New Law Firm Forms to Defend Banks in Court

Here's a sign of the times: fifteen lawyers have formed a new law firm dedicated to defending the financial industry called Murphy & McGonigle (we last heard this name in the W.C. Fields movie The Old Fashioned Way, in which the comedian played The Great McGonigle, head of a troupe of vaudevillians who never pay their bills). The new firm is open for business in New York, Washington, D.C. and Richmond, Va.The firm has an SEC Enforcement Group based in Washington, D.C., that includes six former SEC officials and has a Litigation Group that "has defended public companies in some of the highest stakes cases brought in recent years, involving market timing, auction rate securities, 'bank sweep' programs, securities fraud, Sarbanes-Oxley claims and mortgage securitization transactions," the firm's press release reads.

The broad measures of the finance reform bill in Congress are likely to set off a rash of litigation, especially if new rules wipe out certain types of capital and trigger bank failures. One lawyer pointed out to us recently that there are still lawsuits being pursued around such failures in the savings and loan crisis. "The FDIC and Justice Department fought every claim and lost every claim," he says. "From a lawyer's perspective, that's not a bad thing, but from a public policy perspective it's a terrible thing. People's lives get ruined and the government loses."