U.S. Representative Mary Bono Mack, a Republican from California, speaks during a Bloomberg 2012 Tampa Host Committee Economic Development Lunch inside the Bloomberg Link during the Republican National Convention (RNC) in Tampa, Florida, U.S., on Tuesday, Aug. 28, 2012.

After a mere four days on the job, former congresswoman Mary Bono on Tuesday resigned as interim CEO of USA Gymnastics.

One reason she stumbled was self-inflicted—she'd previously posted a photo of herself blacking out the Nike logo on her golf shoes, apparently in response to the Colin Kaepernick ad campaign. That prompted gymnast Simone Biles to tweet ”*mouth drop* … don't worry, it's not like we needed a smarter usa gymnastics president or any sponsors or anything.”

But Bono was also blasted by gymnast Aly Raisman for her affiliation with Faegre Baker Daniels—a 660-lawyer firm with 13 offices. A non-lawyer, Bono worked for affiliate Faegre Baker Daniels Consulting.

“Why hire someone associated with the firm that helped cover up our abuse?” tweeted Raisman, a three-time Olympic gold medal winner.

Scott Himsel, an Indianapolis-based litigation partner who is no longer with Faegre, represented USA Gymnastics as the Larry Nasser sex abuse scandal was unfolding.

Raisman wrote, “My teammates & I reported Nassar's abuse to USAG in 2015. We now know USOC & lawyers at Faegre Baker Daniels (Mary Bono's firm) were also told then, yet Nassar continued to abuse children for 13 months!?”

The Indianapolis Star in May obtained emails where Himsel told Nasser that “his medical techniques were under investigation, and 'it is in everyone's best interest' that Nassar not attend a gymnastics event that weekend,” the IndyStar reported.

The paper said the Himsel agreed to Nassar's request that USA Gymnastics would explain his absence by saying he was sick. The lawyer also allegedly went along with a later excuse that Nassar was focusing on his private practice.

“At least partly as a result of such discretion, Nassar's reputation as one of the world's foremost experts on the treatment of gymnastics-related injuries remained intact for 14 months after USA Gymnastics officials reported him to the FBI,” the IndyStar reported. During that time, he allegedly continued to abuse girls.

In a statement to the IndyStar, Faegre said it participated in reporting Nassar to the FBI in the summer of 2015, “a fact that refutes any claim of a cover up.”

“We are bound by our obligation of client confidentiality, and thus we cannot comment further at this time,” the firm said.

Legitimate questions can and should be raised whether Himsel acted properly in representing his client, and whether firm management shares any blame.

But what does this have to do with Bono, a former gymnast and the widow of singer Sonny Bono? Who was based in Washington, D.C., where she worked “to find bipartisan, win-win solutions in legislative, regulatory and policy matters”?

It's entirely possible that she never even met Himsel. And certainly she would have had no control over the work he did.

In a statement to CNN, USA Gymnastics said, “Faegre Baker Daniels is a large, global firm that has a number of divisions and areas, and Mary was not involved in FBD's work with USA Gymnastics as counsel of record.”

That she is nonetheless tainted by association is troubling—and points to a larger question that I'm surprised big firm lawyers don't ask more often: Why do we practice law together anyway?

Yes, yes there are synergies and efficiencies and cross-selling. And of course money. But there's also a risk when a bunch of strangers band together under one brand. With hundreds of lawyers and far-flung offices, there's often no real connection between partners.

You don't really know who you've thrown your lot in with—and unfairly or not, the misdeeds of one can hurt many.

 

Latham Team on Top in Fight over Biotech Giant Sinovac

Litigators from Latham & Watkins led by Eric Leon won the latest round in a bare-knuckles fight over control of China-based biopharmaceutical giant Sinovac Biotech.

On Monday, U.S. District Judge Nathaniel M. Gorton in Massachusetts sided with Latham client Sinovac and denied defendant 1Globe Capital's motion for a preliminary injunction.

Massachusetts-based 1Globe is one of Sinovac's largest shareholders. At Sinovac's February 6, 2018 annual meeting, shareholders voted to remove and replace the then-members of the board of directors.

