Case Title: Disciplinary Counsel v. Lapine

Citation: 2010-Ohio-6151

Docket Number: 20101291

State: ohio

Court: Ohio Supreme Court

Date: 2010-12-21T00:00:00Z

Document:
[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as 
Disciplinary Counsel v. Lapine, Slip Opinion No. 2010-Ohio-6151.] 
 
 
NOTICE 
This slip opinion is subject to formal revision before it is published in 
an advance sheet of the Ohio Official Reports.  Readers are requested 
to promptly notify the Reporter of Decisions, Supreme Court of Ohio, 
65 South Front Street, Columbus, Ohio 43215, of any typographical or 
other formal errors in the opinion, in order that corrections may be 
made before the opinion is published. 
 
SLIP OPINION NO. 2010-OHIO-6151 
DISCIPLINARY COUNSEL v. LAPINE. 
[Until this opinion appears in the Ohio Official Reports advance sheets, it 
may be cited as Disciplinary Counsel v. Lapine,  
Slip Opinion No. 2010-Ohio-6151.] 
Attorneys — Misconduct — Reciprocal discipline — Suspension order from U.S. 
Securities and Exchange Commission that prohibits respondent from 
practicing before it but that reflects no finding or admission of 
wrongdoing is not a “disciplinary order in another jurisdiction” within 
the meaning of Gov.Bar R. V(11)(F)(1) — Reciprocal discipline not 
appropriate — Cause dismissed. 
(No. 2010-1291 — Submitted November 16, 2010 — Decided 
December 21, 2010.) 
ON CERTIFIED ORDER OF the United States Securities and Exchange  
Commission, No. 3-13926. 
__________________ 
 
