Wall Street

Bear Stearns BSC Above the Law blog.jpgWith JPMorgan quintupling its offer for Bear Stearns earlier this morning, it seems like an appropriate time to discuss last week’s ATL / Lateral Link survey, which asked you whether you were afraid the recent Bear Stearns collapse would hurt your career.
Twenty-seven percent of you said yes. New Yorkers were the most concerned, with roughly one third of respondents opining that the Bear Stearns collapse would hurt their careers. A quarter of respondents in Los Angeles and Atlanta and a fifth of respondents in Washington, DC said the same. In Boston and Philadelphia, seventeen percent of respondents were afraid the Bear Stearns event would hurt their careers, while in the Bay Area, the number fell to an unlucky thirteen percent. Respondents in Chicago, Dallas, and Houston were generally unafraid.
Concern was most pronounced among the newest lawyers and those closest to partnership. Twenty-eight percent of respondents in the Class of 2007, and thirty percent of respondents in the Classes of 2000 and 2001 were afraid that the Bear Stearns collapse would hurt their careers. A whopping fifty percent of respondents who graduated before 2000 shared this concern. Law students are also more likely to be frightened, with 43% of law students responding that they were afraid that the Bear Stearns event will hurt their careers.
Additional discussion, including selected comments from survey respondents, after the jump.

double red triangle arrows Continue reading “Featured Job Survey: A Bears Market?”

As we can see from the comments, you’re already all over this NYT story. We linked to it in Morning Docket, but here’s a little more. Andrew Ross Sorkin writes:

Wachtell Lipton Rosen Katz WLRK AboveTheLaw Above the Law blog.jpgJPMorgan and Bear were prompted to renegotiate after shareholders began threatening to block the deal and it emerged that several “mistakes” were included in the original, hastily written contract, according to people involved in the talks.

One sentence was “inadvertently included,” according to a person briefed on the talks, which requires JPMorgan to guarantee Bear’s trades even if shareholders voted down the deal. That provision could allow Bear’s shareholders to seek a higher bid while still forcing JPMorgan to honor its guarantee, these people said.

When the error was discovered, James Dimon, JPMorgan’s chief executive, who was described by one participant as “apoplectic,” began calling his lawyers at Wachtell, Lipton, Rosen & Katz to seek a way to have the sentence modified, these people said. Finger pointing over the mistakes in the contracts began as bankers blamed the lawyers and vice versa.

We don’t have much to add to Ted Frank’s excellent observations. Here’s an open thread for anti-Wachtell schadenfreude.
(They’re big boys — and they send their clients big bills. So the WLRK folks can take a little snark and ribbing from the ATL commentariat.)
Update (11:40 AM): Actually, did Wachtell make a mistake? If so, what exactly was their error? Over at Dealbreaker, our colleague John Carney wonders: “How do you ‘inadvertently include’ a provision everyone is talking about?” (Gavel bang: commenter.)
How Do You Inadvertently Include A Provision Everyone Is Talking About? [Dealbreaker]
The dangers of doing an M&A agreement over a weekend [Overlawyered]
Did Mistakes in the JPM-Bear Contract Help Lead to Renegotiation? [WSJ Law Blog]
JPMorgan in Negotiations to Raise Bear Stearns Bid [New York Times]

McKee Nelson LLP AboveTheLaw Above the Law blog.jpgAn interesting article in today’s New York Times — by Lynnley Browning, author of the earlier Biglaw perks piece — focuses on the subprime mortgage mess and current investigations into the adequacy of disclosures to investors.
Investigators are focused on Wall Street, but lawyers involved in the securitization process may also face scrutiny. Government investigation is the last thing these struggling law firms need, as they try to retool in the face of a grim outlook for structured finance and real estate work.
The article focuses on McKee Nelson:

McKee Nelson burst onto the scene in 1999 and quickly grabbed lucrative Wall Street work from long-established rivals. William F. Nelson, one of its co-founders, said the firm, which is known for its sophisticated tax work, did not employ any special legal maneuvers to outflank its competitors. “There’s no secret, magic elixir that we sprinkled,” Mr. Nelson said.

In any case, the mortgage turmoil is now hitting the highly regarded McKee Nelson hard. The firm recently pared its structured finance department to 80 lawyers from about 115 through buyouts, sabbaticals and transfers to other departments. More cuts are unlikely, a spokeswoman said.

