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"Quote stuffing" a focus in flash crash probe
Topics in Legal News | 2010/09/02 10:52

U.S. regulators probing the May flash crash are focusing on a trading practice known as "quote stuffing", in which large numbers of rapid-fire orders to buy or sell stocks are placed and canceled almost immediately.

CFTC commissioner Scott O'Malia told Reuters on Thursday that the futures regulator was reviewing data from Nanex LLC, a trade database developer that issued a study suggesting that computer algorithms used quote stuffing to gain an edge during the May 6 crash.

The U.S. Securities and Exchange Commission, which is investigating the crash jointly with the Commodity Futures Trading Commission, is looking at quote stuffing and something called "sub-penny pricing", a person familiar with the flash crash probe said.

The Nanex study uses market graphics and playful names to illustrate quote stuffing, arguing that high-frequency trading firms do this to flood the marketplace with bogus orders to distract rival trading firms.

Investors could make trades under the false impression that those orders were legitimate, only to see liquidity disappear and the market move against them when the orders are canceled -- all in the blink of an eye.



Gail Koff, Principal in Jacoby & Meyers, Dies at 65
Attorney News | 2010/09/02 07:37

Gail J. Koff, who could be considered the silent partner in the national law firm Jacoby & Meyers, a sort of legal Wal-Mart for the middle class, died Tuesday in Manhattan, where she lived. She was 65.

The cause was complications of leukemia, her former husband, Ralph Brill, said.

Ms. Koff was not there in September 1972 when Stephen Z. Meyers and Leonard G. Jacoby, his former law school classmate at the University of California, Los Angeles, opened their first storefront office in Van Nuys. But her aspirations matched those of the founders, and six years later she became the third partner, though unidentified in the firm’s name, assigned to open the first New York office.

Recognizing that the rich can afford lawyers and that the poor have access to free assistance programs, Jacoby & Meyers focused on serving average people who could often not afford to hire a lawyer at prevailing rates.

The firm set off something of a revolution in the field by using mass-marketing techniques and charging flat fees for services. It opened walk-in neighborhood “legal clinics” staffed by general practitioners who had access to teams of specialists in areas like bankruptcy, real estate, personal injury, divorce and criminal law.



Alabama AG, governor at odds again over oil spill
Legal Marketing | 2010/09/02 07:36
The tense relationship between Alabama's governor and attorney general has taken another stinging twist.

Attorney General Troy King has accused Gov. Bob Riley of trying to compromise litigation against BP over the Gulf oil spill. Riley, meanwhile, has hired a law firm to deal with the BP issue and claims the price is much cheaper than King had planned.

King wrote Riley a letter Friday, saying the initial claim of $148 million that the governor filed with BP is "grossly inadequate." He also accused Riley of holding secret meetings with BP officials.

Riley announced he has hired the Balch & Bingham law firm to advise the state on the oil spill, at $195 per hour. King had approached the firm about representing the state on a contingency basis of up to 14% of the money recovered, but Riley refused to go along.



DOJ's elite Public Integrity unit gets new leader
Topics in Legal News | 2010/08/30 08:23

The Justice Department's Public Integrity Section has a storied 34-year history of pursuing corruption in government and safeguarding the public trust.

That trust was breached, however, when some of the unit's prosecutors failed to turn over evidence favorable to the defense in their high-profile criminal trial of Sen. Ted Stevens, R-Alaska, who died earlier this month in a plane crash.

Now Jack Smith, a 41-year-old prosecutor with a love for courtroom work and an impressive record, has been brought in to restore the elite unit's credibility.

Before Stevens, Public Integrity's renown was built on large successes — like the prosecution of the Jack Abramoff lobbying scandal and convictions of federal and state judges, members of Congress and state legislators, military officers, federal lawmen and bureaucrats and their state counterparts over the years.

But its stumble — not disclosing exculpatory evidence as Supreme Court precedent requires — was equally large. It was so serious that Attorney General Eric Holder, one of Public Integrity's distinguished alums, stepped in and asked a federal judge to throw out Stevens' convictions.

At the time of the Stevens debacle, Smith was overseeing all investigations for the international war crimes office at The Hague in the Netherlands. He'd read about the Stevens case. Offered the chance to take over Public Integrity, he couldn't stay away.



Thousands sign on for $10 billion BP suit
Headline Legal News | 2010/08/30 08:23

The revelation that BP's Texas City refinery emitted toxic benzene for more than a month has ignited a furor in the port community that has suffered its share of deadly industrial accidents and toxic spills.

Thousands of residents who fear they may have been exposed to the known carcinogen released at the oil refinery from April 6 to May 16 have been flooding parking lots and conference halls where local trial attorneys hosted information sessions and sought clients for class-action lawsuits against the oil giant.

BP faces the new challenge just as it is reaching a key milestone in another crisis — plugging the Gulf of Mexico well that blew out in an oil spill disaster that is costing the company billions of dollars.

On Wednesday, more than 3,400 people lined the hallways and sidewalks around the Nessler Center to sign on to a $10 billion class-action lawsuit filed Tuesday in Galveston federal court by Friendswood attorney Anthony Buzbee.

The lawsuit alleges the release of 500,000 pounds of chemicals - including 17,000 pounds of benzene - has jeopardized the health and property values of people who live and work in the area. At the nearby College of the Mainland, a separate town hall meeting drew a crowd of 600.



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