Posts on ‘October 21st, 2009’

An insurer was not obligated to provide malpractice coverage to a law firm where the firm knew it could be held liable for the fraudulent activities of a client but did not tell the insurer before purchasing the policy, New York’s highest court has ruled. The Court of Appeals ruled that two insurers can invoke “prior knowledge” exclusions in excess coverage policies and refuse to indemnify Pepper Hamilton and partner W. Roderick Gagne in a suit for professional malpractice and breach of fiduciary duty.

Attorney Kelly D. Talcott looks at the FTC’s revised “Guides Concerning the Use of Endorsements and Testimonials in Advertising” and advises that just as an advertiser can be liable for the misstatements of a blogger, so too can a blogger be liable for the misstatements of an advertiser.

For the first time in three years, in-house counsel say that reducing outside legal spending is their first priority, according to a study released at the ACC meeting in Boston. Jeffrey Carr, GC of FMC Technologies, talked about how companies can start doing more alternative fee arrangements. “Once you decide to go down this path, there’s only one question you need to ask law firms,” Carr says. “Will you do this? Yes or no. If they say no, they are free to work elsewhere. Draconian? Yes. Effective? Absolutely.”

The insider-trading charges announced by federal prosecutors against five top executives and hedge fund billionaire Raj Rajaratnam on Friday may mark a turning point for regulators in the post-Madoff era and are sure to affect how attorneys advise their corporate clients, say white-collar defense lawyers. Need to establish your company’s credibility with the government? Think internal investigation.

If police departments want to line their budgets with drug money, they’d better do it right, according to the 9th Circuit. In a Tuesday ruling, the court ordered the feds to return nearly $200,000 to an L.A. medical cannabis clinic. After police raided the clinic in 2005, the seized funds became subject to asset forfeiture proceedings, with the city in line to get 80 percent of the loot. The 9th Circuit decision came a day after the Obama administration formalized guidelines on federal pot prosecutions.