Manhattan judge rules SEC won’t pay firm’s expense bill

Manhattan U.S. District Judge William Pauley found an answer to the question “how much is too much” in a ruling Friday that spared the Securities and Exchange Commission from paying an outsized bill to a Panamanian securities firm, Verdmont Capital, as expenses for a deposition.

The SEC had agreed to foot the “cost and expense” of deposing two of the firm’s principals in London, Pauley said, and ended up being charged $6,000 first-class airfare for the two and a lawyer, three $700-a-night rooms at the five-star Lanesborough Hotel, $1,000 in bar charges during the four nights, $185 for two bottles of wine including a “Restless River Cabernet,” and tour tickets for St. Paul’s Cathedral.

The “exquisite” expense tab entered “uncharted territory,” Pauley said, when the three also billed for a two-day trip to Madrid to recuperate from the deposition, with $1,500 in lodging plus dining out on “Spanish beef tenderloin, at Restaurante Oter.”

Pauley said that the agreement didn’t require the government to pay for “a bacchanalian adventure” and “Saturnalian revelries” abroad. He allowed only the normal government’s per diem rate for SEC lawyers.

“While no one could be faulted for enjoying the finer things Europe has to offer,” Pauley concluded, “it is generally ill-advised to seek reimbursement from the public fisc.”