{"id":126151,"date":"2025-07-09T14:03:21","date_gmt":"2025-07-09T22:03:21","guid":{"rendered":"https:\/\/xira.com\/p\/2025\/07\/09\/biglaw-firm-dragged-into-case-accusing-client-of-whitewashing-sketchy-investments\/"},"modified":"2025-07-09T14:03:21","modified_gmt":"2025-07-09T22:03:21","slug":"biglaw-firm-dragged-into-case-accusing-client-of-whitewashing-sketchy-investments","status":"publish","type":"post","link":"https:\/\/xira.com\/p\/2025\/07\/09\/biglaw-firm-dragged-into-case-accusing-client-of-whitewashing-sketchy-investments\/","title":{"rendered":"Biglaw Firm Dragged Into Case Accusing Client Of Whitewashing Sketchy Investments"},"content":{"rendered":"
\"\"
<\/figcaption><\/figure>\n

NSO Group builds spyware that authoritarian regimes love. After Washington Post journalist Jamal Khashoggi was assassinated in the Saudi consulate, NSO\u2019s CEO publicly declared, \u201cWe had nothing to do with this horrible murder.\u201d However, leaked data and forensic analysis revealed that NSO\u2019s products seem to have quite a bit to do with this horrible murder<\/a>. No one at NSO set out to murder a journalist, but when you provide authoritarian regimes technology to spy on their dissidents\u2026 natural and logical consequences.<\/p>\n

Blood money can be as green as any other money, but investments have a tendency to take a hit when the company gets featured in Amnesty International reports. If there\u2019s a risk your investment might end up knee deep in an assassination, that\u2019s information that such a fund might arguably find\u2026 material?<\/p>\n

Those same funds may have concerns about foreign bribes or international gambling sites with covert ownership. <\/p>\n

One fund invested in such iffy companies under the management of Novalpina Capital Partners and it gave rise to a whole mess of foreign legal actions. But cutting across all the suits, the fund claims Novalpina misled it about the nature of these transactions and ultimately caused big losses while Novalpina claims it\u2019s owed a bunch of money. But of particular interest to the American Biglaw audience is a 28 U.S.C. \u00a7 1782 petition seeking domestic discovery for use in a foreign proceeding filed in the S.D.N.Y.:<\/p>\n

\n

Weil, and particularly Gerhard Schmidt, co-managing partner of Weil\u2019s German offices, was the Fund\u2019s key legal advisor when under Novalpina GP\u2019s control, including for all major acquisitions undertaken by the Fund (including NSO, LXO and Maxbet)\u2026.<\/p>\n

Accordingly, Weil was responsible for conducting due diligence, negotiating, financing assistance, drafting transaction documentation, and supporting NCL in the management of Fund investments\u2026. Schmidt managed the Fund\u2019s investments by acting as a director in various Novalpina and Fund entities, and was one of the directors responsible for the Fund\u2019s governance of NSO.<\/p>\n<\/blockquote>\n

The fund wants the firm to produce a wide array of firm documents. Or, as the case may more realistically be, a privilege log listing a bunch of documents Weil won\u2019t hand over. That said, the petition claims its requests primarily target \u201ccorrespondence Weil had with third parties, or documents provided to Weil by third parties.\u201d Weil isn\u2019t a party to the lawsuit so they aren\u2019t being accused of wrongdoing, but there\u2019s a point where technically accurate analysis can open the door to client whitewashing. NSO was described as having \u201cbest in class\u201d governance and compliance. In the class of spyware manufacturers\u2026 maybe that\u2019s not a high bar? The petition claims they already have documents showing Weil involved removing references to a controversial Russian business figure\u2019s ownership stake in a gambling site\u2026 where\u2019s the materiality line on that?<\/p>\n

We reached out to Weil about this matter but they did not respond. Which is understandable\u2026 it\u2019s ongoing litigation.<\/p>\n

This isn\u2019t even the only 1782 petition in the matter, with Novalpina targeting the fund\u2019s American-based current investment advisor as well as the Oregon Public Employees Retirement System, the fund\u2019s largest investor. <\/p>\n

You know who probably doesn\u2019t like finding out their money is aiding in assassinations? Public pension funds! <\/p>\n

But this all highlights the delicate game of telephone driving private equity. Pension funds rely on the say-so of the funds, who rely on the investment managers, who rely on the due diligence of law firms. It\u2019s a legal version of human centipede, with each link more potentially obscured than the last, and you\u2019re just trusting whatever comes out the other end.<\/p>\n

Adding to the lunacy surrounding this case, the 1782 petition was submitted by Stone Hilton, the law firm you probably most remember connect with the words, \u201cviolently anally raped by a cylindrical asteroid in front of my wife and children<\/a>,\u201d because that\u2019s what the co-founder of Stone Hilton allegedly said he hoped to do to the\u00a0First Assistant Attorney General of Texas. <\/p>\n

2025 has been a wild year.<\/p>\n

(Check out the 1782 motion on the next page\u2026)<\/em><\/p>\n

\n

\"Headshot\"Joe Patrice<\/a>\u00a0is a senior editor at Above the Law and co-host of Thinking Like A Lawyer<\/a>. Feel free to\u00a0email<\/a> any tips, questions, or comments. Follow him on\u00a0Twitter<\/a>\u00a0or Bluesky<\/a> if you\u2019re interested in law, politics, and a healthy dose of college sports news. Joe also serves as a Managing Director at RPN Executive Search<\/a>.<\/em><\/strong><\/p>\n<\/p>\n

The post Biglaw Firm Dragged Into Case Accusing Client Of Whitewashing Sketchy Investments<\/a> appeared first on Above the Law<\/a>.<\/p>\n

