By Jessica Dye
NEW YORK, Nov 27 (Reuters) - A top white-collar lawyer has
been disqualified from representing a plaintiff in a civil
racketeering lawsuit brought against a man he represented in a
regulatory investigation more than a decade earlier.
U.S. District Judge Arthur Spatt in the Eastern District of
New York ruled that Ira Sorkin of Lowenstein Sandler could not
continue to represent Annette Lorber in the present case. In the
ruling, Spatt said the possibility that Sorkin would have to
cross-examine his former client, defendant Jonathan Winston, a
real estate developer, about prior criminal conduct created a
clear "possibility for trial taint."
Sorkin's "obligation" to Lorber is to use the information he
obtained from Winston during the regulatory i nvestigation
against Winston in the civil case, Spatt wrote in a ruling filed
Nov. 26. "Unfortunately, this serious conflicting dilemma can
only be avoided by removing Sorkin as counsel for the plaintiff
in this case."
Spatt's order gave Lorber 45 days to find new counsel.
Sorkin, a member of Lowenstein Sandler's white-collar
defense practice group, said he was pleased the judge had not
dismissed the case. "We respectfully disagree with the court's
ruling," he said, adding that he did not have any plans to
challenge it further. Sorkin, who is well known for representing
convicted fraudster Bernard Madoff when he was a partner at
Dickstein Shapiro, said it was not immediately clear who would
replace him as Lorber's counsel.
According to the ruling, Winston, who worked at a securities
brokerage firm, retained Sorkin in 1999 to represent him during
a regulatory investigation by the National Association of
Securities Dealers into suspicious stock transactions.
At the same time Sorkin was representing him in the
regulatory proceedings, Winston learned that he and his firm
were under federal investigation for securities fraud. He was
indicted in 2001 in the Eastern District of New York and in 2005
pleaded guilty to conspiracy to commit securities fraud and
conspiracy to commit money laundering, the ruling stated.
Winston was sentenced in 2005 to 10 years' probation and
ordered to pay more than $108 million in restitution.
Sorkin did not represent Winston during the criminal matter,
but Winston said he discussed the allegations with Sorkin in
connection with the NASD proceeding, according to the ruling.
Sorkin said he did not recall the 1999 NASD proceeding but did
not deny he represented Winston at the time.
Around the same time that Winston was facing the NASD and
federal investigations, he began dating Eve Lorber, the daughter
of Annette Lorber, th e ruling stated. They were married in 2000.
After Annette Lorber's husband died, Winston began managing
the family's finances, the ruling stated, and allegedly siphoned
off $10 million.
Annette Lorber filed a civil racketeering lawsuit against
Winston and several alleged co-conspirators in July. In August,
Winston moved to disqualify Sorkin from representing her.
In his motion, Winston argued that Sorkin had access to
privileged information about his criminal case, o btained during
the NASD investigation, which could be used in an attempt to
undermine his reputation during the civil racketeering trial.
Winston also alleged in a subsequent filing that Sorkin had
improperly used a probation memo drafted by Winston's former
counsel to bring the racketeering litigation.
Judge Spatt agreed that Sorkin should be disqualified.
Moreover, although the probation memo was never filed in the
criminal case, Spatt said Sorkin's use of the memo in connection
with the racketeering litigation was improper. However, he
denied Winston's motion to dismiss the complaint.
Judd Burstein, who represents Winston, said that he had
tried to convince Sorkin to step aside from the case for months.
"I wish it had not gone this far," Burstein said.
The case is Lorber v. Winston, U.S. District Court for the
Eastern District of New York, No. 12-3571.
For Lorber: Ira Sorkin of Lowenstein Sandler
For Winston: Judd Burstein.
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