 
SUPREME COURT OF OHIO 
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O’DONNELL, J. 
{¶ 1} This case concerns whether a suspension order entered by the 
United States Securities and Exchange Commission  (“SEC”), in which an 
attorney licensed in Ohio has voluntarily agreed not to practice before the SEC for 
five years and which reflects neither an admission of wrongdoing by the attorney 
nor an affirmative finding of professional misconduct by the SEC, is a 
disciplinary order by another jurisdiction that requires this court to impose 
reciprocal discipline pursuant to Gov.Bar R. V(11)(F).  Upon review, we 
conclude that the appropriate disposition is to dismiss this matter without 
imposing reciprocal discipline. 
{¶ 2} Respondent, Jay Marc Lapine, Attorney Registration No. 0005051, 
with a registration address in Duluth, Georgia, was admitted to the practice of law 
in Ohio in 1979.  On July 22, 2010, in accordance with Gov.Bar  R. V(11)(F)(1), 
relator, Disciplinary Counsel, filed a certified copy of an order of the SEC 
suspending respondent from appearing or practicing before it as an attorney for a 
period of five years. 
{¶ 3} According to this suspension order, the SEC filed a complaint 
against respondent in the United States District Court for the Northern District of 
California in SEC v. Lapine, No. C-01-3650, alleging that respondent had 
participated in a fraudulent scheme to inflate the revenue of a publicly traded 
company in violation of generally accepted accounting principles by using 
concealed side letters and back-dated contracts.  In particular, the complaint 
alleged that respondent had falsified documents and circumvented internal 
accounting controls and that he had aided and abetted his employers in the same 
violations as well as in their failure to maintain accurate books and records and 
their filing of materially false reports with the SEC. 
{¶ 4} The district court entered a final judgment by consent against 
respondent (1) permanently enjoining him from violating or aiding and abetting 
January Term, 2010 
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the violation of various sections of the Securities Exchange Act of 1934 and SEC 
rules, (2) ordering him to pay a civil penalty of $60,000, and (3) prohibiting him 
from acting as an officer or director of any entity issuing certain types of 
securities or having a duty to file certain reports with the SEC for five years.  The 
court did not, however, obtain respondent’s admission to wrongdoing or make 
any findings of misconduct. 
{¶ 5} Part 201, Title 17, C.F.R. contains the Rules of Practice of the 
SEC.  Section 201.102(e)(3)(i) provides: 
{¶ 6} “The Commission, with due regard to the public interest and 
without preliminary hearing, may, by order, temporarily suspend from appearing 
or practicing before it any attorney, accountant, engineer, or other professional or 
expert who has been by name: 
{¶ 7} “Permanently enjoined by any court of competent jurisdiction, by 
reason of his or her misconduct in an action brought by the Commission, from 
violating or aiding and abetting the violation of any provision of the Federal 
securities laws or of the rules and regulations thereunder.” 
{¶ 8} In its order of suspension, the SEC noted that respondent, in 
anticipation of additional proceedings against him pursuant to Section 
201.102(e)(3)(i)(A), submitted an offer of settlement to the SEC.  The SEC 
accepted the offer and entered an order suspending respondent from appearing or 
practicing before it as an attorney for a period of five years.  However, while 
respondent consented to the entry of the SEC order, he did not admit that he had 
engaged in misconduct, nor did the SEC make any affirmative findings of 
misconduct. 
{¶ 9} Gov.Bar R. V(11)(F)(4) provides that the court shall impose 
reciprocal discipline following the issuance of a disciplinary order in another 
jurisdiction unless the attorney proves by clear and convincing evidence either (1) 
that there was a lack of jurisdiction or fraud in the other jurisdiction’s disciplinary 
SUPREME COURT OF OHIO 
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process or (2) that the misconduct established warrants a substantially different 
discipline in Ohio.  Gov.Bar R. V(11)(F)(4)(i) and (ii).  “In all other respects, a 
final adjudication in another jurisdiction that an attorney has been subjected to 
discipline shall establish conclusively the misconduct for purposes of a 
disciplinary proceeding in Ohio.”  Gov.Bar R. V(11)(F)(5). 
{¶ 10} Upon relator’s filing of the SEC suspension order, we ordered 
respondent to show cause why we should not impose identical or comparable 
discipline in Ohio.  See Gov.Bar R. V(11)(F)(2)(b).  After respondent filed a 
response to the show-cause order and relator filed a reply, we directed the parties 
to file briefs addressing three issues: (1) whether the Supreme Court Rules for the 