So that’s good news. And the firm is trying to take lemons and make the proverbial lemonade:

[A]fter profiting from the mortgage boom, McKee Nelson is now positioning itself to profit from the bust by riding the coming wave of lawsuits. In January, the firm flew its partners and their spouses to Charleston, S.C., aboard four Delta commuter jets, to map out its strategy.

“We’re heavily committed to doing more litigation,” Mr. Nelson said. The firm hopes to represent investment banks, hedge funds and other financial companies, as well as their executives, in a variety of litigation, he said.

And maybe law firms, too, as lawsuits and investigations proliferate? See, e.g., Cadwalader, facing a $70 million lawsuit arising out of a securitization deal gone bad.
Small Law Firm’s Big Role in Bundling Mortgages [New York Times]

* Fed cuts fed funds rate by 0.75%, but stocks are still lower. [AP; New York Times; Washington Post]
* Clinton and Obama get snippy with each other in debate, raising questions about each other’s legal work. [Washington Post; New York Times; WSJ Law Blog]
* SCOTUS denies review in gigantic Enron-related investors’ lawsuit. [SCOTUSblog via How Appealing]
* Statutory interpretation makes for strange bedfellows in 5-4 ruling in Ali v. Federal Bureau of Prisons. [SCOTUSblog (PDF) via How Appealing]
* New York City revisits the issue of forced disclosure of calorie counts by restaurants. [AP via Drudge]

Earlier this hour, the Supreme Court handed down its eagerly anticipated ruling in the Stoneridge case. See collected links below, to posts by Lyle Denniston at SCOTUSblog and Ashby Jones at the WSJ Law Blog. The opinion itself is available here (PDF).
Lyle Denniston writes:

supreme court full frontal Above the Law.jpgThe Supreme Court, in one of the most important securities law rulings in years, decided Tuesday that fraud claims are not allowed against third parties that did not directly mislead investors but were business partnes with those who did. The 5-3 ruling came in Stoneridge Investment Partners v. Scientific-Atlanta (06-43).

Investors, the Court said, may only sue those who issued statements or otherwise took direct action that the investors had relied upon in buying or selling stock — whether that involved public statements, omissions of key facts, manipulative trading, or conduct that was itself deceptive. One impact of the decision is likely to be the scuttling of a massive $40 billion lawsuit against financial institutions growing out of the Enron scandal.

This news will be welcomed by many in the business community. But is it bad news for business litigators? Defending dubious securities fraud lawsuits may not be very sexy. But over the years, doing battle with the Milberg Weisses of the world has kept many a large law firm busy — and profitable.
With transactional work drying up, is the Supreme Court’s business-law revolution, cutting down on litigation against corporate America, coming at a bad time for Biglaw as a business?
Court limits securities fraud lawsuits [SCOTUSblog]
Stoneridge is in! Supremes Rein in Investor Suits [WSJ Law Blog]

Kiss Me I'm a Lawyer mug Above the Law blog.jpgThat’s the basic question posed by this interesting piece, currently the most emailed article on the New York Times website. After describing some of the sufferings of lawyers and doctors today, Alex Williams writes:

[I]n the days when a successful career was built on a number of tacitly recognized pillars — outsize pay, long-term security, impressive schooling and authority over grave matters — doctors and lawyers were perched atop them all.

Now, those pillars have started to wobble.

“The older professions are great, they’re wonderful,” said Richard Florida, the author of “The Rise of the Creative Class: And How It’s Transforming Work, Leisure, Community and Everyday Life” (Basic Books, 2003). “But they’ve lost their allure, their status. And it isn’t about money.”

Oh really? Tell that to the readers of ATL. Compensation coverage sends our traffic through the roof.
More discussion, after the jump.

double red triangle arrows Continue reading “Law and Medicine: Not As Cool as They Used To Be?”

Maximilia Cordero small Jeffrey Epstein Dealbreaker Above the Law blog.JPGThe story of Cordero v. Epstein — the lawsuit filed by an aspiring model against prominent Wall Street financier Jeffrey Epstein, alleging that he took advantage of her when she was underage — gets weirder by the day.
The New York Post reported that the model, Maximilia Cordero, was actually born a man — one Maximillian Cordero, b. 1983. Cordero then sued the Post, filing as an exhibit with the court a birth certificate showing she was born a female. A number of you questioned the document’s authenticity, pointing out various irregularities. And such skepticism made sense: Cordero, despite filing the birth certificate with the court, is not including the Post’s claim that she’s a transsexual in her lawsuit.
But even if it may not be the gravamen of her complaint, Cordero still wants you to know she’s not a tranny. From a statement that William Unroch, her lawyer / roommate / possible ex-boyfriend, sent to the Daily Intelligencer (via Gawker):

Ms. Cordero will be happy to attend a televised nude settlement conference or celebrity charity benefit nude tea party with Rupert Murdoch and Lucifer Carne [a reference to Post reporter Lucy Carne] if the NY Post feels this would clear up the matter. Both Ms Cordero and Mr. Murdoch can appear nude and state their positions on this matter of grave public concern.

