Sunday, November 27, 2016

The End Of A Bad Long Weekend -- For Martin Shkreli: Federal Criminal Procedure Department

UPDATED: Will this new release of the privilege, on the $900,000 note document disclosure hinted at below, lead to a new, ninth count, in the federal felony indictment? We shall see. End, updated portion.

Well, as we wind down another of our great holiday weekends -- with many, many loved ones now heading to the exits -- Retrophin's lawyers at Cooley have just now weighed in. [Recent background here.]

It is significant that the firm filed this six-page letter on a Sunday.

Mr. Shkreli's idiotic, and nearly complete, disregard for the most basic of separation-of-entities principles has hastened what may be his own undoing -- leading inexorably to up to 10 years as an orange-clad guest of a federal facility. At least three entities have been required to respond to government subpoenas -- and in each of those, Mr. Shkreli cannot seek much protection, especially since he routinely violated his own email policies, at those entities.

Now we learn that all the parties opposing Mr. Shkreli feel Mr. Biestek never held a privilege -- so it may well turn out that Mr. Shkreli's waiver of privilege only serves to bolster the government's evidence under the indictments. Here's a bit -- from the Sunday letter, from Cooley LLP:

. . . .Katten and Retrophin agree that for the period between August 2012 (when Retrophin began archiving emails) and September 30, 2014, when Mr. Shkreli was replaced as Retrophin’s CEO (and no longer had a Retrophin email account) Retrophin has a record of all of the emails between Katten and Retrophin, MSMB and Shkreli, and, therefore, Retrophin can begin its review of that segment of Katten’s files using its own email files. Retrophin has already begun searching these emails for additional documents within the scope of its existing waiver (and the $900,000 Note) and will substantially complete its production of responsive documents on December 6th. . . .


[Footnote No. 1]: Retrophin objects to Mr. Brafman’s proposal, which he made in his letter dated November 23 (Dkt. 116), that Katten turn over to Mr. Shkreli all of the MSMB documents. If Katten had a reliable way of identifying those documents, then Retrophin would agree to that proposal. But Katten does not believe it can do so, and all of the parties agree that culling those documents using the search term “MSMB” would identify a substantial number of Retrophin documents. Thus, Retrophin submits that the best approach is to adjudicate Mr. Biestek’s invocation of privilege first.

The Government contends that Mr. Biestek never had a privilege in MSMB’s documents. Retrophin will not weigh in on that issue at this point but contends that any such privilege was waived because, to the extent that Katten may have provided legal advice to MSMB after September 2012, Katten’s communications with Messrs. Biestek or Shkreli were sent and received on Retrophin’s email server, and certain communications prior to that period are also stored on Retrophin’s network. According to Retrophin’s E-mail Policy (Exhibit A) and its Code of Business Conduct and Ethics (Exhibit B), Messrs. Biestek’s and Shkreli’s communications with Katten on behalf of MSMB stored on Retrophin’s network belong to Retrophin. See Ex. A ¶ 3 (“[a]ll electronic data (including communications received, sent, to be sent or only partially drafted) that are transmitted through Company facilities and/or stored on a Company computer or storage media are the property of the Company.”); Ex B. at 3 (“Users should have no expectation of personal privacy in their use of Company communications systems or information sent to or from or stored in or on Company communications systems. . . . Even personal messages on the Company’s e-mail and voicemail systems are Company property.”); see also Exhibit C ¶ 18(i) (Mr. Biestek’s employment agreement, in which he committed to sign and be bound by the Code of Ethics). . . .

Clearly the able Judge Matsumoto will have to rule on these issues -- these parties are at loggerheads. Now I'm off for a series of airport drop-offs, and train station loadings-out. . . smile -- and we will do it all again in four weeks! Grinzzz. . . .


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