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.

CRIMINAL MATTER

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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