Government of the Bar of Ohio require that “another jurisdiction” imposing 
discipline upon an attorney make affirmative findings of misconduct, comparable 
to those required by Gov.Bar R. V(6)(J) and V(11)(A)(3)(c), before reciprocal 
discipline may be imposed pursuant to Gov.Bar R. V(11)(F), (2) whether the SEC 
is a “jurisdiction” within the meaning of Gov.Bar R. V(11)(F) for purposes of 
imposing reciprocal discipline, and (3) whether the respondent has been 
disciplined by the SEC as a reciprocal authority such that this court should impose 
reciprocal discipline pursuant to Gov.Bar R. V(11)(F).  See Disciplinary Counsel 
v. Lapine, 126 Ohio St.3d 1588, 2010-Ohio-4639, 934 N.E.2d 358. 
{¶ 11} The parties dispute whether the SEC is a “jurisdiction” for 
purposes of Gov.Bar R. V(11)(F), and we have not before specifically addressed 
this question with respect to the SEC.  However, we have previously recognized 
that a federal agency may be considered to be a jurisdiction for purposes of this 
rule. 
{¶ 12} In Disciplinary Counsel v. Rayve, 121 Ohio St.3d 1212, 2009-
Ohio-844, 901 N.E.2d 1292, Disciplinary Counsel v. Knuth, 119 Ohio St.3d 1201, 
2008-Ohio-3810, 891 N.E.2d 343, and Disciplinary Counsel v. Colitz, 99 Ohio 
St.3d 1216, 2003-Ohio-3308, 790 N.E.2d 788, we imposed reciprocal discipline 
January Term, 2010 
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on attorneys suspended from practicing before the United States Patent and 
Trademark Office (“USPTO”). 
{¶ 13} While we did not provide our reasoning for recognizing that the 
USPTO is a jurisdiction for purposes of Gov.Bar R. V(11)(F), it is notable that 
only those practitioners who are registered with the USPTO Office of Enrollment 
and Discipline or who are given limited recognition pursuant to agency 
regulations may represent others before the USPTO.  Section 11.10(a), Title 37, 
C.F.R.  Applicants for admission to practice before the USPTO are required to 
pass a registration exam administered by the Office of Enrollment and Discipline, 
except in limited circumstances when a waiver applies.  Section 11.7(b)(1)(ii), 
Title 37, C.F.R.  Further, Section 11.19(a), Title 37, C.F.R. provides that all 
practitioners are subject to the disciplinary jurisdiction of the USPTO, and Section 
11.19(b)(1)(iv) states that practitioners may be disciplined for violations of the 
Mandatory Disciplinary Rules of the USPTO identified in Section 10.20, Title 37, 
C.F.R.  The Office of Enrollment and Discipline has authority to investigate 
misconduct, Section 11.22(a), and may initiate disciplinary proceedings against a 
practitioner, Section 11.32, in which any violation of the disciplinary rules must 
be proven by clear and convincing evidence.  Section 11.49. 
{¶ 14} By comparison, the SEC regulations do not limit appearance and 
practice before the SEC in a representational capacity to registered practitioners.  
Not only do the rules of practice allow a person to be represented by any attorney 
admitted to practice before the Supreme Court of the United States or the highest 
court of a state, but they also allow a partner to represent a partnership, an officer 
to represent a corporation, trust, or association, and an officer or employee to 
represent a state commission, department, or political subdivision.  Section 
201.102(b), Title 17, C.F.R. 
{¶ 15} Thus, rather than imposing admission requirements, the SEC 
affords the privilege of appearing in a representative capacity to broad categories 
SUPREME COURT OF OHIO 
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of individuals, with that privilege subject to subsequent suspension on the SEC’s 
finding of a lack of qualification to represent others, a lack of character or 
integrity, unprofessional conduct, or a violation of federal securities law.  Section 
201.102(e)(1)(ii) through (iii).  Notably, the SEC Rules of Practice do not set 
forth or incorporate by reference any rules of professional conduct or provide for 
disciplinary hearings in which misconduct must be proven by clear and 
convincing evidence. 
{¶ 16} Moreover, the definition of “practice” provided in the SEC Rules 
of Practice encompasses more than the practice of law and includes:   
{¶ 17} “(1) Transacting any business with the [SEC]; and  
{¶ 18} “(2) The preparation of any statement, opinion or other paper by 
any attorney, accountant, engineer or other professional or expert, filed with the 
[SEC] in any registration statement, notification, application, report or other 
document with the consent of such attorney, accountant, engineer or other 
professional or expert.” (Emphasis added.)  Section 201.102(f), Title 17, C.F.R. 
{¶ 19} Notably, the Supreme Court of Florida, the only court to consider 
whether the SEC is a jurisdiction for purposes of imposing reciprocal discipline, 
held that an SEC suspension order is not a final adjudication in a disciplinary 
