Maryland Court of Appeals disbars lawyer for misrepresentations

Daily Record, The (Baltimore), Apr 16, 2008 by Christina Doran

An attorney who made false statements about his bar admission status, practiced law when he was not authorized to do so and acted to mislead and defraud investors was disbarred Tuesday.

According to the Court of Appeals, David Wayne Parsons was president and general counsel of a company that once managed assets of $20 million, but falsely represented to the public that the total was five times that amount.

"In addition to being dishonest -- perjurous and fraudulent -- [Parsons'] conduct is unmitigated," Chief Judge Robert M. Bell wrote for the top court.

WHAT THE COURT HELD

Case: Attorney Grievance Commission v. David Wayne Parsons, AG 58, Sept. Term 2006. Reported. Opinion by Bell, C. J. Filed April 15, 2008.

Issue: What is the appropriate sanction for an attorney who made false statements about his bar status, participated in the unauthorized practice of law and acted to mislead and defraud investors?

Holding: The attorney's conduct warrants disbarment; anything less would undermine the public's confidence in the legal profession.

Counsel: Fletcher P. Thompson for petitioner; no appearance for respondent.

According to Tuesday's opinion, Parsons was admitted to the Maryland bar in November 1979, but was prohibited to practice in April 1997 after receiving a decertification letter. Additionally, Parsons was admitted to practice in the District of Columbia in November 1980, but was suspended in December 1991. He was not admitted to practice in any other jurisdiction.

A hearing judge in Anne Arundel County Circuit Court found that Parsons violated the Maryland Rules of Professional Conduct by filing a false affidavit in federal court in Illinois in 1999. Parsons was granted an Application for Leave to Appear Pro Hac Vice after representing "under the penalty of perjury" that he was a member in good standing in Maryland, D.C. and the U.S. District Court in Maryland.

The hearing judge had some evidence, from an unrelated matter, that Parsons claimed he was unaware of the 1997 decertification until early 2004; however, she did not believe him.

"[Parson's] false statement on the application prevented the United States District Court Judge from ruling appropriately because he was misled by [Parsons]," the hearing judge wrote. "[Parson's] actions were, therefore, prejudicial to the administration of justice."

The hearing judge also found that Parsons practiced law in a jurisdiction in which he was not authorized. Parsons acted as general counsel for Dupont Direct Financial Holdings Inc. in New York in 2001, and represented various other companies and individuals in arbitration and court proceedings in New York and other states between 1999 and 2001.

"[Parsons] was clearly practicing law in New York and elsewhere without being licensed to do so," the court wrote. "Because he did not have a current license in any jurisdiction, he cannot claim reliance ... on licensure in any jurisdiction outside of the State of New York."

Additionally, the lower court found that Parsons approved the issuance of a March 14, 2002, press release for Dupont Direct, of which he was also president, which falsely stated that the company was managing more than $100 million in assets. The National Association of Securities Dealers Inc. filed a complaint against the company and Parsons, and the hearing officer found that at least $80 million of those funds were not, in fact, under the company's management.

"In this case, the evidence shows that [Parsons], as president and general counsel of DuPont Direct, approved the issuance of a press release which was designed to deceive potential investors in his company by making the company appear more successful that it actually was," the hearing judge found.

According to its last filing on the Security and Exchange Commission's Web site, the company ceased doing business in April 2004.

Parsons, who did not present an argument to the Court of Appeals, could not be reached for comment Tuesday. Assistant Bar Counsel Fletcher P. Thompson did not return a call for comment.

Parsons did not respond to the petition, and took no exceptions to the findings. The commission ultimately recommended disbarment.

The Court of Appeals agreed with the suggested sanction.

"[T]olerating such conduct by imposing other than a significant sanction would not protect the integrity of the legal profession and, rather than further the public's confidence in the legal profession, would undermine its confidence," Bell wrote.