In May 2010 Wiatt learned that the Securities and Exchange Commission wanted to talk to him about a matter relating to Starr’s investment business. Wiatt e-mailed Bristol asking “Do I have anything to worry about? I can’t imagine why they would be calling me,” according to the civil complaint Wiatt’s lawyers have brought relating to the Starr scheme. Bristol told Wiatt he was representing Starr and his companies in the SEC case, but he offered to represent Wiatt too, if he would waive any potential conflicts, according to the complaint. Wiatt agreed. Bristol contacted the SEC and set up a May 28 phone call between the agency and Wiatt.
But that call never happened. On May 27 Starr was arrested on charges of wire fraud, money laundering, and investment adviser fraud. (Wiatt was also among Starr’s victims; he alleges that he and his wife lost $2 million in Starr’s fraud.)
In December 2010 the SEC went after Bristol for representing an alleged victim of the fraud while also representing the perpetrator. Just a few days later, things got even worse for the Winston partner. Wiatt and his wife sued Bristol, Starr, and Winston. They allege that $2 million of their money was funneled to Starr through Bristol’s attorney escrow account. Wiatt also accuses the firm of malpractice for representing him at the same time Bristol was advising Starr. (Bristol is representing himself in the case and maintains that Starr misled him about Wiatt’s money.)
Winston has mounted a vigorous defense against the Wiatts’ suit. “The complaint alleges that Bristol, as a Winston & Strawn partner, performed a smattering of one-off legal services for Mr. Wiatt
The Wiatts don’t see it that way. “To me it’s so outrageous that a firm that represents itself to be a high-level international firm . . . wants to have a battle with a high-profile client when their own partner stole from them,” says the Wiatts’ lawyer, Stone & Magnanini partner David Stone.
Winston has also tried to distance itself from its now-notorious ex-partner, the Wiatts claim. As first reported in the blog Above the Law in June 2010, Winston not only erased Bristol from its Web site after his connection to the Starr scandal became public, the firm also reedited the online press release announcing his November 2008 arrival. “They basically expunged him from the Internet,” Stone says.
The Wiatts’ case survived a motion to dismiss this summer. In late September, Winston’s lawyers again asked the federal district court judge overseeing the suit to dismiss Winston from the case. “The Wiatts still do not allege any well-pleaded facts from which this court could infer that Winston & Strawn knew of the attorney trust account, authorized it, or was complicit in Starr and Bristol’s criminal scheme in any way,” they argue.
