File 030098
Email forwarding LA Times article about InfoSpan v. Emirates NBD fraud verdict with Kathy Ruemmler commentary (File 030098)
Email from Kathy Ruemmler forwarding LA Times article about federal jury verdict in InfoSpan v. Emirates NBD fraud case, with discussion of Ruemmler's legal arguments as counsel for the bank.
Summary
Email dated August 12, 2016 from Kathy Ruemmler to Jeffrey E. forwarding a Los Angeles Times article published August 11, 2016 reporting on a federal jury verdict in a fraud case between Orange County tech company InfoSpan and Dubai-based Emirates NBD bank. The jury unanimously decided that InfoSpan failed to prove its $540 million fraud and trade secrets theft allegations against the bank. The case involved a disputed mobile payment system called SpanCash; InfoSpan claimed Emirates stole its technology while Emirates argued InfoSpan misrepresented itself and couldn't produce a working product. Kathy Ruemmler, serving as former White House counsel and attorney for Emirates NBD, argued in closing that InfoSpan sold the bank a "bill of goods" and that the bank's actions were justified responses to being misled.
From: Kathy RuemmlerSent: 8/12/2016 2:54:25 AMTo: jeffrey E. [jeeyacation@gmail.com]Subject: Fwd: Press: LA Times - Federal jury decides Middle East bank did not defraud Orange County entrepreneurAttachments: image002.jpgImportance: HighBegin forwarded message:From: _____________________________Date: August 11, 2016 at 7:52:12 PM PDTTo: <Subject: FW: Press: LA Times - Federal jury decides Middle East bank did not defraud Orange CountyentrepreneurFrom: Pizzurro, Frank (LA) <Date: Thursday, Aug 11, 2016, 7:41 PMTo: Dunlavey, Dean (OC) < >,Schecter, Daniel (CC) < , Mohebbi,Nima (LA) <<ICc: #L&W BD PR (US) </W mailto:#>>, Wine, Jamie(NY) <__________________________________________________>>, Bruno, Nicole (NY)>>, Harris, Nicole (CH)<>>, Greenberg, Jeffrey (LA-NY)>, Bauer, Steve (SF-BR)>>, Moore, Wendy (OC)<>>, Jennings, Alex (LA)>>, Robins, Greg (LA)Subject: Press: LA Times - Federal jury decides Middle East bank did not defraud Orange County entrepreneurThe LA Times appears to be the first media to report on the verdict. Latham references are highlighted:BUSINESSFederal jury decides Middle East bank did not defraud Orange County entrepreneur<http://fw.to/aXv1QHI>•>>, Ruemmler, Kathy (DC)[Farooq Bajwa]Farooq BajwaBy Andrew KhouriAugust 11, 2016HOUSE OVERSIGHT 030098A federal jury decided Thursday that one of the Middle East's most prominent banks did not commit fraud andsteal technology from an Irvine firm that sued it for half a billion dollars in damages after their partnershipcollapsed.Orange County company InfoSpan had alleged that Emirates NBD ended a partnership for a mobile paymentsystem because it didn't want to share revenue and stole InfoSpan's technology to launch its own service.The Dubai-based bank, in turn, denied it stole or ever used InfoSpan's technology. It argued that it cancelled thepartnership because InfoSpan couldn't produce a working product and misled it into thinking it was anestablished company, not one with little to no track record.After deliberating for a day, the jury unanimously decided that InfoSpan did not prove its case of fraud and theftof trade secrets.InfoSpan had asked for $540 million in damages. An attorney for InfoSpan declined to comment on thepossibility of an appeal.The verdict capped a two-week trial that involved dueling accusations of fraud levied by high-profile attorneyson both sides, including the former White House counsel to President Obama.At the center of the high-stakes battle was San Juan Capistrano resident and entrepreneur Farooq Bajwa and amobile payment system that he said would allow migrant workers in the Middle East to send remittances backhome through text messages.Bajwa contended that InfoSpan, with support from outside investors, spent $87 million developing the businessand technology.To launch the system, known as SpanCash, Bajwa partnered in 2007 with Emirates Bank, which is controlledby the United Arab Emirates' sovereign wealth fund.It seemed the ideal collaboration for the Pakistani immigrant, who earned millions operating