High-profile former federal prosecutor Andrew Stolper said Tuesday he had teamed up with an ex-FBI agent to form a private equity firm specializing in litigation finance, a growing business in the legal industry.
Stolper, whose career included the ill-fated Broadcom case in 2009, said Crux Capital launched on Monday. He resigned last week from his position with the Attorney's office in Santa Ana, where he had worked for 10 years.
The litigation finance boutique, based in Irvine, Calif., will specialize in plaintiff's commercial litigation and eventually staff up to about five people.
A spokesman for the U.S. Attorney's office declined to comment about Stolper's move into private practice.
A U.S. District Court judge singled out Stolper for criticism when he dismissed criminal stock fraud charges against Broadcom Corp (BRCM.O) co-founder Henry T. Nicholas III in 2009, citing a "shameful" prosecution campaign to intimidate witnesses.
Stolper told Reuters in an interview that a subsequent investigation by the U.S. Attorney's office had found "no misconduct" in the handling of the Broadcom case, and he did not expect his past to have any bearing on his ability to raise funds for his new venture.
"We are still in the infancy of our business," said Stolper, who declined to disclose how much money he had raised or who his backers were.
Litigation finance is a means for hedge funds and other investors to provide money to litigants in exchange for a cut of any settlements or verdicts. It traditionally has been used to fund personal injury cases but recently has been used to back commercial litigation, as investors seek to make money from betting on lawsuits.
Stolper's partner is Peter Norell, a former agent with the Federal Bureau of Investigations who pleaded guilty in 2010 to illegally accessing FBI records and threatening to launch a criminal probe to help an acquaintance collect a debt.
He was sentenced to a year of probation, including three months of home confinement. Norell said he left the agency around the time of his conviction.
Norell worked with Stolper in a number of corporate fraud investigations. In 2009 their work secured fraud convictions against an Orange County Lamborghini dealer and two former executives of medical device manufacturer Endocare Inc.
(Editing by Stephen Coates)