Asset Management

A rather lenient suspension order from the Kentucky Supreme Court in light of the misconduct.

Mabab Trade, LLC, entrusted Movant with $775,000.00 to be used in connection with a proposed investment transaction between Mabab, Jason Castenir, and four other investors. Movant initially and appropriately placed the funds into his office escrow account.

About seven weeks later, Mabab requested the return of the funds in their entirety. An attempt to wire the escrow funds back to Mabab was unsuccessful due to a lack of funds in Movant’s escrow account. At the time of the refund request, the escrow account contained a balance of approximately $373,131.13. Following this unsuccessful transfer attempt, Movant wired Mabab $300,000.00 about two weeks later, and an additional $47,000.00 about two weeks after that.

The remaining $427,500.00 was eventually returned to Mabab; not from Movant’s escrow account, however, but rather from Maverick Asset Management, who had originally received the funds from the escrow account via a transfer initiated by Jason Castenir, one of the original investors. Movant had given Castenir, who is not an attorney, access to the escrow account with instructions to obtain prior approval from Movant before making any transfers from the account. Castenir did not, however, get Movant’s approval before initiating the transfer of funds to Maverick Asset Management.

In connection with his failure to immediately return the funds to Mabab upon request, Movant falsely told the Manager of Mabab that the funds were secure even though a portion of the funds had already been transferred to Maverick Asset Management; falsely told him that the escrow account could not be accessed temporarily due to an audit when, in fact, there was no audit; and falsely told him that the funds were “tied up” due to a pending lawsuit in Texas when, in fact, there actually was no such lawsuit.

Mabab filed a lawsuit against Movant and others in connection with the mishandling of its funds, and the case was eventually settled, with Movant’s portion of the settlement being $95,000.00, which he has paid. In summary, Mabab has been made whole, and Movant has fully complied with his obligations under the settlement.

Sanction

Movant, Joseph Daniel Thompson, is suspended from the practice of law in the Commonwealth of Kentucky for 181 days, with 120 of those days suspended under the condition that he commit no further ethical violations during the suspension period.

There are places (D.C. is one) where these facts would get far more severe discipline. 

As the Everly Brothers might sing, “A man in Kentucky sure is lucky…”

If I can be permitted a moment of personal privilege, here is a link to a performance of Bowling Green by the Everlys as I remember them at the Celler Door in Georgetown (the location, not the Law School) in about 1973.

My buddies and I went to see the warm up act – a comic named George Carlin – who we met outside the club and chatted with for awhile. A great memory. I asked George to sign a copy of his album and asked that he write something clever.

He wrote: “I can’t think of anything clever, How’s f*** you?”  

The Everly Brothers opened with this song.

Miss you George. Miss you Phil Everly. Rock on Don.

Thanks for the memories. (Mike Frisch)