“Judge Rules Law Firm in Litigation With Musk Can Hire Ex-SEC Chief Litigation Counsel” —
- “The U.S. District Court for the Southern District of New York ruled Thursday that Bernstein Litowitz Berger & Grossmann can hire as a partner Jorge G. Tenreiro, who held a number of positions at the U.S. Securities and Exchange Commission, including chief litigation counsel, and, most recently, served in the agency’s Office of Information Technology.”
- “Defendant Elon Musk argued that the ‘extremely short time’ that elapsed between the filing of an SEC action over the billionaire’s purchase of Twitter Inc. and Tenreiro’s outreach to BLB&G, which is lead counsel for the plaintiff, the Oklahoma Firefighters Pension and Retirement System, in a class action over the Twitter acquisition, created an ‘appearance of impropriety.’”
- “But U.S. Magistrate Judge Gabriel W. Gorenstein disagreed.”
- “‘[T]he timing of Tenreiro’s departure appears to have been precipitated by his being assigned to detail in an office with a focus unrelated to his prior work and the agency’s offering of a voluntary separation package,’ Gorenstein found. ‘More to the point, given that Tenreiro did not know that BLB&G was counsel in this case until sometime between March 15 and March 17, 2025, the length of the period between Tenreiro’s alleged involvement with SEC actions against Musk and outreach to BLB&G is immaterial.’”
- “Oklahoma Firefighters brought the underlying case, alleging that the defendants, who include Musk, committed securities fraud when Musk concealed his ownership stake in the social media platform X, then operating as Twitter. The putative class action is on behalf of investors who sold Twitter securities between March 25, 2022, and April 4, 2022.”
- “And on April 22, BLB&G asked the Southern District of New York to approve a ‘routine ethical screen’ of Tenreiro, court records show. BLB&G later clarified that the ex-SEC employee accepted an offer of employment from the law firm contingent on the court’s approval of the screening procedures, according to the opinion and order.”
- “Historically, Tenreiro was employed by the SEC from December 2013 to April 2025. Between October 2022 and November 2024, he secured several rulings against prominent digital asset companies as the deputy chief of the SEC’s Crypto Assets and Cyber Unit. In December 2024, Tenreiro was promoted to the agency’s chief litigation counsel.”
- “During Tenreiro’s tenure as chief litigation counsel, the SEC sued Musk in connection with his purchase of Twitter shares. Tenreiro claimed that he did not ‘substantively participate in the SEC investigation’ or any related matter.”
- “In January, Tenreiro began looking for outside work and was transferred to the IT department before his departure from the agency. The next month, an ex-classmate of Tenreiro’s connected him to BLB&G, and Tenreiro claimed that he first became aware of the law firm being counsel in the underlying case in mid-March.”
- “And in the opinion and order, Gorenstein found that the conflict check—which included Tenreiro identifying the cases brought by the law firm and ones connected to the SEC, and a consultation from a ‘professional legal ethics expert’—was sufficient under the Code of Professional Responsibility.”
- “‘For similar reasons, we find that Tenreiro’s ‘likes’ of social media posts do not create an appearance of impropriety, particularly since the posts have nothing to do with the SEC enforcement action against Musk or the instant litigation,’ Gorenstein ruled. ‘Accordingly, we conclude that BLB&G’s screening procedures cure Tenreiro’s conflict of interest.’”
Kerri Riley, Global Head of Conflicts at Quinn Emanuel dropped me a note (I always welcome reader tips!) to note that she’s co-authored an amendment to Rule 7.3 to prohibit solicitation of respondents in domestic violence cases prior to being served: “Proposed Amended Rule of Professional Conduct 7.3” —
- “Amended Rule 7.3 would: Address the documented risks, including a heightened risk of violence and death during separation from an abuser, by ensuring petitioners can complete safety planning and avail themselves of protections afforded by the courts. Creates a clear temporal boundary for when solicitation is permissible; and Address a specific, documented public safety concern.”
- “(f) Even when not otherwise prohibited by this rule, a lawyer shall not solicit professional employment from a respondent in a domestic violence restraining order proceeding in connection with such proceeding, until after the respondent has been legally served with notice of the proceeding and proof of service appears on the court docket.”
- “[5] Paragraph (f) addresses solicitation in domestic violence restraining order proceedings where solicitation of respondents prior to legal service may increase the risk of petitioner facing abuse, violence or even death. This limitation serves the State Bar’s mission to protect the public, as recognized in Business and Professions Code section 6001.1”
- Comments should be submitted using the online Public Comment Form. The online form allows you to input your comments directly and can also be used to upload your comment letter and/or other attachments.
“Judiciary Panel Seeks Comment on Proposal to Require ‘Grandparent’ Corporations Disclosure” —
- The federal judiciary’s Committee on Rules of Practice and Procedure will seek public comment on a proposal to require corporations named in lawsuits to disclose their parent and ‘grandparent’ organizations. The proposed rule was sparked by a suggestion from U.S. Court of Appeals for the Eighth Circuit Judge Ralph Erickson, who raised concerns that a judge could unknowingly hold a financial interest that requires recusal.”
- “‘Although there have not been serious concerns that judges have acted in a biased manner due to the lack of information on corporate grandparents or great grandparents, it can threaten perceptions of the court’s legitimacy and impartiality when a judge presides over a case in which she has an arguable financial interest,’ said Tenth Circuit Judge Allison Eid.”
- “The amendments approved for public comment would require disclosing any ‘parent business organization and any publicly held business organization that directly or indirectly owns 10% or more’ of a party.”
- “‘Requiring disclosure of direct or indirect owners of 10% or more of a party intends to prompt disclosure of grandparents or others who may own a significant share of a party via another intermediate entity,’ Eid said. ‘The language, in our view, is not perfectly precise, but the parties have long been trusted to meet their disclosure obligations.’”
- “The disclosure proposal now goes before the Judicial Conference of the United States and, if approved, to the U.S. Supreme Court for final approval.”
