In Re Application of Swendiman ( 2016 )

[Until this opinion appears in the Ohio Official Reports advance sheets, it may be cited as In
re Application of Swendiman, Slip Opinion No. 2016-Ohio-2813.]
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. 2016-OHIO-2813
IN RE APPLICATION OF SWENDIMAN.
[Until this opinion appears in the Ohio Official Reports advance sheets, it
may be cited as In re Application of Swendiman, Slip Opinion
No. 2016-Ohio-2813.]
Application for admission without examination―Applicant engaged in
unauthorized practice of law in Ohio―Application
disapproved―Applicant may reapply.
(No. 2015-0540—Submitted June 10, 2015—Decided May 5, 2016.)
ON REPORT by the Board of Commissioners on Character and
Fitness of the Supreme Court, No. 592.
___________________________
Per Curiam.
{¶ 1} Matthew Ashley Swendiman of Cincinnati, Ohio, has applied for
admission to the Ohio bar without examination. The admissions committee of the
Cincinnati Bar Association certified that Swendiman possessed the requisite
character and fitness and recommended that his application be approved. The Board
of Commissioners on Character and Fitness, however, invoked its sua sponte
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investigatory authority, conferred by Gov.Bar R. I(10)(B)(2)(e), apparently due to
concerns arising from investigations initiated by the Occupational Safety and
Health Administration (“OSHA”) and the CFA Institute, an association of
investment professionals, as well as concerns that Swendiman had engaged in the
unauthorized practice of law in Ohio.
{¶ 2} After conducting a hearing, a panel of the board issued a report
finding that Swendiman engaged in the unauthorized practice of law in Ohio before
and after he applied for admission to the Ohio bar and that he has therefore failed
to prove that he currently possesses the requisite character and fitness to practice
law in this state. Therefore the panel recommended that his application for
admission without examination be denied. The board adopted the panel’s report in
its entirety and recommends that we disapprove Swendiman’s application.
Swendiman has not objected to the board’s report and recommendation.
{¶ 3} We adopt the board’s findings, disapprove Swendiman’s pending
application for admission without examination, and order him to immediately cease
and desist activities constituting the practice of law in Ohio unless and until he is
duly licensed to practice in this state.
Swendiman’s Practice of Law in Ohio
{¶ 4} Swendiman has been admitted to practice law in three jurisdictions,
including Indiana in 2001, Connecticut in 2003 (although this license is no longer
active), and the District of Columbia in 2005. Since his first admission, he has
primarily engaged in the financial-investment business as a lawyer and as a
financial advisor. In 2006, he took a position as in-house counsel for Fifth Third
Bank and its asset-management subsidiary in Ohio and eventually became the chief
administrative officer of that subsidiary. During his time with Fifth Third,
Swendiman registered for corporate status pursuant to Gov.Bar R. VI(6).
{¶ 5} Following Swendiman’s tenure at Fifth Third, two employees filed a
complaint with OSHA alleging that their employment was terminated after they
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voiced concerns about alleged exaggerations and misrepresentations in the
prospectuses for products offered by Fifth Third’s asset-management subsidiary
during Swendiman’s tenure. Although the complaint apparently alleged that
Swendiman had failed to correct misinformation regarding the identity of some of
the subsidiary’s fund managers, he told the panel that OSHA never contacted him
about the allegations. He also reported that the CFA Institute terminated its related
investigation into the allegations after an internal Fifth Third investigation and a
third-party investigation conducted at Fifth Third’s request found no evidence of
wrongdoing.
{¶ 6} Swendiman left Fifth Third in April 2011 to take a position as chief
operating officer with another corporation, but he left that job after just seven
months to start his own investment company, Swendiman Wealth Strategies, Inc.
He became of counsel to the Cincinnati law firm Graydon, Head & Ritchey, L.L.P.,
in September 2012 and worked part-time for the firm while continuing to operate
his investment company. Approximately six months after joining the firm,
Swendiman applied for admission to the Ohio bar without examination. And by
late 2014, he had closed his business and began working full-time for the firm,
though his application for admission to the bar remained pending.
{¶ 7} In a June 2013 amended affidavit of past practice, Swendiman avers
that he has been and is practicing law at the Graydon firm. At the panel hearing,
he testified that he took the position because his clients and other professional
contacts were asking him not only to provide financial investment advice, but also
to perform legal services for them. The panel found that because of Swendiman’s
extensive experience in investment advising and contacts with institutional clients
around the country, he was responsible for establishing client relationships and
serving as a resource to the Graydon firm’s securities group.
{¶ 8} Gov.Bar R. VII(2)(A)(1) defines the unauthorized practice of law in
Ohio as the rendering of legal services for another by any person not admitted to
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practice in Ohio under Rule I of the Supreme Court Rules for the Government of
the Bar. A person not so admitted may practice law if he or she is rendering legal
services in compliance with the requirements of Prof.Cond.R. 5.5 regarding the
multijurisdictional practice of law. Swendiman argued that his practice with the
Graydon firm is authorized by Prof.Cond.R. 5.5(d)(2).
