Nick Even in Law360: Robbins Geller Flub May Spur Change On Secret Witnesses

01/16/2014


A confidential witness scandal involving Robbins Geller Rudman & Dowd LLP has reignited debate in the securities bar over the widespread use of anonymous sources in class action suits, with some defense attorneys rooting for reform.

An Illinois federal judge is poised to decide whether to impose sanctions on Robbins Geller over its handling of confidential witness Bishnujee Singh. According to the firm, Singh initially claimed he had worked for The Boeing Co. and had firsthand knowledge of a securities fraud scheme, but later admitted he worked for a Boeing contractor and refuted the allegations attributed to him in an amended complaint. Boeing's attorneys at Perkins Coie LLP have accused Robbins Geller of ignoring obvious red flags in Singh's account while touting the information as a smoking gun...

Plaintiffs attorneys worry privately that sanctions may have a chilling effect on the use of confidential witnesses. They say the case has already raised awareness of “best practices,” such as having an attorney present when a key confidential witness is interviewed, when possible; keeping copious notes of the discussion; and providing the witness with a copy of the complaint.

Defense attorneys, meanwhile, have seized on the case as a potential turning point in the long-running debate.

Nick Even, who chairs the securities and shareholder litigation practice at Haynes and Boone, LLP, called the case “the perfect storm.” Taking a cue from Boeing, he said, defense attorneys will now be more likely to file motions to reconsider rulings in which a court refused to dismiss a complaint involving confidential witness claims.

Excerpted from Law360, January 16, 2014. To view full article, click here (subscription required).

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