Friday, June 17, 2022
Reinstatement denied by the Massachusetts Supreme Judicial Court
The petitioner was admitted to the practice of law in Massachusetts in 1988, and thereafter practiced primarily as an appointed criminal advocate for indigent defendants. Between 2009 and 2011, the petitioner engaged in an insider-trading scheme amongst a group of golfing partners, which ultimately led to his conviction by guilty plea of conspiracy in violation of 18 U.S.C. § 371, and securities fraud in violation of 15 U.S.C. §§ 78j(b) and 78ff(a).
The District Court's refusal to dismiss the indictment was affirmed by the United States Court of Appeals for the First Circuit which noted
There is no allegation that McPhail himself engaged in trading. Rather, the indictment posits that he solicited “getting paid back” by Parigian and the others with wine, steak, and visits to a massage parlor. Parigian assured him that “I will take you for a nice dinner at Grill 23.” Another tipped trader offered McPhail a free golf outing.
The court here found Petitioner had not demonstrated present learning in the law.
The substantial evidence supports the board's conclusion that the petitioner failed to demonstrate that he has reformed his character during the period since he was convicted and sentenced for serious crimes. Before the panel, the petitioner did not present any witnesses or any letters attesting to his current moral character.
Prior to his conviction, the petitioner was not only an experienced criminal defense attorney, but also was experienced in trading stocks over several decades. Between the mid-1980's and the time of his conviction, the petitioner amassed retirement savings of approximately one million dollars, primarily through investing in mutual funds and stocks through his personal and IRA accounts. Between June 2009 and April 2011, as the petitioner admitted during his 2015 plea colloquy, he "willfully" traded shares of a particular company on six separate occasions based on emails he received from a friend, Eric McPhail, which tipped him off to "material, nonpublic" business activity information for a particular company, including the content of upcoming quarterly earnings reports or the existence of as-yet unannounced major contracts. The scheme ended in April 2011, when the petitioner's last trade yielded a net profit of more than $200,000, and the company was subject to a class action suit alleging financial malfeasance. The petitioner admitted that he had made all six trades "knowingly" and could "clearly" "infer" that the information upon which he acted was "confidential" from the content of McPhail's emails, including warnings to the petitioner to "SHHHHHHHH!!" and cautions against sharing the information with others because it might not "remain" "safe." The petitioner also specifically admitted that it was clear to him that the information was coming from an "improper source," and that "at some point during the conspiracy, he realize[d] that the information he [was] getting from McPhail [was] coming from an insider at [the company]," whom the petitioner met on the golf course.
Nevertheless, the petitioner materially contradicted or, at minimum, substantially qualified these admissions in his reinstatement petition and hearing testimony.
Citing Alger Hiss
Based on this record, there is substantial evidence supporting the panel's credibility-based conclusion, adopted by the board, that in seeking reinstatement, the petitioner pursued a "self serving and implausible insistence . . . that he did not know that insider trading could be a criminal offense, and that, even at the civil level, he was innocently caught up in a maze of uncertain legal rulings," leaving serious doubt "as to what [the petitioner] acknowledges he did wrong" and "what reform [the] panel should expect from him, and therefore, whether he has reformed at all." Like the panel, I conclude that the petitioner "back-track[ed] on [his] guilty plea," "confirm[ing] that he still has not fully accepted responsibility as a first step towards true reform."
He must wait one year to reapply. (Mike Frisch)