NEW YORK (Reuters) - Standard and Poor's has hired John Keker, one of the country's top white-collar defense attorneys, to help fight a $5 billion lawsuit brought by the U.S. government this week.
Keker, who is based in San Francisco and has represented everyone from cyclist Lance Armstrong to Enron's Andrew Fastow, was hired at the recommendation of Floyd Abrams, a prominent New York attorney who also represents the ratings firm.
"John Keker is one of the great trial lawyers in this country," Abrams said.
Keker did not return calls seeking comment. A spokeswoman for his firm, Keker & Van Nest, confirmed that Keker and another partner, Elliot Peters, were on the case.
The U.S. government sued Standard & Poor's in federal court in Los Angeles on Monday, accusing the McGraw Hill Cos Inc
Standard & Poor's has said the lawsuit is "without legal merit and unjustified" and that it will "vigorously defend" itself against the erroneous claims.
Abrams, a noted First Amendment lawyer who has defended S&P in dozens of lawsuits over its ratings, said this week that freedom of speech may not be a defense in this case.
In an interview with Reuters on Wednesday, Abrams said bringing Keker onto the team was an indication that "we are going to be more than ready, if necessary, to have a trial."
Keker, known as a combative defense attorney, won credit from legal experts in 2006 when Fastow, considered the mastermind of Enron's fraud, was sentenced to only six years in prison.
Keker also helped Armstrong fend off a U.S. Justice Department investigation into doping last year. Armstrong admitted doping earlier this year, raising questions over whether the investigation could be reopened.
Keker also represented ex-Citigroup banker Brian Stoker in a case brought by the U.S. Securities and Exchange Commission over his role in a mortgage bond deal that collapsed. Stoker was cleared of wrongdoing.
A former Marine, Keker prosecuted Lt. Col. Oliver North during the Iran-Contra scandal.
Abrams, a partner at Cahill Gordon & Reindel, said he would meet with Keker in New York on Thursday.
Abrams said the government will find it difficult to portray the banks in the deals as victims of bad ratings.
In 11 of the deals highlighted by the government, the financial institution that bought the debt was the same institution that arranged the securities, Abrams said.
"They are the entities that had their hands on precisely what went into these CDOs because they were the ones that made the choices," he said. "The notion that rating agencies are somehow to be held liable for their losses is an unlikely one."
Abrams also discounted the lawsuit's reference to a video of an S&P analyst singing a parody of the 1983 Talking Heads song "Burning Down the House."
"The government's got a heavy burden here and I don't think they can come close to meeting it," Abrams said. "And they certainly can't meet it by that sort of anecdotal, wise-cracking evidence."
Abrams said the defense will look at whether 1989 the statute cited in the lawsuit, the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA), applies to the government's claims.
He said the government was effectively using the statute as a substitute for securities law, but with an expanded statute of limitations.
"Certainly it wasn't passed with the intention to allow lawsuits like this," Abrams said.
The case is United States of America v. McGraw-Hill Companies Inc, U.S. District Court, Central District of California, No. 130-00779.
(Reporting by Karen Freifeld; Editing by Eddie Evans and Tim Dobbyn)
Source: http://news.yahoo.com/exclusive-p-hires-top-defence-attorney-5-billion-010405627--finance.html
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