Legal Briefing: IRS and Justice Department Target More Rich Tax Cheats
HSBC Clients Investigated for Tax Fraud
Swiss bank UBS (UBS) and its wealthy clients have garnered the majority of the headlines lately when it comes to secret overseas accounts being used to hide money from the IRS. Now, with the UBS situation near resolution, a new set of Justice Department targets has emerged: Clients of London-based HSBC Holdings (HBC), mostly those with ties to India and Singapore. According to Bloomberg, the DOJ has sent letters to those under investigation, notifying them of the inquiry. Given that HSBC isn't named in the letters, and also given that all the people who have received them are HSBC clients and the Justice Department has their names and addresses, it appears that HSBC is cooperating with the investigation. Now that UBS has submitted to the pressure of the U.S. government, will all the other "wealth management" firms out their tax-cheating clients? The federal government could use the money.
Novartis Loses Another Big Employment Suit
Not long ago, Novartis (NVS) lost a huge sex discrimination lawsuit. On Tuesday, Novartis lost another employment case, this one wage-and-hour suit: A judge has found that its pharmaceutical sales representatives are entitled to time-and-a-half overtime, just like other regular employees, reports Bloomberg. Unlike the sex discrimination case, which Novartis could see reversed on appeal -- however unlikely that might be -- the wage-and-hour decision came from the Second Circuit Court of Appeals, leaving Novartis with recourse only to the U.S. Supreme Court. Simultaneously, the Second Circuit similarly ruled that pharmaceutical sales reps for the former Schering-Plough were entitled to overtime. (Schering merged with Merck (MRK) late last year.)
Irritated Chicago City Council Passes Vulnerable Gun Law
Chicago, fresh off a Supreme Court loss on its gun ban, has just enacted a new gun law so similar to the original that it is not only certain to be immediately and expensively litigated, the law is likely to be struck down, leaving the city with nothing.
The Chicago City Council decided that while Americans may have the right to have guns in their homes, that right doesn't extend to their garages or porches. Essentially, these local lawmakers have decided the city should spend its time and money litigating what constitutes one's "home" for the purposes of defining the specific square footage Americans have the right to defend with their guns. This sounds to me more like a fit of pique than a real effort to craft good policy in the face of new legal requirements. Far less restrictive gun laws are expected to face challenges, perhaps successful ones.
And in the Business of Law:
• Some have been calling the graduates of 2009 a lost class. Shearman & Sterling offers more evidence why. The New York Law Journal reports that Shearman just told the 2009 grads it "hired" and then deferred for a year that it was deferring them again, this time until January or February, 2011.
• Chadbourne & Parke LLP has sued ex-partner Charles Gibbs over fees, reports the New York Law Journal. Chadbourne wants at least $768,000; Gibbs says his payment of $27,500 covers what Chadbourne is owed, but he's willing to settle for an additional $500,000. That's quite a jump.
• And finally, Sullivan & Cromwell's mysterious billing rates remain mysterious, much to the chagrin of the AmLaw Litigation Daily.