5 Things You Need To Know About Biglaw Partner Evan Greebel's Arrest
What must you know about Evan Greebel, and the case against him, to be an up-to-date guest at your next holiday cocktail hour?
By now you’ve heard about the Biglaw partner, Evan Greebel, who got arrested along with former pharma kingpin/most hated man in America Martin Shkreli for securities fraud. In the legal world, Greebel’s arrest is in some ways a bigger deal than Shkreli’s. But what do we really know?
A corporate partner at Kaye Scholer, focusing on mergers and acquisitions, corporate finance, and securities law, Greebel had previously worked at Katten Muchin Rosenman for a dozen years. New details are coming out fast and furious (like the fact he still gets to vacay in Mexico this holiday), and it is a lot to keep up with along with all your normal end-of-year stresses. So here are 5 facts you must know about Evan Greebel, and the case against him, to be an up-to-date guest at your next holiday cocktail hour.
1. Does this guy still have a job?
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Though Martin Shkreli was quick to resign from his position as CEO of Turing Pharmaceuticals (and got fired from KaloBios Pharmaceuticals), Greebel has not, as yet, committed professional seppuku. Yes, I know, you can’t find his bio on the Kaye Scholer website anymore — but as the American Lawyer reports, he still has his job:
Greebel’s biography page and other mentions of him on Kaye Scholer’s website were taken down Friday afternoon, but a spokeswoman for the firm said that he had not resigned or been fired.
Which isn’t to say he’d be a welcomed face at the Kaye Scholer holiday party — both his current firm and his former firm, Katten Muchin Rosenman (where he worked when the alleged criminal activities took place), are conducting internal investigations.
2. Shkreli may be getting ready to throw Greebel under the bus.
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As we reported in our original post on Greebel’s arrest, Martin Shkreli made some comments earlier this year on Investors Hub that may hint at a possible defense:
Every transaction I’ve ever made at Retrophin was done with outside counsel’s blessing (I have the bills to prove it), board approval and made good corporate sense.
3. Greebel’s lawyered up.
It’s obvious that Evan Greebel was going to need an attorney. But with the means to hire the best of the best and the experience to know the big players in the white-collar world, the real question was who would he hire to represent him? Greebel went with a boutique, and a very well-known one: Morvillo Abramowitz Grand Iason & Anello. Partners Jonathan Sack and Benjamin Fischer are representing him in the high-stakes case.
4. This may be only the beginning of lawyers facing consequences for their corporate representations.
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In addition to facing federal criminal charges for some shady financials at Retrophin, Shkreli and Greebel are also facing civil fraud charges filed by the Securities and Exchange Commission arising from the same events. And based on some earlier comments from SEC officials, we may see even more enforcement against lawyers. The New York Times has the comments:
The Securities and Exchange Commission, which also filed civil fraud charges against Mr. Shkreli and Mr. Greebel, has emphasized that it wants to focus on corporate gatekeepers for failing to protect companies and their investors from fraud.
Kara M. Stein, an S.E.C. commissioner, raised the issue of whether the agency was not being tough enough in pursuing lawyers for misconduct at corporate clients. “Are we treating lawyers differently from other gatekeepers, such as accountants? I think we should carefully review the role that lawyers play in our markets, with a view towards how they can better help deter misconduct and prevent fraud,” she said in a speech in 2014.
So corporate lawyers beware — unless you WANT to be featured on ATL.
If the SEC does go down a stricter enforcement path, it dovetails with an increased “Wild West” feel in the corporate sector. American Lawyer has some comments from one of Greebel’s former partners that give you the sense we may be seeing more similar cases against other lawyers:
“There are sometimes when I think to myself, ‘There but for the grace of God, go I,’” said one of these [former partners of Greebel’s at Katten], pointing to the thin line between zealous advocacy for a client and potential misconduct. “There’s tremendous pressure these days to bring in fees and revenue and sometimes you can get too aggressive drafting documents.”
5. Greebel may not have to pay for his lawyers.
Corporate bylaws are nothing new to readers of this site, so it won’t be as shocking to you, but Retrophin — the company allegedly defrauded by Shkreli and Greebel — might have to foot the legal bill. Shkreli was Retrophin’s CEO, and Greebel served as the company’s corporate secretary. As Professor Peter Henning points out in the New York Times:
[I]n an odd twist, Retrophin may have to pay more money in the case before it can ever recover. Under its bylaws, the company is required to advance the legal expenses of any director or officer who is the subject of a criminal prosecution or civil lawsuit related to conduct while at the company. Retrophin is incorporated in Delaware, whose Chancery Court has been aggressive in protecting the rights of individuals seeking payment of legal fees from a former corporate employer.
That means the company may have to pay for the lawyers while Mr. Shkreli and Mr. Greebel defend the criminal and civil cases, a claim it is sure to fight but may wind up losing.
You can imagine the tizzy you can dust up dropping that tidbit at a civilian (non-lawyer) get together.
In Shkreli Case, a Company Lawyer May Have Crossed the Line [New York Times]
Katten, Kaye Scholer Both Probing Partner Over Shkreli Charges [American Lawyer]
Lawyer Accused With Shkreli Allowed to Travel to Mexico [BloombergBusiness via Morning Docket]
Martin Shkreli Resigns From Turing Pharmaceuticals [New York Times]
Martin Shkreli Fired From CEO Job at KaloBios Pharmaceuticals [ABC News]
Earlier: Biglaw Partner Arrested With Martin Shkreli — Pharma Karma