According to 1Globe, which is represented by Nutter McClennen & Fish in Boston, since the election, the former CEO, CFO and board have refused to relinquish management control of the company to the new directors. Moreover, after the election of the new board, the old board issued a large number of restricted shares to themselves.

But the Latham team counters that 1Globe had a “secret plan” to take over Sinovac, and violated securities laws by failing to file the required disclosure documents.

The fight occurs against the backdrop of a December 2016 report that Sinovac execs and employees bribed multiple Chinese officials from 2002 to 2011 to get vaccine trials approved and distribution greenlighted.

The company was investigated for violating the Foreign Corrupt Practices Act, but the U.S. Securities & Exchange Commission closed its probe without taking action in August. The Department of Justice followed suit in September (take a bow, Latham).

In June of 2017, Sinovac announced it entered into an agreement where the CEO, CFO and others would acquire all of Sinovac's stock. 1Globe cried foul, claiming that the board adopted an agreement that shut down other investors from mounting competing bids.

That's currently the subject of litigation in Delaware, as well as in Antigua, where Sinovac is incorporated. The Antigua court will also decide if the new board was validly elected.

But for good measure, there's also a fight in Boston federal court.

Judge Gorton rejected 1Globe's petition to enjoin Sinovac from selling any shares to private investors or issuing future shares until the court in Antigua sorts out who is in charge.

He ruled 1Globe lacked standing. “[T]o bring an action under Section 10(b) and Rule 10b-5, the private party must have been an actual purchaser or seller of securities,” he wrote.

1Globe was neither.

Gorton rejected 1Globe's contention that because it only sought injunctive relief, it didn't have to show that the damages were based on buying or selling securities—a question with scant precedent.

“Indeed, the only Circuit Court that has directly addressed that issue rejects 1Globe Capital's proposition,” Gorton wrote. “[D]efendant has not shown that it has a reasonable likelihood of success on the merits of its claim.”

The Latham team also includes William J. (BJ) Trach, J. Christian Word, Sarah Tomkowiak and associate Jooyoung Yeu.

 

What I'm Reading

Global Arbitration Lawyers Flock to Saudi Arabian Conference Amidst Boycott

The timing of the event meant that lawyers from King & Spalding, Norton Rose Fulbright, White & Case and other firms, along with leadership from the American Arbitration Association, were scheduled to brush shoulders in Riyadh with a member of the Saudi royal family and multiple cabinet officials.

Manhattan Appeals Court to Mull Whether Trump Must Face Ex-'Apprentice' Contestant's Defamation Suit While in Office

Can Summer Zervos—who said Trump subjected her to unwanted kissing and groping in 2007 and whose lawsuit says he defamed her by calling her a liar during the 2016 election campaign—litigate her case while the president is in office?

Ex-Foley Partner Gets 2-Year Suspension for Document Tampering

 The Wisconsin high court found that former Foley & Lardner partner Adam Wiensch not only deceived the IRS with falsified and backdated documents, he also caused other lawyers at the law firm to unwittingly rely on those documents. 

Axinn Launches San Francisco Office

The IP and antitrust firm says it's moving closer to existing tech clients and planting a flag in “an epicenter in the U.S. for technology and scientific innovation.”

Williams & Connolly Partner, Up for 4th Circ., Discloses $650,000 Income

If confirmed, Allison Jones Rushing—who earned her law degree from Duke University School of Law in 2007—is poised to be one of the youngest judges on the federal bench.

Judge Rejects DeLorean Estate's Claim for 'Back to the Future' Royalties

A federal judge found the estate for John DeLorean signed over rights to proceeds of the contract with Universal when it settled an earlier lawsuit.

In case you missed it…

Daily Dicta: Orrick Associates Win Civil Suit for College Student Who Said She Was Raped—and Got Sued for Defamation

It started with a depressingly familiar scenario: A college party. Too much drinking. A young woman who said she woke up with her pants down and a man on top of her. But Yee Xiong's case against a fellow student at the University of California at Davis took a decidedly unusual turn.