Law firm Jones Day and corporate intelligence group Kroll face charges of unlawful conspiracy and a “harassment campaign” to protect Wirecard, the now-collapsed German financial technology group, in a lawsuit filed in the UK High Court.
A statement by short seller Matt Earl asserts that Jones Day and Kroll used the hacked and stolen communications as a pretext for “blatant surveillance” and “expensive legal threats” designed to harass, distress “and ultimately to prevent them from reporting criminal activity Wirecard”.
Earl is a famous British short seller at ShadowFall investment company. The case concerns events in 2016 and 2017, when he was the main author of a series of anonymous reports published under the names “Zatarra” and “VisMas Files”, which accused Wirecard of fraud, money laundering and regulatory violations.
The lawsuit comes as campaigners and lawyers seek reforms to combat what they call strategic lawsuits against public participation (Slapp) tactics that exploit the threat of lengthy and expensive legal proceedings to silence and intimidate journalists, critics and watchdogs over the cost of defending cases. mentioned. .
Kroll said it “completely denies Mr Earl’s claims”, and “acted in accordance with all applicable laws and regulations”. It said it will fight legal action and “does not – and certainly will not – engage in any hacking, intimidation or other illegal actions”.
Jones Day did not respond to a request for comment.
Wirecard used a number of professional services firms in London to defend its reputation and investigate perceived adversaries before the company collapsed in June 2020, when the accounts were revealed to be fraudulent.
After the collapse, internal Wirecard documents became available that shed light on how the company responded to critics, details that are usually shrouded in legal privilege and client confidentiality.
Matt Earl, right, at a London Underground station in 2016 © Kroll
In August 2016 Kroll tracked down Earl and took secret photos of him in a London Underground station. In October 2016 Jones Day described potential legal action against Earl in a memo to Wirecard.
Earl’s suit said public anonymity “is a problem for the aggressive litigation strategy” designed by Jones Day, which only identified Earl from “extensive checks and violations of the law” conducted by Kroll.
Earl’s identity was exposed on December 6 2016 in an anonymous dossier published online under the title “Zatarra RIP”. It includes “verbatim extracts from Skype conversations,” other communications obtained illegally, and a photograph that includes one of Earl opening the front door to his home, according to the statement.
The RIP report accused Earl, without evidence, of being a member of “an insider trading and market manipulation organization”.
Kroll said Wirecard used other investigative companies and that “naturally, as Kroll did not see that engagement by Wirecard, it is not possible to comment on the propriety, or otherwise, that action”.
Aviram Azari, an Israeli private detective, pleaded guilty in the US last year to his involvement in a hacker-for-hire scheme used to target journalists and critics of Wirecard. There is no suggestion Kroll or Jones Day knew of their actions.
Earl’s statement alleges that Kroll and Jones Day used the RIP publication to justify “obvious surveillance” of his family’s home “calculated to cause distress”, and made meaningless legal threats “gratuitously and inappropriately designed to intimidate”.
Alleging a conspiracy, Earl’s statement said there was a “self-evident” synergy between the legal strategy developed on behalf of Wirecard by Jones Day, the “harassment campaign” by Kroll, and the publication of reports that identify people.
The statement said Jones Day’s and Kroll’s actions “strengthen the conclusion” that the Zatarra RIP report was written by Wirecard or individuals it instructed, and that Kroll and Jones Day knew or suspected the client was involved.
An anonymous dossier was published online in 2016 under the title ‘Ztarra RIP’
Earl also claims that in the legal correspondence Jones Day misrepresented the knowledge of the person before the publication of the report RIP Zatarra, in violation of the principles of UK regulations that require lawyers to act with integrity. The statement said it would “rely on misrepresentation as evidence of awareness, on the part of the accused, of wrongdoing”.
The claim also alleges other misrepresentations and breaches of regulatory principles by Jones Day, and that it has incurred significant costs in response to “rude, unreasonable and oppressive correspondence”.
The Solicitors Regulation Authority last year warned UK firms about appropriate action in disputes and issued a warning about Slapps.
Earl also claims misuse of personal data, and in addition to aggravated damages seeks full disclosure of all personal information held by Kroll and Jones Day.
Kroll said he would take steps to have all of Earl’s claims “dismissed at the earliest opportunity”.