Court to Government: Don’t Tread on Attorney’s Fees

The United States Court of Appeals for the Second Circuit dealt a severe blow to efforts by federal prosecutors to dissuade employers from paying attorneys’ fees for indicted employees. The decision in U.S. v. Stein, No. 07-3042-cr, 2008 WL 3982104, at *1 (2d Cir. Aug. 28, 2008) sends a strong message to the government that the days of interfering with an employer’s policy of advancing fees are now over. The court reached the extraordinary result of dismissing indictments against partners and employees of the KPMG accounting firm, and the decision may very well bring about the death of the so-called Thompson and McNulty Memoranda with respect to the issue of advancement of fees.

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