Tuesday, March 28, 2006

Sherman v. SEC (9th Cir. - March 23, 2006)

I'm always amazed by the number of California attorneys who are themselves parties to major lawsuits. For example, here. Especially when, as is often the case, their participation arises in situations in which they do not -- and most definitely do not -- come out smelling like a rose.

Like here. This is a case involving the bankruptcy of Los Angeles attorney Richard G. Sherman and his wife, as well as the SEC's underlying lawsuit against Sherman and his attempt to discharge in bankruptcy the stipulated $636,293.43 judgment that was entered against Sherman. Admittedly, if the SEC had a $636,000+ judgment against me, I'd probably do pretty much anything I could to try to get out of it. But I also wouldn't like the fact that my appeal would publicize to pretty much everyone that (1) I went bankrupt, (2) the SEC obtained a huge judgment against me, (3) that I was allegedly so sleazy in my bankruptcy proceeding that the district court dismissed my bankruptcy petition for cause, (4) that, in a separate matter, I violated a court order, solicited additional funds from investors in an alleged Ponzi scheme, and was found in contempt and ordered to refund the $55,000 that I impermissibly took from my client's trust account, and (5) was forced to file bankruptcy, and was sued by the SEC, because I obtained over $881,000 in advances from a Receiver even though I was only entitled to $300,000 in fees, and couldn't -- and didn't -- repay the money I took.

All of which allegedly happens here. Not exactly great press for Richard Sherman, or something that I'd want out there in a published Ninth Circuit opinion. (For some other interesting cases involving Mr. Sherman, this time as a lawyer rather than party, look here and here. Not really the kind of cases I'd want to prosecute.)