proceeding by a court or other authorized disciplinary agency of another 
jurisdiction within the meaning of Florida’s reciprocal-discipline provisions.  
Florida Bar v. Tepps (Fla.1992), 601 So.2d 1174.  While the court noted that the 
SEC has authority to temporarily or permanently deny any person the privilege of 
appearing or practicing before it, the primary purpose of this authority “is not to 
ensure the qualification, supervision or regulation of lawyers.”  Id. at 1175.  Cf. 
Stanley v. Ligon (2008), 374 Ark. 6, 11, 285 S.W.3d 649, fn. 4 (“While the 
[Social Security Administration] and [the Department of Veteran’s Affairs] are 
administrative agencies with authority to regulate who represents claimants before 
them, they are not regulating the practice of law when so doing.  * * *  Thus, 
January Term, 2010 
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when the SSA suspended Stanley from representing claimants for five years, that 
did not amount to a suspension from the practice of law [for purposes of 
reciprocal discipline]”). 
{¶ 20} Because the SEC does not admit or supervise attorneys or 
specifically regulate the practice of law, it should not be considered a jurisdiction 
for purposes of imposing reciprocal discipline on an attorney admitted to practice 
in Ohio. 
{¶ 21} Even if we were to consider the SEC to be a jurisdiction for 
purposes of reciprocal discipline, this matter should nonetheless be dismissed 
because as relator concedes, the SEC suspension order is not the result of a 
disciplinary proceeding and is therefore not a “disciplinary order” within the 
meaning of Gov.Bar R. V(11)(F)(1). 
{¶ 22} The Supreme Court Rules for the Government of the Bar generally 
contemplate that an attorney will either admit to a disciplinary violation or be 
found by clear and convincing evidence to be guilty of professional misconduct 
before discipline will be imposed.  See Gov.Bar R. V(11)(A)(3)(c) and V(6)(J).  
This policy accords with the principle that an attorney’s license to practice law 
may not be arbitrarily revoked and that an attorney is entitled to procedural due 
process in a disciplinary proceeding.  See, e.g., In re Ruffalo (1968), 390 U.S. 
544, 550-551, 88 S.Ct. 1222, 20 L.Ed.2d 117; Konigsberg v. State Bar of 
California (1957), 353 U.S. 252, 262, 77 S.Ct. 722, 1 L.Ed.2d 810. 
{¶ 23} However, for purposes of imposing reciprocal discipline, a final 
adjudication in another jurisdiction that an attorney has been subjected to 
discipline conclusively establishes the misconduct for purposes of a disciplinary 
proceeding in Ohio, Gov.Bar. R. V(11)(F)(5), unless the attorney demonstrates a 
lack of jurisdiction or fraud in the other jurisdiction’s disciplinary process.  
Gov.Bar R. V(11)(F)(4)(a)(i). 
SUPREME COURT OF OHIO 
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{¶ 24} The purpose of reciprocal discipline is to prevent relitigation of 
misconduct that has already been established in another jurisdiction and to protect 
the public from lawyers who commit such misconduct.  Official Comment 1, 
Prof.Cond.R. 8.5; see also People v. Bode (Colo.2005), 119 P.3d 1098, 1100 (the 
purpose of reciprocal discipline is “to enhance public confidence in the profession 
by preventing lawyers admitted to practice in more than one jurisdiction from 
avoiding the effect of discipline by simply practicing in another jurisdiction”).  
That purpose is not served, however, if the other jurisdiction has not actually 
established the underlying misconduct. 
{¶ 25} Here, respondent entered into a settlement agreement with the 
SEC, but he did not admit to violating any law or to committing any professional 
misconduct, and the SEC did not make an affirmative finding of misconduct 
based on clear and convincing evidence.  Respondent therefore has not been 
disciplined by the SEC for professional misconduct as an attorney, but rather has 
voluntarily agreed not to practice before the SEC in order to settle a dispute with 
that agency.  The suspension order thus cannot serve as a basis for imposing 
reciprocal discipline. 
{¶ 26} For these reasons, the SEC is not a “jurisdiction” for purposes of 
reciprocal discipline, it did not issue a disciplinary order within the meaning of 
Gov.Bar R. V(11)(F), and reciprocal discipline is not available in this case.  
Accordingly, the appropriate disposition is to dismiss this matter without 
imposing reciprocal discipline. 
Judgment accordingly. 
 
BROWN, 
C.J., 
and 
PFEIFER, 
LUNDBERG 
STRATTON, 
O’CONNOR, 
LANZINGER, and CUPP, JJ., concur. 
__________________ 
Jonathan E. Coughlan, Disciplinary Counsel, and Stacy Solochek 
Beckman, Assistant Disciplinary Counsel, for relator. 
January Term, 2010 
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Carpenter, Lipps & Leland, L.L.P., Jeffery A. Lipps, and David J. Leland, 
for respondent. 
______________________