Hmm… Time for an ATL field trip?
More insanity, after the jump.

double red triangle arrows Continue reading “Maximilia Cordero: Maybe Not a Man – and Ready To Prove It”

Maximilia Cordero small Jeffrey Epstein Dealbreaker Above the Law blog.JPGWe’re confused. And we’re guessing we’re not alone.

We have provided extensive coverage of Cordero v. Epstein, in which model Maximilia Cordero alleges that high-profile financier Jeffrey Epstein took advantage of her when she was underage. To add to the suit’s salaciousness, the New York Post previously claimed that Maximilia Cordero was born a man — to wit, Maximillian Cordero (b. 1983).

Now Cordero has turned around and sued the Post. She has filed an exhibit with the court casting doubt on the Post’s claim that she was born a man — but oddly enough, she’s not raising the gender issue in her lawsuit. From DealBreaker:

Cordero and her lawyer (and alleged sometime boyfriend) William Unroch have filed a lawsuit against the Post, claiming it engaged in a smear campaign coordinated with Epstein’s flack Howard Rubenstein (who is also the publicist for the Post).

Radar has all the dirt, but here’s the dirtiest bit:

“Conspicuously absent from the accusations is the Post’s revelation that Cordero was born a man. A source tells Radar that the initial filing of the suit by Unroch includes as an exhibit a birth certificate, which showed Cordero being born Maximilia Cordero, a woman. Reached by phone this weekend, Unroch (with Cordero commenting loudly in the background but declining to come to the phone), called the Post’s behavior ‘outrageous’ but refused to address Cordero’s birth gender or the authenticity of the birth certificate originally filed. ‘She’s a woman,’ Unroch tells Radar. So, why not go after the Post’s gender claims?

‘It’s a slam dunk case whether she was born a cat, a dog, or a space alien,’ Unroch says.”

You can see why we’re confused. And our confusion has only grown since someone sent us a copy of the exhibit mentioned by Radar — namely, a birth certificate showing that Maximillia Josephine Cordero, born on November 15, 1982, was born a “Female.”

You can check out the birth certificate for yourself — please note, we take no position on its authenticity — after the jump.

Epstein’s Accuser Accuses Page Six Of ‘Raping’ ‘Her’ All Over Again [DealBreaker]
Epstein’s Accuser Sics Law Dog On Page Six [Radar / Fresh Intelligence]

double red triangle arrows Continue reading “Maximilia Cordero: Maybe Not a Man?”

associate bonus watch 2007 law firm Above the Law blog.jpgNo, not law firm associates — associates at investment banks. In the absence of more law firm bonus news, let’s talk about your friends and classmates on Wall Street, who are still making way more money than you (assuming they haven’t been laid off; hey, bigger risk, bigger reward).
From Bloomberg News:

Shareholders in the securities industry are having their worst year since 2002, losing $74 billion of their equity. That won’t prevent Wall Street from paying record bonuses, totaling almost $38 billion.

That money, split among about 186,000 workers at Goldman Sachs Group Inc., Morgan Stanley, Merrill Lynch & Co., Lehman Brothers Holdings Inc. and Bear Stearns Cos., equates to an average of $201,500 per person, according to data compiled by Bloomberg. The five biggest U.S. securities firms paid $36 billion to employees last year.

Discussion continues, after the jump.

double red triangle arrows Continue reading “Associate Bonus Watch: Wall Street”

Over at Bear Stearns, the powers-that-be have blocked employees from reading our sibling site, DealBreaker. This is not surprising. Given the mass layoffs, Bear needs to keep the survivors busy.
The good news, however, is that Bear Stearns employees can still read Above the Law (although query why they’d want to). See here.
We must confess that we’re kind of jealous. Why hasn’t any law firm blocked ATL? The prospect is hard to fathom, but could it be that we’re insufficiently trashy around here?
Bear Stearns Doesn’t Hate DealBreaker, Just DealBreaker Commenters/People Talking About The Sex Going On In The Bear Stearns 14th Floor Men’s Room [DealBreaker]

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