Paper Trail

PAPER TRAIL….Via Stephen Bainbridge, here’s a case in which a Texas law firm agreed to pay $22 million because it had concealed knowledge of a client’s illegal activity. The case involved a Ponzi scheme run by Russell Erxleben, a former NFL placekicker. Do any of these names sound familiar?

Daniel N. Matheson III, a former Locke Liddell partner who represented Erxleben, said in his deposition that he knew in March 1998 that $8 million in AFI’s losses hadn’t been reported to investors….A few days later, Texas securities regulators seized its accounts and put the company into receivership. Harriet Miers, co-managing partner of Locke Liddell, said the firm denies liability in connection with its representation of Erxleben. “Obviously, we evaluated that this was the right time to settle and to resolve this matter and that it was in the best interest of the firm to do so,” Miers said.

I’m sure Miers knew nothing about this, of course. Still, a lawyer who knows how to paper over fishy activity sounds like just the kind of gal that would appeal to George Bush, doesn’t it?

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