The Real Deal New York

SEC claims ex-Dewey & LeBoeuf execs cooked the books

Criminal charges also expected to be filed against defunct firm's top managers
March 06, 2014 01:15PM

The U.S. Securities and Exchange Commission filed a civil lawsuit against former executives from real estate law firm Dewey & LeBoeuf today, and criminal charges are expected to follow.

Ex-Dewey chairman Steven Davis, former executive director Stephen DiCarmine, ex-chief financial officer Joel Sanders, former finance director Frank Canellas and ex-controller Thomas Mullikin are expected to be the target of charges for defrauding investors and lenders, a source familiar with the matter told Reuters. The related SEC complaint accused the group of misleading investors about the state of the law firm’s finances in marketing materials for a $150 million bond offering back in 2010.

Dewey executives “orchestrated and executed a bold and long-running accounting fraud intended to conceal the firm’s precarious financial condition,” the securities regulator said in a statement cited by Reuters. Attorney’s for Davis, DiCarmine and Sanders did not immediately return the news wire’s calls requesting comment, while a Manhattan District Attorney spokeswoman and lawyer for Canellas declined comment.

Dewey & LeBoeuf, created in a merger between Manhattan-based Dewey Ballantine and LeBoeuf, Lamb, Greene & MacRae in 2006, filed for bankruptcy protection in 2012. The firm, which had a large real estate practice, owed $225 million to secured lenders, $50 million to landlords at its office buildings and $40 million to vendors at the time, as The Real Deal reported. [Reuters]Julie Strickland

  • Char4Dew

    its Real Estate, like the old days. What did you think would happen?
    Once REBNY dropped the ball…in order to get more members (money) TO get all the brokers to join them they stooped keeping the industry ethics, it went to its original position. DOG EATS DOG… so why do people join them? Besides drinking the cool aid.