In an ironic twist, the New York County (Manhattan) District Attorney's Office is investigating the recently-deposed chairman of Dewey LeBouef, the firm that still carries the name of Thomas Dewey, the near-president who rose to national prominence as a gangbusting nonpolitical Manhattan District Attorney.

The investigation, apparently based on facts brought to the District Attorney's attention by disgruntled partners as the firm teeters on the verge of extinction, concerns whether the former chairman, Steven H. Davis, committed financial improprieties.  One area of investigation reportedly is whether Davis misled investors, presumably insurance companies and/or banks, about the firm's financial condition, see here, perhaps involving its commitments to highly-compensated partners, many lateral hires.  American Lawyer last month announced that it was revising the figures it published based on the firm's report of its finances since those numbers differed from what the firm reported to the media.  The firm defended its numbers, claiming that it used different methodologies at different times. 

Certainly, different financial reports made at different times using different methodologies for different purposes may reasonably be different.  And, even giving false figures to American Lawyer may not be criminal (I hesitate to state so definitively in this day of overcriminalization of law and overreaching by law enforcement).  However, false statements to lenders or investors, who potentially will incur severe losses, because of the firm's inability to pay its debts, is a less certain matter.

The firm has mounted its own internal investigation — by two of its partners.  While I have no reason to believe that the investigation will be less than thorough and fair (and will likely save considerable money), the firm might have more prudently hired independent investigators invulnerable to accusations of conflict of interest, if only for public relations purposes.  Of course, if the firm dissolves, any internal investigation may fall by the wayside.

(goldman)