Harriet Miers at Center of Investment Fraud (Slander alert)

Worldnetdaily.com ^ | 10/05/2005 | Jerome Corsi

[I8NY]

Ouch, ouch, ouch! Unfortunately, this is a part of the public record; the court docs are on the web (http://www.ssb.state.tx.us/press/00-01press/erxleben.pdf). Also there's a 1997 puff piece for Austin Forex from the Austin Business Journal that in retrospect really hurts:

"Word is spreading from Austin Forex's small core of clients, and people are cashing in life insurance policies and college savings accounts to increase their initial investments. Austin Forex requires a minimum investment of $20,000.

"Daniels, a retired college music teacher, has brought Erxleben 10 additional clients, most of them extended family members. Dennis Hopkins, who is the band director at University of Mary Hardin Baylor, was impressed enough with the return on his initial Austin Forex investment to risk his daughter's college tuition fund."

The article is at http://www.bizjournals.com/austin/stories/1997/10/20/smallb1.html

[Steelerfan]

Final thought, Travis County's docket is not on line so I could not get a copy of the complaint. It should be public record and I am sure someone will get it soon. When they do, it will shed some light on the actual allegations made against the firm.

[Steelerfan]

The actual complaint would really shed some light on when the wrongdoing was actually committed. If it extended into the period when she was the managing partner, then there could at least be an argument she has some responsibility for not supervising the firm (although in light of how loosely run most law firms are I think that is still a weak argument). Right now, there is nothing to go on here.

[disraeligears]

I hope that this excerpt is not too long.


Excerpted from CLASS ACTION REPORTER
Monday, May 1, 2000, Vol. 2, No. 83
LOCKE LIDDELL: $ 22 Mil Settlement Serves as Warning to Other Law Firms

---

Locke Liddell & Sapp's agreement to pay $ 22 million to settle a suit alleging it aided a client in defrauding investors is expected to serve as a warning to other firms that they must take action when they learn a client's alleged wrongdoing may be harming third parties. The
Dallas-based firm agreed April 14 to settle a suit stemming from its representation of Russell Erxleben, a former University of Texas star football kicker whose foreign currency trading company was allegedly a Ponzi scheme.

. . . The Texas disciplinary rules state that a lawyer may disclose confidential client information in order to prevent the client from committing a criminal or fraudulent act. Jim George, an Austin lawyer who is a member of the ALI, said he favors making it clear that a lawyer must tell people if a client is hurting them. "It's a very simple legal proposition a lawyer can't help people steal money," said George, of George & Donaldson.

George represents investors who lost $ 34 million they placed in Erxleben's Austin Forex International. Daniel N. Matheson III, a former Locke Liddell partner who represented Erxleben, said in his deposition that he knew in March 1998 that $ 8 million in AFI's losses hadn't been
reported to investors. AFI, which was founded in September 1996, shut its doors in September 1998. A few days later, Texas securities regulators seized its accounts and put the company into receivership.

Harriet Miers, co-managing partner of Locke Liddell, said the firm denies liability in connection with its representation of Erxleben. "Obviously, we evaluated that this was the right time to settle and to resolve this matter and that it was in the best interest of the firm to do so," Miers said.

The Locke Liddell settlement covers partner Curtis Ashmos of Austin and former partners Daniel Matheson and Jane Matheson. Other defendants, including an accounting firm and an Austin businessman, remain in the case.

The petition alleges [in part] the lawyers allowed AFI to sell unregistered securities, signed off on brochures and promotional materials that contained misrepresentations, and knew about the company's growing losses for months before state securities regulators began investigating. This
story originally appeared in the Texas Lawyer. (The Legal Intelligencer, April 26, 2000)

[p. henry]

You misunderstood my comment. I did not say that she did not have knowledge of the matter being handled (although as a matter of fact in a firm of several hundred lawyers the managing partner frequently has little if any knowledge about a particular case or matter). My point was that, based upon my experience with cases similar to the one described, in all liklihood even the partner responsible for the representation did not know of the fraud, nor with the exercise of customary diligence, could he have known of the fraud.

This is not a certainty. There are venal and corrupt securities lawyers. In one famous case in my own city a lawyer primarily responsible for a client maintained two sets of files: one known to his partners and one not known. When the Ponzi came to an end this particular lawyer attempted to conceal and destroy evidence. That kind of lawyer is known as a criminal. Fortunately, in my experience this type of lawyer is rare. Most lawyers caught up in Ponzis are competent and honest men who are themselves defrauded by their clients.

[disraeligears]

If Ms. Miers believes her firm was not liable, then great. But don't you "Who? Who? . . . Aw gee whiz, we should just trust 'em" Freepers ever complain about personal responsibility again.

[Steelerfan]

Found a press release on this at http://www.ssb.state.tx.us/press/98-99press/12erxleben.pdf

It says the worngdoing was between October 1996 and September 1998. I do not know how that overlaps with her tenure as managing partner, but it seems as if it might.

