Biglaw

The Final Gasps Of A Defunct Biglaw Firm

We are still feeling the repercussions of 2012.

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Dewey & LeBoeuf (through its forebears) may have officially ended its 100+ year run as a law firm in 2012, but the legal ramifications have been ongoing. There have been convictions for some of the leaders that steered the once famed white shoe firm into financial ruin — though no jail time. But one of the lagging cases has been the Securities and Exchange Commission’s civil complaint against former Dewey executives.

Last week the SEC announced a settlement of that case with several of the key players. Former Dewey chairman Steven Davis agreed to pay a $130,000 civil penalty; former finance director Francis Canellas agreed to pay $43,178; and former Dewey controller Thomas Mullikin agreed to pay $8,635.78. All that is in addition to the $35,000 former Dewey executive director Stephen DiCarmine agreed to pay earlier this year.

While the $216,000+ might sound nice, as Law.com reports, that dollar amount isn’t what the SEC originally imagined they’d be able to collect:

Still, the civil penalties and disgorgements are a small fraction of the fraud that the SEC initially alleged was at issue in the case.  At the same time that criminal charges were announced in 2014, the SEC alleged in a civil complaint that five Dewey executives and finance professionals facilitated a $150 million fraudulent bond offering by the law firm, which collapsed in 2012. The SEC alleged that Dewey leaders devised ways to artificially inflate income and distort financial performance, while claiming that the firm’s private bond offering “seized on phony financial figures.”

There is still an outstanding case against the former Dewey executives. They face a civil suit in federal court based on statements made as part of a 2010 bond offering:

Aviva Life and Annuity Co. sued Davis, DiCarmine and Sanders in one case and Canellas in a separate suit for distributing false and misleading information regarding Dewey’s financial condition. Both suits, as well as the SEC action, were put on hold during the criminal trials.

2012 may seem like a long time ago, but as the long legal woes of the once great Dewey prove, Biglaw is still feeling the ramifications of that time.

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headshotKathryn Rubino is a Senior Editor at Above the Law, and host of The Jabot podcast. AtL tipsters are the best, so please connect with her. Feel free to email her with any tips, questions, or comments and follow her on Twitter (@Kathryn1).

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