& Kim LLP (“K&K” or the “Firm”) and The Law Offices of Jay Y. Mandel, PLLC
(“Mandel”) from continuing to represent Respondents in an arbitration they commenced
against Petitioners seeking damages in connection with Respondents’ purchase of auction
rate securities (,‘A”’’> from Lehman. The arbitration, which is at an early stage, is being
administered at the New York City office of the Financial Industry Regulatory Authority
(“FINRA’’) and has been assigned Case No. 08-00156 (the “Arbitration”). Petitioners
also seek a stay of the Arbitration pursuant to CPLR 2201 pending a ruling on
Disqualification of Respondents’ counsel, K&K, is required because Sean
Casey, former Deputy Chief of the Business and Securities Fraud Unit of the US.
Attorney‘sOffice in the Eastern District of New York, recently joined K&K as a partner
While at the US. Attorney’s Office, Mr. Casey led a criminal investigation (the
“Investigation”) of Lehman’s sale of auction rate securities (“ARS”) to Respondents,
among others. As part of the Investigation, subpoenas were issued under Mr. Casey’s
name requiring three of the Petitioners to appear and give testimony before a grand jwy.
The same A R S transactions that were a subject of the federal government’s Investigation
are the subject of the pending Arbitration. On information and belief, the Investigation is
Respondents do not contest that Mr. Casey is disqualified from acting as
their counsel in the Arbitration (nor could they), but contend his disqualification should
not be imputed to the F i m because the Firm has erected a screen isolating him from the
filesand the attorneys working on the Axbitration. Respondents are incorrect. Under the
governing case law, because the confidential information Mr. Casey acquired at the U.S.
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