Legal News

Indictment Cranks Up Heat on Proskauer?s Sjoblom

By Amir Efrati

Tuesday's indictment (click here) in the Stanford Financial Group matter was focused primarily at Laura Pendergest-Holt, the firm’s chief information officer. Pendergest-Holt pleaded not guilty on Thursday to the two charges lodged against her — both related to an alleged plot to obstruct an SEC investigation into the company.

But the indictment also turns up the heat on Proskauer Rose partner Tom Sjoblom, about whom we’ve posted before (here, here and here), and whom Pendergest-Holt herself sued in March. Click here for a story from Business Week on the matter.

The indictment alleges that "Attorney A" (Sjoblom) and others made misleading statements to the SEC in February in order to cause the agency to delay interviewing Allen Stanford and the Stanford CFO about the firm's financial condition. Sjoblom, the indictment alleges, also misled the SEC by telling the agency that Pendergest-Holt and Stanford's president would be better witnesses who could offer the agency better information regarding the firm. Sjoblom allegedly said that Stanford and his CFO "were executive level officers who were not involved in the 'nuts and bolts' of business operations and could not tell the SEC attorneys about details" of the firm's assets. The SEC agreed to delay the depositions of Stanford and his CFO.

Sjoblom has not been charged with wrongdoing.

The indictment then alleges that Sjoblom sent an email to Pendergest-Holt and the Stanford CFO regarding the need to tell the SEC about all of the firm's investments. He wrote that they needed to "rise to the occasion" and that "our livelihood depends on it."

Later, of course, prosecutors say Pendergest-Holt twice lied during sworn testimony before the SEC by saying she didn't know about a key part of the firm's investments, known as Tier III. The value of those investments, purportedly worth billions of dollars, was largely fictional, the trustee of Stanford's firm said in a recent report.

James Cole, Sjoblom’s attorney, did not immediately return a phone call. We’ll let you know if we hear back.

Full post as published by Law Blog - WSJ.com on May 14, 2009 (boomark / email).