Loading...
William Gericke, a former attorney at Cozen O’Connor, has been suspended from practicing law for one year in Pennsylvania after purchasing stock in a client’s company before a merger was announced. Gericke, who co-founded Cozen’s conflicts department in 2018 and its legal profession services group in 2020, was asked by another partner at the firm to run a conflict check on a potential merger between Liberty Property Trust, a client, and Prologis Inc., a real estate investment trust, in October 2019. News of the merger had not yet been made public at the time.
The day after the request, Gericke purchased 1,000 shares of Liberty Property Trust at $51 per share without informing Cozen O’Connor management of the transaction, according to a report by the disciplinary board. About 20 days later, the merger between Prologis and Liberty Property Trust was formally announced, causing Liberty Property Trust’s stock price to rise. Gericke then sold his shares for $61 per share, making a $10,000 profit.
After the Financial Industry Regulatory Authority investigated trading activity surrounding the merger announcement, the inquiry was escalated to the Securities and Exchange Commission (SEC), which subpoenaed Gericke in July 2021. Gericke resigned from Cozen O’Connor a few weeks later and admitted in August 2021 that his Liberty Property Trust stock purchase was illegal insider trading.
The SEC permanently barred Gericke from practicing before it and ordered him to pay a $20,000 fine. Despite his suspension from practicing law taking effect on April 19, he is currently employed at Dugan Brinkmann Maginnis & Pace, although he is not listed on the firm’s website.
The disciplinary board’s report noted that Gericke’s position at Cozen O’Connor made him “specially qualified” to recognize potential ethics violations and conflicts of interest. Still, unfortunately, he did not apply this knowledge to his actions. The case serves as a reminder that trading on insider information can lead to severe consequences, even for attorneys.
Get JD Journal in Your Mail
Subscribe to our FREE daily news alerts and get the latest updates on the most happening events in the legal, business, and celebrity world. You also get your daily dose of humor and entertainment!!
Gericke’s suspension highlights the importance of legal ethics and the need for attorneys to adhere to them. Insider trading violates the Securities Exchange Act of 1934, and attorneys are subject to even stricter ethical standards under the American Bar Association’s Model Rules of Professional Conduct. Violations of legal ethics can result in severe consequences, including suspension or disbarment from practicing law.
Attorneys must remain vigilant in recognizing potential conflicts of interest and ethics violations, both in their actions and in the actions of their clients. As demonstrated by Gericke’s case, failure to do so can lead to significant reputational and legal consequences.
