Dreier Arraigned, Receiver Assigned

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Dreier LLP founder Marc Dreier was arraigned yesterday on federal charges of selling $113 million in fake securities to two hedge funds.

Separately, the Securities and Exchange Commission filed suit to recover the $113 million. Southern District of New York Judge Miriam Goldman Cedarbaum will appoint Mark Pomerantz of Paul Weiss Rifkind Wharton & Garrison as receiver to protect Dreier’s assets.

In another civil suit filed Monday, Wachovia Bank alleged the Dreier firm had defaulted on a $9 million revolving credit note made in connection with a $14.5 million credit agreement and a term note in the amount of $5.5 million. Wachovia is asking the court to enjoin the firm or any of its current, former or departing attorneys from disposing of any collateral belonging to the bank.

  

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The criminal complaint charges Dreier with one count each of securities and wire fraud. He faces a maximum sentence of 20 years in prison if convicted on either count. He also could be forced to pay a fine equal to twice the value of any illegal gains.

Via Law.com.