another Irvinecompany that manufactured computer components in the 1980s and 1990sThe Gulf States rely heavily on migrants to work construction and other low-wage jobs, offering a ready-mademarket for SpanCash. InfoSpan aimed to allow migrants to transfer money back home far more cheaply thanWestern Union or hawala, a traditional Middle Eastern broker-to-broker money transfer system.A study from McKinsey & Co., cited in court records, projected annual revenue of $3.5 billion by the deal'sfifth year, with InfoSpan receiving more than $2.8 billion in fees.But the relationship between InfoSpan and Emirates Bank soured and the bank cancelled the deal in 2009.A few days later, Emirates filed a criminal complaint in Dubai against Bajwa and a partner alleging that theydefrauded the bank and misrepresented InfoSpan as an established business with a working technology.Two years later, InfoSpan sued in U.S. District Court in Santa Ana and alleged that its technology was workingand that it delivered its source code to the bank on servers. Emirates ended the deal, InfoSpan said, to launch itsown mobile payment system after stealing InfoSpan's technology.In court, an attorney for InfoSpan argued that Emirates torpedoed the InfoSpan relationship because it abhorredhow much money it would have to share with the Irvine firm."They wanted SpanCash and they wanted the money," attorney William A. Isaacson said in his closingarguments Wednesday.Isaacson — a partner with powerhouse law firm Boies Schiller & Flexner, chaired by high-profile litigator DavidBoies — argued that the bank resorted to "pure extortion" in an attempt to get its way.As a result of the bank's criminal complaint, InfoSpan alleged Bajwa's partner, Larry Scudder, was detained atthe Dubai International Airport and taken to a cell where he was locked in with 30 other men for 19 hours untilhe secured his release by turning over his passport.According to the lawsuit, Bajwa tried to resolve the situation but was told Scudder's passport would be releasedand he could leave the country only if InfoSpan gave up ownership and control of SpanCash to the bank.Six months later, the bank withdrew the fraud accusations and Scudder got his passport back, but SpanCash'sreputation was tarnished and it collapsed, Bajwa previously told The Times.The bank disputed that it acquired InfoSpan's source code or used it at any time.Former White House counsel and an attorney for the bank, Kathryn Ruemmler, said that Emirates never wouldhave acquired source code in a joint-partnership deal like the one reached with InfoSpan. She said suchtechnology would instead be held by a third-party escrow company for the length of the partnership.In her closing arguments, the partner with global firm Latham & Watkins told the jury that Bajwa and InfoSpanHOUSE OVERSIGHT 030099sold the bank a "bill of goods," arguing that despite promises to Emirates, the technology never worked andInfoSpan wasn't as big a company as it claimed.The bank cancelled the deal and filed a criminal complaint, not as a form of extortion but simply to regain thebank's money after it was misled and doubts grew about the character of InfoSpan's employees, Ruemmler toldthe jury."They concluded, definitively, that they had been defrauded," she said.Lubna Qassim, group general counsel for Emirates Bank, said in a statement after the verdict that "EmiratesBank is gratified by today's decision and the opportunity to receive a fair trial in U.S. courts."Bajwa said the trial has taken a toll on him and he doesn't know his next steps."I am just beat up," he said.Phil Hirschkorn contributed to this report.Copyright 0 2016, Los Angeles Times<http://www.latimes.com/>Frank PizzurroPublic Relations Senior ManagerLATHAM & WATKINS LLP355 South Grand Avenue 1Los Angeles, CA 90071-1560This email may contain material that is confidential, privileged and/or attorney work product for the sole use ofthe intended recipient. Any review, reliance or distribution by others or forwarding without express permissionis strictly prohibited. If you are not the intended recipient, please contact the sender and delete all copies.Latham & Watkins LLPHOUSE OVERSIGHT 030100