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The trial of a former Goldman Sachs banker accused of helping loot Malaysia's 1MDB sovereign wealth fund will be paused due to late disclosure of some evidence by prosecutors to the defense, the judge in the case ruled yesterday, Reuters reported. Roger Ng, Goldman's former head of investment banking in Malaysia, has pleaded not guilty to charges of conspiring to launder money and to violate an anti-bribery law. Prosecutors say Ng received millions of dollars in kickbacks for helping embezzle funds from 1MDB. Prosecutors said in a Wednesday morning court filing — more than a week after opening statements in Ng's trial began — that they learned late on Tuesday that one U.S. Department of Justice (DOJ) division did not share with them or Ng some 15,500 documents related to Tim Leissner, Ng's former boss. "The government absolutely, absolutely, and admittedly at this point did not live up to its obligations," Marc Agnifilo, a defense attorney for Ng, told U.S. District Judge Margo Brodie in Brooklyn federal court outside the jury's presence. Agnifilo said that the documents could be critical for the defense. Brodie called the late disclosure "troubling," noting that she had previously asked prosecutors to make sure all disclosures were made. Leissner, who pleaded guilty to similar charges in 2018, is testifying against Ng as the government's star witness. Judge Brodie said that she would allow prosecutors to finish questioning Leissner, then pause the trial before cross-examination to give Agnifilo time to review the new documents. "I will give you as much time as you need," Judge Brodie said, though she noted that the trial could not be delayed indefinitely. Agnifilo argues that $35 million Ng received, that the government calls ill-gotten gains, was actually derived from an unrelated business venture between Ng's wife and Leissner's ex-wife. Assistant U.S. Attorney Alixandra Smith said the delayed disclosure was an "inexcusable error" and did not object to pausing the trial.

A federal appeals court revived a McKinsey & Co. critic’s lawsuit alleging the consulting giant concealed conflicts of interest to obtain lucrative appointments advising bankrupt companies at the expense of rival firms, WSJ Pro Bankruptcy reported. Yesterday’s ruling by the Second Circuit Court of Appeals in New York revived a racketeering lawsuit accusing McKinsey of submitting false and misleading statements in 13 bankruptcy cases to hide financial conflicts that could have disqualified the firm from being retained. Jay Alix, the retired founder of rival consultant AlixPartners LLP, should also be allowed to pursue allegations that McKinsey ran a pay-to-play scheme to rig the marketplace for bankruptcy assignments in its favor, according to the appeals court. The ruling reinstated Mr. Alix’s lawsuit after it was dismissed by a federal judge in 2019. A McKinsey representative said Wednesday that the decision “solely addresses technical pleading standards and not whether Mr. Alix’s claims are true.” He has waged a broader battle against McKinsey for years across multiple courts alleging the firm profited by misrepresenting conflicts of interest involving major clients. “To date, Mr. Alix has lost all six of his lawsuits against McKinsey, and we are confident the evidence will ultimately show that this lawsuit is similarly meritless,” McKinsey said Wednesday. Had McKinsey truthfully and timely disclosed its conflicts, the firm would have been disqualified from obtaining at least some of the assignments it received, according to Mr. Alix.

Sycamore, Ill., attorney Kevin Johnson (aka “K.O. Johnson”), was sentenced Wednesday to spend 2 years in federal prison for bankruptcy fraud, WTVO reported. Johnson was found guilty in August on four counts of bankruptcy fraud, one count of making a false entry in a document in a bankruptcy proceeding, one count of withholding records from the Bankruptcy Trustee, and one count of concealment of property consisting of account receivables belonging to the bankruptcy estate. Johnson’s sentence will be followed by two years of supervised release.