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Mayer Brown partner convicted in Refco case

Tom Kirkendall is troubled by what just happened to Joseph P. Collins:

The jury verdict against Collins crosses the Rubicon in terms of the federal government's willingness to prosecute an outside deal lawyer for merely advising a client in regard to structuring transactions that are not intrinsically illegal. As is typical of most business prosecutions over the past several years that criminalize questionable business judgment rather than clear white collar criminal acts such as embezzlement, the case against Collins was a jumble of conclusory allegations of fraud without any specific allegations of what Collins did that was criminal.

Heck, it was undisputed at trial that Collins barely worked on the transactions on which the prosecutors based their case against him. Essentially, the prosecution alleged that Collins assisted former Refco CEO and controlling shareholder Phillip Bennett in using Refco's credit to reduce indebtedness to Refco of an affiliate controlled by Bennett. That's not a crime, but the government asserted that Collins committed a crime by aiding Bennett in misleading Refco auditors and investors by not telling them about the use of Refco's credit to reduce the affiliate's debt to Refco.

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Rafael Mangual
Project Manager,
Legal Policy

Katherine Lazarski
Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.