The accounting firm KPMG asked a federal appeals panel yesterday to rule that a district judge could not compel the firm to pay the legal fees of former executives facing criminal charges in a tax-shelter fraud investigation.

Kpmg

The accounting firm KPMG asked a federal appeals panel yesterday to rule that a district judge could not compel the firm to pay the legal fees of former executives facing criminal charges in a tax-shelter fraud investigation.

Appearing before a three-judge panel of the United States Court of Appeals for the Second Circuit, a lawyer for KPMG, Sheila L. Birnbaum, argued that the district judge, Lewis A. Kaplan, did not have the authority to conduct a proceeding on legal defense costs. The matter should instead be decided by an arbitration panel, as set out in the firm’s partnership agreement, Ms. Birnbaum said.

In June, Judge Kaplan found that prosecutors violated the constitutional rights of 16 former KPMG executives by putting undue pressure on the firm not to pay their legal fees. The former partners have since pursued a civil action before Judge Kaplan, seeking advance payment toward those costs.

Last week, the judge indefinitely delayed the criminal trial, saying the fee dispute would probably not be decided before the trial was scheduled to start in January.

But David Spears, a lawyer for a former vice chairman of KPMG, Jeffrey Stein, argued yesterday that the circuit judges did not have jurisdiction to hear KPMG’s appeal and that a trial on the fee dispute before Judge Kaplan was the proper way to proceed.


Wednesday 22 November 2006 LAWFUEL – Law News Network – The Austral…

Wednesday 22 November 2006 LAWFUEL – Law News Network – The Australian Securities and Investments Commission (ASIC) has succeeded in its application to appoint a provisional liquidator to Sydney Investment House (Newcastle) Pty Ltd – one of seven companies related to the Sydney Investment House Group. The Supreme Court of New South Wales has appointed Mr Quentin Olde, of Taylor Woodings, as provisional liquidator to Sydney Investment House (Newcastle) Pty Ltd which is responsible for the development of the Soque Apartments located at 13 Roslyn Street, Islington, Newcastle.

Mr Olde was also appointed by the court as receiver and manager to the assets comprised in a number of trusts associated with director of the companies, Mr Edwin Goulding. This action follows the appointment of Mr Olde to the Sydney Investment House Group’s seven other companies on 27 October 2006 following allegations the companies and two directors had contravened the Corporations Act and ASIC Act. Specifically, ASIC alleges the companies and two of its directors, Mr Edwin Goulding and Mr Steven Geagea, were involved in the operation of an unregistered managed investment scheme. It is also alleged the two men made false and misleading statements to investors to encourage them to invest with related company, Sydney Investment House Capital Limited (SIH Capital).

ASIC has also expressed concerns that some of the funds raised by SIH Capital through the issue of a prospectus were then lent to related companies and trusts by the defendants in a manner contrary to statements made in the prospectus. ASIC is seeking orders and declarations in relation to these and other allegations. A hearing date in relation to these matters has not been set by the court. The following companies associated with the Sydney Investment House Group have now been placed into provisional liquidation: • Sydney Investment House Equities Pty Ltd (SIH Equities), • Sydney Investment House Capital Limited (SIH Capital), • Sydney Investment House Pty Ltd, • Sydney Investment House (Beaconsfield) Pty Ltd, • Melbourne Investment House Pty Ltd, • Melbourne Investment House (Hawthorn) Pty Ltd, • Melbourne Investment House (Collingwood) Pty Ltd, and • Sydney Investment House (Newcastle ) Pty Ltd.

Background SIH Capital is an unlisted public company which raised over $8.4 million from the public through the issue of redeemable preference shares between November 2004 and June 2005. The funds raised from the public were lent to other companies within the Sydney Investment House Group that were controlled by Mr Goulding. Many of the investors in SIH Capital were previously investors in SIH Equities and had their investments rolled over into SIH Capital. For further information contact: Allen Turton Deputy Executive Director, Enforcement Telephone: 02 9911 2338 Mobile: 0411 549 236 Emma Forehan ASIC Media Unit Telephone: 03 9280 3354 Mobile: 0409 702 310

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