Two separate cases of alleged attorney misconduct put a spotlight on ethics.
Harvey Newkirk, a New York lawyer, was charged with wire fraud in connection with a failed bid to raise $8 million dollars to purchase Maxim magazine. Newkirk was working at Bryan Cave at the time of the alleged fraud.
Last month, a malpractice lawsuit was filed in Baltimore claiming that George Nemphos and Jay Cohen, lawyers from Duane Morris, strayed from their ethical obligations by representing clients with competing interests and by setting up an LLC unrelated to the firm to collect a client’s fees.
The U.S. charged that Newkirk lied about having assets and collateral for the Maxim purchase while persuading two victims to provide additional funding. The complaint alleges he also lied to an investment adviser for the lender involved in the deal.
Newkirk, according to his Linkedin profile, previously worked at K&L Gates and, more recently, at Bryan Cave. He is accused of conspiring with Calvin Darden Jr., the son of Darden Media Group Chairman Calvin Darden Sr., said a person familiar with the case who wasn’t authorized to speak about it. The two men also tried to raise at least $20 million from a third person, according to the complaint.
The younger Darden, an ex-Wall Street stockbroker, pleaded guilty to wire fraud in November and admitted to posing as his father in e-mails and phone calls to trick lenders, U.S. prosecutors said. Newkirk “has done nothing wrong and we look forward to challenging the government’s overreaching and baseless allegations,’' his lawyer, Priya Chaudhry, said Wednesday. She described him as a “brilliant and well-respected attorney with an unblemished reputation.’'
Jeff Scott, a spokesman for Bryan Cave, said the firm ``was cooperating fully with law enforcement and we will continue to do so.’'
The suit against Nemphos, Cohen and Duane Morris contains civil claims of malpractice.
An entrepreneur contends that the two Baltimore lawyers not only neglected to represent her interests but also formed an independent company to collect fees.
“Assuming the allegations are true, for a law firm partner to create a separate entity and direct a client to pay a portion of their fees to the entity without getting the law firm’s consent’’ would be a breach of the fiduciary duty that partners owe to law firm as well as a breach of the partnership agreement, Nicole Hyland, a partner at Frankfurt Kurnit Klein & Selz who specializes in professional responsibility, said in an interview.
The lawsuit, filed March 3 in Baltimore, contends that Nemphos, the former head of the corporate practice, and Cohen had begun advising Angela Singleton, who was developing a business for women’s shoe inserts.
The two also suggested -- and represented -- individual investors who became equity owners of the company according to the complaint. That dual representation created a conflict, Singleton claims.
Despite the investments and the hiring of a designer to develop Singleton’s idea, disagreements and production problems arose and the company ultimately filed for bankruptcy in November. Singleton filed suit in early March, represented by Miami lawyer Andrew Hall of Hall, Lamb and Hall.
“A firm has a duty to supervise its lawyers as well as a duty to its clients,’' Hyland said. “A firm cannot avoid these by saying, `We didn’t know what was going on.’''
Joshua Peck, a spokesman for Duane Morris, said that the two lawyers were no longer at the firm and declined to comment further. William Murphy, a partner at Zuckerman Spaeder, confirmed in an e-mail that he represents Duane Morris and otherwise declined to comment.
Efforts to reach Nemphos and Cohen were unsuccessful. Law 360, which first reported the lawsuit, also reported that Andy Levy of Brown Goldstein Levy in Baltimore represents Nemphos and that Andrew Graham of Kramon & Graham represents Cohen. Graham confirmed in an e-mail that he represents Cohen. Levy didn’t respond a calls and e-mail seeking comment.
Allegations of conflicts of interest are somewhat commonplace.
“I’ve heard some lawyers joke that they’ve never met a conflict that couldn’t be waived,’' Hyland, the chair of the Committee on Professional Ethics of the New York City Bar Association, said. “But there are some that are just unwaivable.’'