April 28, 2009
An attorney was summarily disbarred by the New York Appellate Division for the First Judicial Department. The court described the basis on its decision to disbar as a result of a federal felony conviction:
During his plea allocution respondent admitted that between 2001 and 2005 he, along with his father, his brother and others, engaged in an insider trading scheme after receiving non-public, material information from his father who was an employee at Taro Pharmaceutical Industries, Ltd. Respondent admitted that he knew that when he traded in Taro securities he was engaging in conduct that violated the securities law by executing options trades and by profiting on that information, and that he tipped off others regarding the inside information so that they too could profit. The criminal information to which respondent pled guilty alleged that he received $66,000 in kickbacks from a tippee for the inside information. At sentencing, respondent acknowledged that he obtained an "ill-gotten" personal profit of between $600,000 and $800,000 as a result of his participation in the insider trading scheme. He further conceded that he would lose his law license as a result of his criminal actions.
The court concluded that summary disbarment was appropriate because the federal offense was "substantially similar" to the state crime of insider trading. A news report on the underlying case is linked here. (Mike Frisch)
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One unexpected consequence of New York's automatic suspension law is that the suspension happens at the moment of conviction. Although this is supposedly so, we all know that it still takes an order of the Appellate Division to implement that automatic disbarment. In this case, the attorney pled guilty on 8 February 2007 yet this decision was not released until today, 28 April 2009. The attorney will not practically be disbarred until he receives actual notice of the disbarment after the Committee sends him a certified copy of the opinion.
Since the attorney is free to apply for readmission after five year disbarment, the practical affect of this is that he might be disbarred for less than three years. In other words, there is a real strategic advantage in arguing that your disbarment was automatic.
Posted by: FixedWing | Apr 28, 2009 10:49:21 AM