\"\"
<\/figcaption><\/figure>\n

NSO Group builds spyware that authoritarian regimes love. After Washington Post journalist Jamal Khashoggi was assassinated in the Saudi consulate, NSO\u2019s CEO publicly declared, \u201cWe had nothing to do with this horrible murder.\u201d However, leaked data and forensic analysis revealed that NSO\u2019s products seem to have quite a bit to do with this horrible murder<\/a>. No one at NSO set out to murder a journalist, but when you provide authoritarian regimes technology to spy on their dissidents\u2026 natural and logical consequences.<\/p>\n

Blood money can be as green as any other money, but investments have a tendency to take a hit when the company gets featured in Amnesty International reports. If there\u2019s a risk your investment might end up knee deep in an assassination, that\u2019s information that such a fund might arguably find\u2026 material?<\/p>\n

Those same funds may have concerns about foreign bribes or international gambling sites with covert ownership. <\/p>\n

One fund invested in such iffy companies under the management of Novalpina Capital Partners and it gave rise to a whole mess of foreign legal actions. But cutting across all the suits, the fund claims Novalpina misled it about the nature of these transactions and ultimately caused big losses while Novalpina claims it\u2019s owed a bunch of money. But of particular interest to the American Biglaw audience is a 28 U.S.C. \u00a7 1782 petition seeking domestic discovery for use in a foreign proceeding filed in the S.D.N.Y.:<\/p>\n

\n

Weil, and particularly Gerhard Schmidt, co-managing partner of Weil\u2019s German offices, was the Fund\u2019s key legal advisor when under Novalpina GP\u2019s control, including for all major acquisitions undertaken by the Fund (including NSO, LXO and Maxbet)\u2026.<\/p>\n

Accordingly, Weil was responsible for conducting due diligence, negotiating, financing assistance, drafting transaction documentation, and supporting NCL in the management of Fund investments\u2026. Schmidt managed the Fund\u2019s investments by acting as a director in various Novalpina and Fund entities, and was one of the directors responsible for the Fund\u2019s governance of NSO.<\/p>\n<\/blockquote>\n

The fund wants the firm to produce a wide array of firm documents. Or, as the case may more realistically be, a privilege log listing a bunch of documents Weil won\u2019t hand over. That said, the petition claims its requests primarily target \u201ccorrespondence Weil had with third parties, or documents provided to Weil by third parties.\u201d Weil isn\u2019t a party to the lawsuit so they aren\u2019t being accused of wrongdoing, but there\u2019s a point where technically accurate analysis can open the door to client whitewashing. NSO was described as having \u201cbest in class\u201d governance and compliance. In the class of spyware manufacturers\u2026 maybe that\u2019s not a high bar? The petition claims they already have documents showing Weil involved removing references to a controversial Russian business figure\u2019s ownership stake in a gambling site\u2026 where\u2019s the materiality line on that?<\/p>\n

We reached out to Weil about this matter but they did not respond. Which is understandable\u2026 it\u2019s ongoing litigation.<\/p>\n

This isn\u2019t even the only 1782 petition in the matter, with Novalpina targeting the fund\u2019s American-based current investment advisor as well as the Oregon Public Employees Retirement System, the fund\u2019s largest investor. <\/p>\n

You know who probably doesn\u2019t like finding out their money is aiding in assassinations? Public pension funds! <\/p>\n

But this all highlights the delicate game of telephone driving private equity. Pension funds rely on the say-so of the funds, who rely on the investment managers, who rely on the due diligence of law firms. It\u2019s a legal version of human centipede, with each link more potentially obscured than the last, and you\u2019re just trusting whatever comes out the other end.<\/p>\n

Adding to the lunacy surrounding this case, the 1782 petition was submitted by Stone Hilton, the law firm you probably most remember connect with the words, \u201cviolently anally raped by a cylindrical asteroid in front of my wife and children<\/a>,\u201d because that\u2019s what the co-founder of Stone Hilton allegedly said he hoped to do to the\u00a0First Assistant Attorney General of Texas. <\/p>\n

2025 has been a wild year.<\/p>\n

(Check out the 1782 motion on the next page\u2026)<\/em><\/p>\n

\n

\"Headshot\"Joe Patrice<\/a>\u00a0is a senior editor at Above the Law and co-host of Thinking Like A Lawyer<\/a>. Feel free to\u00a0email<\/a> any tips, questions, or comments. Follow him on\u00a0Twitter<\/a>\u00a0or Bluesky<\/a> if you\u2019re interested in law, politics, and a healthy dose of college sports news. Joe also serves as a Managing Director at RPN Executive Search<\/a>.<\/em><\/strong><\/p>\n<\/p>\n

The post Biglaw Firm Dragged Into Case Accusing Client Of Whitewashing Sketchy Investments<\/a> appeared first on Above the Law<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

NSO Group builds spyware that authoritarian regimes love. After Washington Post journalist Jamal Khashoggi was assassinated in the Saudi consulate, NSO\u2019s CEO publicly declared, \u201cWe had nothing to do with this horrible murder.\u201d However, leaked data and forensic analysis revealed that NSO\u2019s products seem to have quite a bit to do with this horrible murder. […]<\/p>\n","protected":false},"author":3,"featured_media":126112,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[16],"tags":[],"class_list":["post-126151","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-above_the_law"],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/xira.com\/p\/wp-content\/uploads\/2025\/07\/Headshot-300x200-uzeXT8.jpeg?fit=300%2C200&ssl=1","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/posts\/126151","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/comments?post=126151"}],"version-history":[{"count":0,"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/posts\/126151\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/media\/126112"}],"wp:attachment":[{"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/media?parent=126151"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/categories?post=126151"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/tags?post=126151"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}