslims, his lawyer Santosh Pandey said yesterday.
For more, click here.
Raytheon Executive Fined in $1 Billion FAA Contract Lawsuit
A Raytheon Co. executive was fined by a Washington court for failing to give opponents in a lawsuit a reprimand letter stemming from an affair with a subordinate while both worked at the Federal Aviation Administration.
Charles E. Keegan, leader of Raytheon’s Civil Aviation Solutions division, violated a court order to turn over to Washington Consulting Group Inc. the document showing he had an improper romantic relationship with the woman, Judge A. Franklin Burgess Jr. of the District of Columbia Superior Court ruled Feb. 7.
For the past two years, Washington Consulting Group, or WCG, has argued that the relationship began at the FAA, and continued after Keegan left for Raytheon and Maureen Knopes, now Keegan’s wife, became responsible for a contracting program to train air traffic controllers. WCG held the contract for more than 20 years until Raytheon won it in 2008.
The Bethesda, Maryland-based company is seeking $1 billion in damages from Raytheon and Keegan, claiming the relationship contaminated the bidding process on the 10-year contract. Keegan and his wife, now Knopes-Keegan, conspired with others to reconfigure the FAA’s contracting program and stole WCG’s trade secrets to ensure Raytheon would take the business, the lawsuit claims.
“Though it is faced with conflicting evidence as to whether Keegan’s failure to produce the reprimand letter was inadvertent or intentional, the court reaches the same conclusion in either case,” the judge said, ordering Keegan to pay a portion of legal fees to opposing counsel.
The couple’s romance was investigated by the Transportation Department’s inspector general. In 2004, a top FAA official reprimanded Keegan in a letter for having an “inappropriate relationship” that created a “perception of favoritism” and the appearance of “giving preferential treatment” to Knopes-Keegan, according to the judge’s ruling.
The letter wasn’t disclosed to WCG until Keegan was being interviewed in the case in December. Keegan said in court filings that the document was found in a box in his basement that contained work papers along with a weather dial and a runner’s bib.
“These rulings are unrelated to the merits of the case,” Jon Kasle, a spokesman for Waltham, Massachusetts-based Raytheon, said in an e-mail. “Raytheon continues to maintain that WCG’s suit is without merit,” he said, adding that the company is reviewing the rulings and will defend itself and Keegan.
Steven Thomas, a lawyer for WCG, said in an e-mail the ruling means Raytheon “now must face public scrutiny of its misconduct.”
The case is Washington Consulting Group Inc. v. Raytheon Technical Services Co. LLC, 10-00296, Superior Court of the District of Columbia (Washington).
For more, click here.
For the latest lawsuits news, click here.
Hong Kong Regulator Says It Should Be Able to Redress Investors
Hong Kong’s securities regulator, whose attempt to ban New York-based hedge fund Tiger Asia Management LLC last year from trading was blocked by a court, said it should have the right to redress investors.
“If private individuals can seek civil remedies, why does the SFC have to wait?” Benjamin Yu, a lawyer representing the Securities and Futures Commission, told Hong Kong’s Court of Appeal yesterday.
The regulator is trying to overturn a court ruling that it lacks the power to unwind Tiger Asia’s transactions in the market and ban the hedge fund and employees from trading in Hong Kong before proving insider trading allegations in a tribunal or criminal court.
The SFC alleges the hedge fund traded on inside information from bankers arranging placements of China Construction Bank Corp. and Bank of China Ltd. shares in 2008 and 2009, pocketing HK$38.5 million ($4.9 million). Tiger Asia, which has no employees and physical presence in Hong Kong, denied the allegations in an Oct. 12, 2010 letter to investors.
The legal battle, which both the SFC and Tiger Asia’s founder Bill Hwang have pledged to take to Hong Kong’s top court, will determine whether the agency can sue independently for relief without working through government departments to bring a criminal case or civil inquiry. Tiger Asia’s lawyers argue the regulator can’t use a provision for freezing assets to bring its own lawsuit against them.
“It was never intended that the SFC should have an unchecked ability to seek a contravention of market misconduct,” Charles Sussex, representing Tiger Asia and its officers, argued before the court yesterday.
Criminal proceedings or a civil tribunal inquiry “are not preconditions to investors taking action,” said Judge Robert Tang from the bench yesterday. “If small investors don’t have to wait, why should the SFC have to wait?”
The three appeals court judges reserved their judgment and will hand down their decision at a later date.
The case is Securities and Futures Commission and Tiger Asia Management LLC, Sung Kook Hwang Bill, Raymond Park, William Tomita, CACV178/2011 in the Hong Kong Court of Appeal.
Some Stanford Assets Were Profitable, Ex-CFO Tells Jurors
R. Allen Stanford’s businesses collapsed in part because the stock market imploded and a court-appointed receiver destroyed much of the companies’ value after they were seized by the government, Ex-Stanford Financial Group Co. finance chief James M. Davis told jurors.
