Two of my biggest concerns about the mortgage mess involve the conduct of lawyers at every stage, from creating the toxic securities to foreclosing on homes, and that so far the major players haven’t been held accountable for their actions in creating the crisis. Both concerns are neatly encapsulated by an enforcement action taken by the Securities and Exchange Commission at the end of last week.
On Friday, the SEC announced it is taking administrative action against David M. Tamman, a partner at Greenberg Traurig, a major international law firm. (Or at least, he was a partner: His page on the firm’s website has been removed.) The SEC is going after Tamman because it says he falsified a document that described securities he helped a client sell. That is, when the SEC asked Tamman for copies, it says he altered the real document and gave the SEC the fake.
While that conduct is egregious — and kudos to the SEC for going after him — it’s not that different than the ways many, many lawyers have behaved throughout this documentation debacle. For example, attorneys for multiple banks have been giving courts fraudulent documents in order to speed foreclosures, in many cases “robo-signing” the documents themselves. And consider the magnitude of the carelessness — it seems at least like malpractice to me — employed by the big firms involved in the securitization deals
See full article from DailyFinance: http://srph.it/f89tw1
1 comment:
not sure what in the hell this guy has to do with the "mortgage mess," but I read the SEC’s complaint and have been thinking about this and something just doesn’t add up. first, what was this guy’s motive for obstructing an SEC investigation? there apparently was no financial or other incentive (or you can bet the SEC would have mentioned it), and this doesn’t exactly sound like a “star” client. so, did this “partner at an international law firm” just wake up one day and decide he wanted to obstruct an SEC investigation for the hell of it? wow! second, the SEC says that Tamen “knew” the disclosures weren’t in the PPMs. did he administer the offering? that would seem a little unusual. did he interview all of the investors to find out what they got? (isn’t that what the SEC is supposed to do?). this poor sap was probably just conveying what his client told him (and it doesn’t look like this client was any saint – he supposedly managed to trick dozens of people into investing lots of money with him). third – there were too many lawyers involved (at least 5 by the SEC’s count – maybe more). doesn’t sound like the perfect plan for a “cover-up.” this guy wasn’t even responding to the SEC – a lawyer at another firm was (“Attorney D”). why didn’t “Attorney D” just go get the documents from the client? did this guy even know when and what “Attorney D” was providing to the SEC? it doesn’t say. fourth, the SEC claims that Tamen initially resisted turning over the documents, but eventually turned over all of the documents after the SEC insisted. did this guy one day all of a sudden accept Jesus into his life and decide that he no longer wanted to obstruct the SEC? was he scared because the SEC was now “insisting” (instead of, maybe, simply “asking?” for the documents?). maybe he was just waiting to get his client to waive the attorney client privilege? finally, assuming this guy suspected his client was being less than truthful, what was he supposed to do? accuse his client of lying? tell “Attorney D” he thinks his client is lying? tell the SEC he thinks his client is lying? stop representing the client for “ethical” reasons? simply relay the information on to “Attorney D”? (this seems the most logical choice to me – “Attorney D” is the one, after all, who is responding to the SEC). but damned if I know. finally, let’s not forget about that pesky little thing called the “attorney client privilege.” is it really appropriate for the SEC to seek information about document revisions from their target’s lawyer? really? doesn’t the lawyer have an obligation to at least advise his client of the privilege (even if not to assert it)? this would seem like a pretty good time for the client to assert the privilege.
The SEC has said explicitly that they’re going to start coming down hard on attorneys in their investigations (Robert Khuzami devoted a whole speech to this in June). it seems that lawyers no longer have ethical obligations to their clients – their primary obligation is to assist the SEC in their investigation of their clients. this case sounds like an unfortunate mix of a shady client, too many chefs in the kitchen, disregard for the attorney client privilege, and an over-zealous SEC. just some collateral damage. the government enters treachorous waters once they decide to target lawyers solely for “obstructing” an investigation (particularly when the lawyer apparently has no motive, and has nothing to do with the alleged underlying misconduct). the maryland district court just proved that in the recent case, US vs. Lauren Stevens.
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