Image: ShutterstockCrypto Client Sues Faegre Baker Daniels Over 2017 Advice
The Illinois lawsuit comes as Faegre Baker Daniels is putting the final touches on a planned merger with Drinker Biddle & Reath.
January 02, 2020 at 06:10 PM
3 minute read
A pair of crypto-investment companies and their founder filed a legal malpractice lawsuit against Faegre Baker Daniels in Illinois on Tuesday, accusing the Am Law 100 law firm of providing "erroneous" and "inaccurate" advice that put them in hot water with securities regulators.
Chicago-based Faegre partner Jeffrey Blumberg allegedly told Crypto Assets Fund and its founder Timothy Enneking that the crypto assets they sought to offer investors were not securities, according to the six-page lawsuit filed by CAF and Enneking in Cook County Circuit Court.
As a result, they never registered with the U.S. Securities and Exchange Commission, which began investigating CAF after it raised $3.6 million from U.S. investors in late 2017, the suit asserts.
Faegre represented CAF for part of the SEC investigation, bringing on board Denver-based partner Michael MacPhail. But Faegre "provided inaccurate analysis and analysis and advice that resulted in damage to the plaintiffs," the complaint alleges.
Shortly after learning the SEC was intending to bring an enforcement action against them, the plaintiffs ditched Faegre in May 2018 and found new counsel. The plaintiffs settled with the SEC in September 2018, paying a $200,000 civil fine and being censured by the agency.
In announcing the settlement, the SEC said CAF and Enneking misrepresented the fund to investors that it was the "first regulated crypto asset fund in the United States" and had registered with the agency.
Although Blumberg and MacPhail are referenced in the lawsuit, Faegre is the only defendant. Neither Blumberg, MacPhail nor a Faegre representative responded to requests for comment as of press time.
Faegre announced last month that it plans to merge in February with Philadelphia-based Drinker Biddle & Reath to create an Am Law 50 firm with more than 1,300 lawyers and consultants across 22 locations in the U.S., U.K. and China. Representatives for Drinker did not immediately respond to requests for comment.
The plaintiffs' lawsuit alleges one count of legal malpractice and sustaining damages worth more than $75,000.
The plaintiffs are being represented by Mitchell Katten and Joshua Diller of Katten & Temple in Chicago and Jeffrey Goldberg, the principal of the Law Offices of Jeffrey N. Goldberg P.C. in Los Angeles.
Goldberg said they had no comment "other than to say that they look forward to the opportunity to present their legal malpractice claims against Faegre Baker Daniels before a jury in Cook County, Illinois."
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
NOT FOR REPRINT
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
You Might Like
View All
Covington, Steptoe Form New Groups Amid Demand in Regulatory, Enforcement Space
4 minute read
Consumer Finance Law Enforcer Takes Private Practice Job at Morgan Lewis
With 'Fractional' C-Suite Advisers, Midsize Firms Balance Expertise With Expense
4 minute readLaw Firms Mentioned
Trending Stories
- 1Gibson Dunn Sued By Crypto Client After Lateral Hire Causes Conflict of Interest
- 2Trump's Solicitor General Expected to 'Flip' Prelogar's Positions at Supreme Court
- 3Pharmacy Lawyers See Promise in NY Regulator's Curbs on PBM Industry
- 4Outgoing USPTO Director Kathi Vidal: ‘We All Want the Country to Be in a Better Place’
- 5Supreme Court Will Review Constitutionality Of FCC's Universal Service Fund
Who Got The Work
Michael G. Bongiorno, Andrew Scott Dulberg and Elizabeth E. Driscoll from Wilmer Cutler Pickering Hale and Dorr have stepped in to represent Symbotic Inc., an A.I.-enabled technology platform that focuses on increasing supply chain efficiency, and other defendants in a pending shareholder derivative lawsuit. The case, filed Oct. 2 in Massachusetts District Court by the Brown Law Firm on behalf of Stephen Austen, accuses certain officers and directors of misleading investors in regard to Symbotic's potential for margin growth by failing to disclose that the company was not equipped to timely deploy its systems or manage expenses through project delays. The case, assigned to U.S. District Judge Nathaniel M. Gorton, is 1:24-cv-12522, Austen v. Cohen et al.
Who Got The Work
Edmund Polubinski and Marie Killmond of Davis Polk & Wardwell have entered appearances for data platform software development company MongoDB and other defendants in a pending shareholder derivative lawsuit. The action, filed Oct. 7 in New York Southern District Court by the Brown Law Firm, accuses the company's directors and/or officers of falsely expressing confidence in the company’s restructuring of its sales incentive plan and downplaying the severity of decreases in its upfront commitments. The case is 1:24-cv-07594, Roy v. Ittycheria et al.
Who Got The Work
Amy O. Bruchs and Kurt F. Ellison of Michael Best & Friedrich have entered appearances for Epic Systems Corp. in a pending employment discrimination lawsuit. The suit was filed Sept. 7 in Wisconsin Western District Court by Levine Eisberner LLC and Siri & Glimstad on behalf of a project manager who claims that he was wrongfully terminated after applying for a religious exemption to the defendant's COVID-19 vaccine mandate. The case, assigned to U.S. Magistrate Judge Anita Marie Boor, is 3:24-cv-00630, Secker, Nathan v. Epic Systems Corporation.
Who Got The Work
David X. Sullivan, Thomas J. Finn and Gregory A. Hall from McCarter & English have entered appearances for Sunrun Installation Services in a pending civil rights lawsuit. The complaint was filed Sept. 4 in Connecticut District Court by attorney Robert M. Berke on behalf of former employee George Edward Steins, who was arrested and charged with employing an unregistered home improvement salesperson. The complaint alleges that had Sunrun informed the Connecticut Department of Consumer Protection that the plaintiff's employment had ended in 2017 and that he no longer held Sunrun's home improvement contractor license, he would not have been hit with charges, which were dismissed in May 2024. The case, assigned to U.S. District Judge Jeffrey A. Meyer, is 3:24-cv-01423, Steins v. Sunrun, Inc. et al.
Who Got The Work
Greenberg Traurig shareholder Joshua L. Raskin has entered an appearance for boohoo.com UK Ltd. in a pending patent infringement lawsuit. The suit, filed Sept. 3 in Texas Eastern District Court by Rozier Hardt McDonough on behalf of Alto Dynamics, asserts five patents related to an online shopping platform. The case, assigned to U.S. District Judge Rodney Gilstrap, is 2:24-cv-00719, Alto Dynamics, LLC v. boohoo.com UK Limited.
Featured Firms
Law Offices of Gary Martin Hays & Associates, P.C.
(470) 294-1674
Law Offices of Mark E. Salomone
(857) 444-6468
Smith & Hassler
(713) 739-1250
