Tuesday, January 17, 2012

Good Day at Oral Arguments on Legal Appeal

My never ending legal situation (since 2006) came to another important juncture today as oral arguments were heard at the Appellate Division of the NY Supreme Court (see picture above). Basically, my lawyer was asking them to overturn a lower court decision that upheld a $15M defamation award from a Wall Street Arbitration Panel. The investment bank I had worked for argued they were owed these damages because a New York Times article about my situation, written by Pulitzer Prize winning journalist Gretchen Morgenson and based in part on their emails, supposedly caused their private placement to be delayed (but not prevented). Getting the award overturned is difficult because the panel didn't explain its reasoning for issuing the award and federal law sets a higher standard for over turning an arbitration award; specifically you have to demonstrate a, "manifest disregard for the law."

Nevertheless, I felt good about today's proceedings because the five judge panel seemed more engaged in my lawyer's arguments than they had in earlier arguments that day and certainly more open to our position than the previous judge in the lower court. Last time the judge showed up late, then we had to wait for court police to appear and much of the time the judge supported his head with his hands and had a look on his face indicating that he was bored with the proceedings. This time, all five judges seemed professional, focused, asked relevant questions and seemed somewhat familiar with the cases.

The questions the judges asked, about a dozen in total, almost all related to the one point we argued today. We claimed that the arbitration award was 'arbitrary' (which is prohibited by the English common law right of 'due process') because of the way in which it was calculated. Specifically, the investment bank had used the legal concept of 'lost profits' and applied it to how much more money they would have if a private equity financing had not been delayed by a year. We argued this methodology is arbitrary because of the high number of factors that affect this type of calculation (eg how much of the delay was due to the NY Times article, what if the markets had been better a year later instead of worse, how do they know what their investment return would have been on the money during that year) and the difficulty in measuring these types of variable precisely. We should know their verdict in one to two months.

This weekend Ali and I watched a Mel Gibson movie called, "Edge of Darkness" in which a whistle blower is threatened that he will be charged with murder if he doesn't stop bothering the powerful company. When the lead character protests that not only is he innocent but they don't have case he is told that doesn't matter because the damage from the accusation alone will cost him his job and the legal bills will bankrupt him. It made me think about my situation. It started when played the whistleblower and turned over emails to Congress I thought implicated the investment bank in a crime. It ended with the investment bank (which is run by a proud Russian immigrant who created a major firm despite only having a high school education) spending over $4.6M (they tried to stick me with their legal bill too) in legal fees and succeeded in driving me out of the industry and making me penniless. Its been frustrating that watch how easily the law allows itself to be used as a weapon by those with the money to hire unscrupulous corporate trial attorneys. But after six years I've come to realize that it is nice to be able to spend so much more time with my family.