I really would like to see that complaint.

[Steelerfan]

worndoing=wrongdoing

[Howlin]

Are you trying to say Farah didn't vet this? Please.

[Steelerfan]

I hear what you are saying but check out post 65. I think he is right about how these matters usually come up and that Miers probably is not personally responsible for what happened even if she is legally responsible because she was in the partnership.

Still do not understand why they nominated her though.

[Spiff]

Wikipedia has this to say about her tenure at Locke, Liddell & Sapp:

Miers worked in private practice for the Dallas firm of Locke, Liddell & Sapp (and predecessor firms) from 1972 until 2001. She was the first female lawyer hired at the firm, and later became its president. When the merger that created Locke, Liddell & Sapp took place in 1999, she became the co-managing partner of a legal business with more than 400 lawyers. In 2000 the firm settled a lawsuit asserting that "it aided a client in defrauding investors" for $22 million [3].

[disraeligears]

Frankly, I am against her nomination on the lack of judicial appellate experience. This is a matter of knowing the right people, not that she was the best qualified originalist, strict constructionist available.

This whole nomination is absurd.

The fact that she was a managing partner at a time when her firm settled by paying $22 million is not part of the reason why I am against her nomination. BUT, the fact that her greatest legal accomplishments, it appears, were that she was the managing partner of a silk stocking firm, and head of the local and state bars. That IS part of the reason why I am against (let's not go into the cronyism aspect of this).

What in the heck was GWB thinking? Stealth, smealth! If you believe in your convictions, you should be honest and upfront about the candidate that you nominate. Too cute by half.

[Steelerfan]

So it appears she inherited the problem. Wonder whether the partners named in the suit were from her firm or one of the merged ones?

Also ran across this anecdote while searching the web on this. Still not convinced she should be the nominee, but it makes me think well of her as a a person:

A final anecdote. A junior White House staffer got very, very sick. As this person lay dying in the hospital, Harriet visited constantly. Toward the end of this person’s life, Harriet delicately asked whether a will should be executed. One hadn’t been written. No one really wanted to think that the end could be so near. Harriet did it herself, with tears held back and a lock-jawed determination that her young friend’s wishes be honored. All present were awed by Harriet.

I don’t know much about Harriet’s legal philosophy, but I do know that I want that kind of compassion on my supreme court.

[Conservative Coulter Fan]

Why did you warn readers that the following column was a “slander alert” and then at the end you say “I don’t know if this is to be believed or not,” which indicates that you probably didn’t read anything other than the headline?

Are you rushing to defend Bush’s pick, which at best is cronyism and a middle finger to the entire conservative movement that has continually been fighting the judiciary?

[PajamaTruthMafia]

If there was any wrongdoing there would have been criminal indictments of Partners in the firm for fraud. There would have been disbarments. The firm would have disbanded. That's the way it works. This was a civil lawsuit by 3rd parties trying to recoup their losses by going after the only deep pockets around.

[BigSkyFreeper]

I was pointing out that Farah did not write the article, Jerome Corsi did.

So this article happend to slip under Farah's radar? LOL

[Souled_Out]

"If there was any wrongdoing there would have been criminal indictments of Partners in the firm for fraud"

This was a civil lawsuit by 3rd parties trying to recoup their losses by going after the only deep pockets around

---

So they lost the Civil lawsuit to the tune of 22 million dollars and there was no "wrongdoing"?

Please do not interpret this to mean that I believe this story.

I just am asking questions to determine how people can just fluff this off in a few words and still say this is the right person.

If this is true, the Rats will not be so nice as to just say it was nothing. They will do anything to embarrass the President.

[BigSkyFreeper]

I seem to remember a year ago on FR he was our hero for telling the truth about John Kerry.

Big deal. John O'Neill is a Democrat, he had his reasons NOT to support John Kerry, and they were more personal. His reasons were not borne of a political nature.

WND quite simply is not a credible news source. They entered kookdom and the 21st Century donning tinfoil caps.

[Earthdweller]

I hope some people take the unfair bait here and choke on it...the impatient little twits.

I still don't know enough about her to say ya or nay and neither does anyone else.

Give her a fair up or down vote based on her testimony. That's the only way.

The arguments I have heard against her are just petty.

[PajamaTruthMafia]

That's like saying every doctor John Edwards fleeced committed wrongdoing. Firms settle law suits all the time for all sorts of reasons that have nothing to do with being guilty of a crime (fraud is a crime). Don't you think the partners would have been charged or disbarred or the firm would have folded? It happens all the time.

It's not even clear if these partners were part of the firm at the time.

You think there is a law firm on the planet that could win a civil suit by a bunch of average folks who were fleeced by a firm client? Good luck picking that jury.

You think the left will even bother oppose her when the right is savaging her and running wild with any little thing they can?

I think a lot of my fellow Freepers should start the impeachment proceedings if they don't trust the President to know someone he has worked with for a decade. If he is that incapable he should be thrown out of office.