Judge to SEC: What’s happening in Chapman case?

May 14, 2008

Last week, U.S. District Judge William D. Quarles Jr. officially wondered about the progress of the Security and Exchange Commission’s case against former star investment banker and state pension fund manager Nathan A. Chapman Jr., his companies and three of his associates.

(The SEC’s civil case, which was announced the same day that Chapman was indicted in federal court on criminal charges in 2003, concerns the June 2000 initial public offering of Chapman’s eChapman.com Inc.)

“In reviewing the docket in the above entitled case, it appears that no activity has taken place since January 9, 2007,” Quarles, who presided over Chapman’s criminal trial in 2004, wrote in the two-sentence request for an update.

In their response yesterday, attorneys for the SEC reported they had reached terms with one Chapman associate, are nearing terms with another, and that talks are on hold with the third. Chapman’s current address, FCI Morgantown, a minimum security federal prison in West Virginia where he is serving a 63-month year sentence for fraud, makes his situation unique.

“Given Mr. Chapman’s incarceration, communication is somewhat difficult, however, the Commission believes we have made progress,” the attorneys wrote. “At this point, though, any predictions of outcome would be premature.”

While Chapman is proceeding pro se in this case, the law firms that represented him in his criminal case continue to feud with each other in Baltimore City Circuit Court over legal fees. According to court records, Jones & Associates P.C. filed a second amended complaint against Blank Rome LLP after Judge Albert Matricciani Jr. dismissed Jones’ fraud and misrepresentation claims.

BRENDAN KEARNEY, Legal Affairs Writer

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