Sullivan & Cromwell’s Fees for Work on SEC Investigation Pruned

A former MSD Capital employee convicted of securities fraud doesn’t have to reimburse the company for the time its law firm, Sullivan & Cromwell, spent helping it with a Securities and Exchange Commission civil investigation into the allegations, the Second Circuit said.

When MSD Capital employee John Afriyie was accused of insider trading, MSD hired Sullivan & Cromwell to help it comply with the U.S. attorney’s criminal investigation and the SEC’s civil investigation. The firm was also tasked with helping MSD employees prepare to testify in Afriyie’s criminal trial and representing MSD during post-verdict restitution proceedings.

The Mandatory Victims Restitution ...