Consent Disbarment For Attorney Facing SEC Judgment

The District of Columbia Board on Professional Responsibility has approved and forwarded to the Court of Appeals a consent disbarment of an attorney

Law360 had this story on the attorney’s problems with the SEC

A D.C. Circuit panel expressed skepticism Thursday over attorney Brynee Baylor’s claim she was a victim of the perpetrators of a $2.7 million investment fraud scheme she had participated in, but pushed the U.S. Securities and Exchange Commission to explain why the penalties levied against Baylor weren’t excessive. 

Baylor had been tricked by her client, Frank L. Pavlico III, and his accomplice Valner Johnson when she was hired as outside counsel for Pavlico’s firm, The Milan Group, her counsel Gina Dennis argued to the three-judge panel.

She had carried out “all necessary due diligence” before agreeing to work with Pavlico on the scheme, which had appeared to her to be legitimate, and had relied on the advice of Johnson, another attorney and a “sophisticated third party,” regarding the nature of the scheme, Dennis said. Her only error had been to trust the pair, but the SEC had wrongly treated Baylor as a “villain,” according to Dennis.

“Frank and Val were the puppet masters here … surrounding her in a sandwich of deception,” Dennis said.

But Judge Merrick B. Garland seemed unmoved, questioning Dennis on whether Baylor’s conduct should be considered at the least reckless, which would be sufficient to uphold the ruling against her.

In emails to potential investors and in statements to undercover FBI agents who had posed as potential investors — purportedly based on her own observation of other investor transactions — Baylor had flagged a range of outsized benefits for participation in the scheme, with no risk, which a reasonable person could view as reckless, Judge Garland noted.

“That doesn’t sound like simply trusting someone else,” the judge said. “That sounds like she knew similar trades had occurred.”

Judge Nina Pillard also pushed Dennis to explain Baylor’s role in escrow transactions used to hold investors’ money, noting that she had dispersed money put into an escrow account almost immediately, despite the escrow agreements — which she had drawn up — requiring the money to be held for 60 days, with Judge Garland noting that about two-thirds of investor money had been funneled back to Baylor and Pavlico.

The judgment was the subject of this Law360 story. (Mike Frisch)