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10th May 2022

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US judge faults ex-SEC enforcement chief for conduct in Exxon case

Alex Oh, who quit a top role at the US Securities and Exchange Commission last month after only six days in the job, has acknowledged contributing to a “breakdown of civility” during a hearing in which she represented oil company ExxonMobil.

The former Paul Weiss partner was appointed head of enforcement at the SEC in April but stepped down shortly afterwards, citing a development in a case she had worked on at the Wall Street firm.

In a ruling unsealed late on Friday, senior judge Royce Lamberth of the District of Columbia found that Oh was partly responsible for the “misconduct” of an Exxon executive who failed to properly answer more than 100 questions while testifying in a lawsuit over alleged atrocities by military personnel paid to secure the company’s former facility in Indonesia.

“I acknowledge and regret my role in the breakdown of civility that occurred during and after this unfortunate deposition,” Oh wrote in an explanation demanded by the judge. The lawyer added that she had sought to defend Exxon through “zealous advocacy” and that, at the time, she “believed in good faith that my approach to the deposition was appropriate”.

Oh’s resignation dealt an early blow to efforts by incoming SEC chief Gary Gensler to overhaul the top ranks of an agency that was criticised for pursuing few high-profile investigations during the Trump administration. The US regulator is expected to take a far tougher approach to enforcement on Wall Street under Joe Biden’s presidency.

The case also highlighted the tension between the aggressive tactics that Paul Weiss employs for its clients and its public image as an advocate for social justice. “I would hate to think that speaking out on fundamental issues like voter protection, gun control, same-sex marriage, immigrant rights, criminal justice reform and reproductive freedom makes us a ripe target for some,” the firm’s chair Brad Karp told an industry publication last week.

Paul Weiss is defending Exxon against a lawsuit filed in 2001 by Indonesian villagers, who claim that military personnel paid by the oil major detained, tortured, sexually assaulted and killed their family members in order to secure its natural gas plant in the Aceh region.

Exxon said the claims “are without merit”, adding that it “condemns human rights violations in any form” and “has worked for generations to improve the quality of life in Aceh”.

Mark Snell, Exxon’s general counsel for the Asia Pacific region, gave evidence in the case in February. His deposition hearing took place via Zoom, with Washington-based lawyers dialling in on Sunday evening and working through the night to question the witness during daylight hours in Singapore.

Snell “refused to answer most of the substantive questions posed to him” and instead “repeatedly read nonresponsive statements verbatim from pre-prepared notes,” according to Lamberth’s ruling. Confronted at one point with a yes-or-no question, Snell gave a 398-word response.

The court found that Snell “provided evasive answers to the question of who prepared [the] notes [from which he was reading]”. At one point, he declared: “The documents were word processed by counsel”.

The evidence suggested that Oh and Snell had jointly planned the evasive deposition strategy, Lamberth found, writing: “Ms Oh is therefore responsible alongside Mr Snell for his misconduct.”

The judge also sided with a lawyer for the Indonesian villagers who had faced a barrage of accusations concerning his behaviour during the hearing. Lawyers for Exxon had complained that the plaintiff’s lawyer, Kit Pierson, had engaged in “browbeating and disrespectful behaviour”, “demonstrated a general lack of respect towards a professional adversary”, and become “unhinged”.

But Lamberth said he could find no evidence for those claims, which he added may have broken court rules. He ordered Oh and Paul Weiss to explain why they should not be subjected to punishment.

Paul Weiss said in a court filing that its defence counsel had “characterised plaintiffs’ counsel’s conduct using sharp and pointed language” that it since regrets, but claimed the “first-hand experience of [the lawyers’ exchanges] . . . was not entirely captured by the video the Court reviewed”.

Oh said in a separate filing that she “genuinely believed when I made those assertions that my descriptions were supported by my own recollection, the transcript, and the video of the deposition”, adding that she would choose her words more carefully in future.

She also provided the answer to at least one question that the judge said Snell had evaded: “as for how the notes were prepared,” she wrote, “the first draft was prepared by an associate at Paul Weiss.”

2021-05-10 10:00:13


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