Davis, testifying yesterday for the government under a plea deal at Stanford’s federal court trial in Houston, was shown a letter he wrote shortly after regulators seized Stanford’s companies in February 2009.
“There was from the start never a thought to put the clients in harm’s way in this process, never a hint of criminal intent,” Robert Scardino, a lawyer for Stanford, read from the letter, which Davis said he wrote to an attorney he was trying to hire to defend him at the time.
“The underlying global business growth model remained strong,” Davis wrote in the letter, adding that some of Stanford’s businesses were moving toward profitability.
“Isn’t that 180 degrees opposite from what you’ve been telling this jury?” Scardino asked Davis. “You said these companies had no value.”
Davis responded, “A number of the companies Stanford owned were growing; they were worth something.” The 2009 letter “could be true under certain circumstances,” he said.
The former finance chief told jurors he changed his mind a month after writing that letter, when he met with his current attorney, who persuaded him to seek a plea deal. “But at the time I was still lying,” he said of the letter. “I was still in the middle of it.”
Davis’s testimony may bolster Stanford’s defense that he never intended to defraud investors of $7 billion through what the government says was a Ponzi scheme built on bogus certificates of deposit at Antigua-based Stanford International Bank.
Stanford’s lawyers claim accountants were in the process of consolidating companies the financier funded with $2 billion in secret bank loans onto the Antiguan bank’s portfolio when regulators stepped in and stopped the process.
The criminal case is U.S. v. Stanford, 09-cr-00342, U.S. District Court, Southern District of Texas (Houston). The SEC case is Securities and Exchange Commission v. Stanford International Bank, 09-cv-00298, U.S. District Court, Northern District of Texas (Dallas).
For more, click here.
For the latest trial and appeals news, click here.
Acer Sues Former Chief Lanci Over Non-Compete Clause
Acer Inc. sued former president and chief executive officer Gianfranco Lanci in an Italian court seeking damages for breach of a non-compete clause, the Taipei-based company said in an e-mailed statement yesterday.
Lanci left Acer last year after helming the company for more than six years. Rival Lenovo Group Ltd. in September announced he would join the company as a consultant, and last month named him head of its newly-created Europe, Middle-East and Africa unit.
Acer Chairman J.T. Wang and Lanci met March 28 last year to agree on the terms of the Italian’s departure after they couldn’t resolve disagreements over the company’s future direction, Wang said in a May interview. Lanci’s resignation was announced three days later, exposing a feud between the two sides over product strategy and internationalization of the Taiwanese company. Lanci confirmed accounts of that meeting in a separate interview.
“We believe Mr. Lanci has breached his non-compete measures agreed into willingly by both parties when he left Acer,” the company said in yesterday’s statement. We are taking legal action against him in order to protect Acer’s rights and interests.’’
Calls to Lanci’s Italian mobile phone and e-mail to his personal account weren’t answered.
For the latest new suits news, click here. For copies of recent civil complaints, click here.
JPMorgan Reaches Tentative Settlement in AFTRA Pension Suit
JPMorgan Chase & Co. and the American Federation of Television and Radio Artists Retirement Fund reached an “agreement in principal” to settle a suit claiming losses from the bank’s securities lending program.
The settlement is to be announced on the plaintiffs’ website, according to a statement provided yesterday by Stephanie Cirkovich, a spokeswoman for the federal court in Manhattan, where the AFTRA fund filed its suit.
“The parties are drafting a formal settlement agreement, to be submitted to the court for approval within approximately three weeks,” according to the statement. “The settlement terms will remain confidential until the agreement is submitted to the court. The settlement is subject to the court’s approval and to certain other conditions.”
The fund sued in 2009, claiming it lost money that New York-based JPMorgan invested for it in medium-term notes issued by Sigma Finance Corp., a structured investment vehicle that collapsed in 2008.
The case is Board of Trustees of the AFTRA Retirement Fund v. JPMorgan Chase Bank NA, 09-cv-686, U.S. District Court, Southern District of New York (Manhattan).
California Gay Marriage Ban Ruled Unlawful by Appeals Court
California’s voter-backed Proposition 8 law declaring marriage to be only between a man and a woman was ruled unconstitutional by a federal appeals court.
The San Francisco-based court, ruling 2-1, yesterday upheld the 2010 decision of a federal court judge who said the measure violated constitutional equal protection rights of same-sex couples. That ruling came in the first federal trial over whether it’s legal to ban marriage by gays and lesbians.
“The people may not employ the initiative power to single out a disfavored group for unequal treatment and strip them, without a legitimate justification, of a right as important as the right to marry,” the U.S. Court of Appeals said in its ruling.
