Block on Trump's Asylum Ban Upheld by Supreme Court
Unbeknownst to many (okay, almost everyone), there's a secret club of high-powered in-house attorneys that meets annually to share tips and coordinate strategy. The group, which includes the top lawyers from some of the world's biggest banks, doesn't have a name, or even an official membership list, Bloomberg reports. But at this year's meeting, they had one common foe: consumer class actions.
This year, in-house attorneys from Barclays, Citigroup, Goldman Sachs, and more, gathered at Versailles (yes, the "let them eat cake" Versailles) to share how best to defend against class action suits accusing them of market manipulation. Here's what they came up with.
The secretive group's annual meeting was held in May (in a hotel near Versailles, not in the palace itself), but just reported by Bloomberg this month. Indeed, this is the first time the existence of the group has even been reported. While the meetings "tend to feature discussions of nuts-and-bolts issues such as managing relationships with the board and whether compliance personnel should receive stock incentives," sources say, this year was slightly different.
Attendees arrived, Bloomberg's Greg Farrell and Keri Geiger write, "primed to focus on a common scourge: class-action lawyers." The focus on class actions, instead of stock incentives, may have been inspired by Citigroup's (then recent-ish) agreement to settle a lawsuit accusing the bank, and many others, of conspiring to limit competition in credit-default swaps. Citigroup was the first domino to fall. Soon after, other banks followed, and a total of $1.87 was paid out in settlements.
That's a change from the traditional strategy, which often saw companies coordinate defenses and present a united front. But, according to Farrell and Geiger, "class-action lawyers have figured out a way to fracture these alliances."
They reach a settlement with one bank, then ratchet up pressure on the others. Each bank knows that the last to settle will probably pay the heftiest price. That's because of a legal theory called joint and several liability, in which a company found in court to be even partially to blame can end up on the hook for all the damages.
The in-house attorneys gathered in Versailles wanted to make sure it didn't happen again. Morgan Stanley's Chief Legal Officer Eric Grossman urged his colleagues to hold out against quick settlements, according to Bloomberg. Some suggested that all banks wait at least 60 days after the filing of a motion to dismiss "before going their own way." Others recommended giving their counterparts 48 hour's notice before entering settlement talks.
The secret coterie of banking industry attorneys was almost entirely unknown until Bloomberg's report. The idea for the group came from Robert Mundheim, whose resume includes stints as general counsel for the Department of the Treasury, dean of Penn Law School, G.C. for Salomon Smith Barney, and, currently, of counsel at Shearman & Sterling.
The annual meetings have been going on for about two decades, with Mundheim personally selecting who gets to attend. This year's guests included including Stephen Cutler of JPMorgan, Gary Lynch of Bank of America, and Gregory Palm of Goldman Sachs, along with attorneys for European banks such as UBS, Credit Suisse, and Deutsche Bank.
If you're interested in joining the camarilla, though, you might want to wait awhile before reaching out to Mundheim for an invitation. The group was not happy to have its confidentiality breached, according to Bloomberg. That might make it a bit harder to wriggle your way in.
Meeting with a lawyer can help you understand your options and how to best protect your rights. Visit our attorney directory to find a lawyer near you who can help.