Hunton Mum on Whether Firm Lawyer Is Alleged Tipsy Tipster
Hunton & Williams declined to comment Thursday about whether one of its Washington, D.C.–based IP partners drunkenly tipped off the defendant named in an insider trading suit brought last week by the Securities and Exchange Commission about the planned takeover of a pharmaceutical client during a 2010 dinner conversation.
According to the SEC's complaint in the case [PDF], which was filed September 20 in U.S. district court in Florida, the transaction in question is Pfizer's 2010 purchase of King Pharmaceuticals. The SEC states in the complaint that investment adviser Tibor Klein learned about the $3.6 billion deal from attorney Robert M. Schulman during a dinner at Schulman's home in August 2010, two months before the acquisition was publicly announced. (Cadwalader, Wickersham & Taft advised Pfizer on that deal, while King Pharmaceuticals was represented by a team of Covington & Burling attorneys, according to The Am Law Daily's prior reporting.)
Though the SEC does not identify Schulman's firm in the complaint, a Washington, D.C.–based Hunton & Williams IP and patent litigation partner with the same name represented King Pharmaceuticals in connection with a patent case that was dismissed in Virginia federal court in August 2010, and D.C. bar records list only one attorney named Robert M. Schulman as licensed to practice in the district. A Hunton spokeswoman declined to comment when contacted by The Am Law Daily, and Schulman did not respond to a separate request for comment. (Law360—subscription required—first reported the news of the suit and the possible Hunton connection last week.)
The SEC complaint says Schulman "drank several glasses of wine and became intoxicated" at the dinner before blurting out the news that he had learned something was in the works for his client King Pharmaceuticals through litigation work he was handling for the company. According to the SEC, "Schulman intended to imply he was a 'big shot' who knew 'some kind of information' about King Pharmaceuticals."
The SEC complaint notes that Klein and Schulman had a "close professional and personal relationship" that dated back to at least 2000, and that Klein made a habit of visiting Schulman's home several times a year. Klein, whose firm Klein Financial Services is based in Valley Stream, New York, is one of two defendants named in the SEC's complaint. His friend, former Ameriprise Financial broker Michael Shechtman, is the other.
Schulman—who is identified as a former Nixon Peabody attorney on his LinkedIn profile and who has contributed articles to sibling publication The National Law Journal in the past—is not named as a defendant in the suit and no charges have been filed against him, despite the SEC's claim that he earned $15,500 in profits as a result of Klein's allegedly illegal trades. (The SEC claims Klein netted nearly $320,000 in total for more than 40 of his clients, including Schulman and Shechtman, and more than $8,800 for himself by purchasing King shares in August 2010 and then selling them after the deal with Pfizer was announced that October.)
An SEC spokeswoman declined to comment on the absence of charges against Schulman.