Proponents and advocates of Proposition 8 had appealed the decision of U.S. District Judge Vaughn Walker in San Francisco. They argued that that the measure, which was approved by 52 percent of California voters in 2008 after the California Supreme Court legalized gay marriage, reflected the traditional definition of marriage and furthered the state’s interests in “responsible procreation.”
The appeals court yesterday kept in place its earlier order putting Walker’s ruling on hold. Proposition 8 proponents said they will continue their court battle to uphold the measure and hope to win in the U.S. Supreme Court.
“We are not surprised that this Hollywood-orchestrated attack on marriage -- tried in San Francisco -- turned out this way,” Brian Raum, an attorney for proponents and senior counsel at the legal group Alliance Defense Fund, said in an e-mail. “But we are confident that the expressed will of the American people in favor of marriage will be upheld at the Supreme Court.”
“Every pro-marriage American should be pleased that this case can finally go to the U.S. Supreme Court,” Raum said.
Carla Hass, another attorney for the Proposition 8 proponents, said her clients were deciding whether to petition for a rehearing of the case before a larger panel of appeals court judges, or petition the Supreme Court for review without delay. An immediate appeal to the high court would allow for a hearing during the nine-month term that starts in October.
The appeals court in San Francisco could decide on its own to rehear the case before more judges, Hass said in a phone interview.
The cases are Perry v. Brown, 11-17255 and 11-16577, U.S. Court of Appeals for the Ninth Circuit, San Francisco.
For more, click here.
GlaxoSmithKline Among Companies Paying $25 Million to State
Actavis Group HF and Merck & Co. Inc.’s Schering-Plough were among five companies that paid a total of $25.2 million to settle claims that they overcharged Louisiana for drugs for low-income patients.
The two companies and Boehringer Ingelheim GmbH, Dey Pharma LP and GlaxoSmithKline Plc resolved civil claims that they inflated drug prices to get larger reimbursements from the state’s Medicaid program, Louisiana Attorney General James “Buddy” Caldwell said yesterday in an e-mailed statement. The state claimed the companies misreported average wholesale prices for the drugs.
Louisiana has sued more than 100 drug companies, accusing them of fraud and violating the state’s unfair trade practices and consumer protection law. The statement didn’t specify the amount that each company is paying.
Representatives of GlaxoSmithKline, Actavis, Boehringer Ingelheim and Dey Pharma didn’t immediately return phone calls. Ron Rogers, a spokesman for Merck, didn’t have an immediate comment.
Fourteen Hospitals Reach $12 Million False Claims Accord
Fourteen hospitals in New York and six other states agreed to pay more than $12 million in total to settle allegations that they submitted false claims to Medicare, the U.S. Justice Department said.
Four hospitals affiliated with Adventist Health System/Sunbelt Inc. in Florida will pay the largest sum, $3.9 million, according to an e-mailed statement by the Justice Department. Plainview Hospital in Plainview, New York, will pay $2.3 million, the largest single hospital payment, the agency said.
The settlement resolves civil claims that the hospitals overcharged Medicare for eight years starting in 2000 for the cost of performing kyphoplasty procedures, which treat spinal fractures due to osteoporosis. In total, more than 40 hospitals have paid at least $39 million to settle such overbilling claims, the Justice Department said.
“By recovering taxpayer dollars lost to improper billing, this settlement will help support the vital public health care programs we depend on,” Assistant Attorney General Tony West said in the statement.
The settlements follow a 2008 whistle-blower lawsuit brought under the False Claims Act by two men who had worked for Kyphon Inc., a maker of surgical equipment. The men, a former regional sales manager and an ex-reimbursement manager, will collect a total $2.1 million from the settlements.
Plainview Hospital, which is part of the North Shore-Long Island Jewish Health System, said in a statement that the dispute concerned “technical billing allegations,” and it denied violating the law.
“Settlement without any admission of liability avoids the significant costs and distraction of litigation against the government,” the hospital said. Representatives of Adventist Health System didn’t immediately respond to phone calls seeking comment on the settlement.
For the latest verdict and settlement news, click here.
Rajaratnam Judge Announces Departure in Press Release
The U.S. judge who sentenced Raj Rajaratnam to 11 years in prison for insider trading after a trial where he often closed proceedings and sealed files used a public relations firm to announce he was quitting the bench.
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 court spokeswoman 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.”
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.
Holwell said he wanted to finish that ruling before leaving the bench, along with a decision in a securities case against Vivendi SA 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.
Holwell spent more than 30 years as an attorney with White & Case LLP in Manhattan before President George W. Bush appointed him to the federal bench in 2003.
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.
To contact the reporter on this story: Elizabeth Amon in Brooklyn, New York, at email@example.com.
To contact the editor responsible for this story: Michael Hytha at firstname.lastname@example.org.