{¶ 9} Prof.Cond.R. 5.5(b)(1) prohibits a lawyer who is not admitted to
practice in this jurisdiction from establishing an office or other systematic and
continuous presence in this jurisdiction for the practice of law except as otherwise
authorized by the Professional Rules or other law. Swendiman admitted that he has
established an office and a continuous presence in Ohio and that he had practiced
law in this state, but he contended that his practice was authorized pursuant to
Prof.Cond.R. 5.5(d)(2), which provides that a lawyer admitted and in good standing
in another United States jurisdiction may provide legal services in this jurisdiction
if “the lawyer is providing services that the lawyer is authorized to provide by
federal or Ohio law.” During the proceedings below, Swendiman appeared to argue
that because he was advising clients regarding federal law only and because he was
licensed to practice law in the District of Columbia, where filings before the
Securities and Exchange Commission and other federal agencies are made, he was
authorized to render those services in Ohio. The panel noted that Swendiman did
not cite any legal authority to support his “seemingly novel” argument that his
practice of law in Ohio was authorized, and it found no cases directly on point.
Moreover, the panel found that cases in which a lawyer’s practice of law has been
deemed to be authorized by federal law occurred when the lawyer’s practice had
been specifically authorized by a separate federal admissions authority.
{¶ 10} For example, in Disciplinary Counsel v. Harris, 137 Ohio St. 3d 1,
2013-Ohio-4026, 996 N.E.2d 921, ¶ 14-15, this court found that Harris did not
engage in the unauthorized practice of law when he represented a client before the
United States Bankruptcy Court for the Northern District of Ohio, because he had
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been admitted to practice in that court, even though he had not been admitted to the
Ohio bar. In doing so, we acknowledged that “ ‘[a] bankruptcy court has the power
to regulate the practice of law in the cases before it.’ ” Harris at ¶ 15, quoting In
re Ferguson, 326 B.R. 419, 422 (Bankr.N.D.Ohio 2005). See also In re Desilets,
291 F.3d 925 (6th Cir.2002) (holding that an attorney licensed in Texas and
admitted to practice before a federal bankruptcy court in Michigan was authorized
to practice federal bankruptcy law in Michigan, even though he was not licensed in
Michigan, because the bankruptcy court’s rules permitted the attorney not only to
appear before the bankruptcy court, but also to counsel clients in bankruptcy actions
or proceedings). Distinguishing Swendiman’s case from Harris and Desilets,
however, on the ground that admission to the District of Columbia bar is not
tantamount to admission by a separate federal authority, the panel found that
Swendiman’s reliance on Prof.Cond.R. 5.5(d)(2) was misplaced.
{¶ 11} Although the panel did not believe that Swendiman’s conduct was
intentional, it found that he was not particularly attentive to Prof.Cond.R. 5.5 or
thoughtful or diligent about how he should proceed once he decided to resume the
practice of law, as he waited almost six months after he commenced his legal
employment with the Graydon firm to apply for admission to the Ohio bar. Finding
that Swendiman engaged in the unauthorized practice of law in Ohio and that he
continued to do so at the time of his admissions hearing, however, the panel found
that he did not possess the requisite character and fitness to practice law in this
state.
{¶ 12} The board adopted the panel’s findings of fact and recommendation
that Swendiman’s pending application for admission without examination be
disapproved. The board recommended that he be permitted to reapply for
admission to the practice of law in Ohio by filing a new application and undergoing
a complete character and fitness investigation, including a new character and fitness
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interview and report by the National Conference of Bar Examiners. And as noted
above, Swendiman failed to object to the board’s findings or recommendation.
Disposition
{¶ 13} An applicant to the Ohio bar must prove by clear and convincing
evidence that he or she “possesses the requisite character, fitness, and moral
qualifications for admission to the practice of law.” Gov.Bar R. I(11)(D)(1). The
applicant’s record must justify “the trust of clients, adversaries, courts, and others
with respect to the professional duties owed to them.” Gov.Bar R. I(11)(D)(3). “A
record manifesting a significant deficiency in the honesty, trustworthiness,
diligence, or reliability of an applicant may constitute a basis for disapproval of the
applicant.” Id.
{¶ 14} Commission of an act constituting the unauthorized practice of law
is one factor to be considered in determining whether an applicant possesses the
requisite character, fitness, and moral qualifications to practice law in Ohio.
Gov.Bar R. I(11)(D)(3)(c). In assigning weight and significance to the applicant’s
prior conduct, we consider the age of the applicant at the time of the conduct, the
recency of the conduct, and the reliability of the information concerning the
conduct, among other factors. Gov.Bar R. I(11)(D)(4).
{¶ 15} The panel found that Swendiman has engaged in the unauthorized
practice of law in Ohio before and after he submitted his application for admission
to the Ohio bar without examination. We find, at a minimum, that he has failed to
present sufficient evidence to establish that he was authorized by Ohio or federal
law to provide the legal services that he has rendered to clients in Ohio through his
employment with Graydon, Head & Ritchey. Therefore, we agree that he has failed
to carry his burden of proving by clear and convincing evidence that he currently
possesses the requisite character, fitness, and moral qualifications for admission to
the practice of law in Ohio.
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{¶ 16} Accordingly, we adopt the board’s recommendation to disapprove
Swendiman’s pending application for admission without examination. Swendiman
may reapply for admission without examination, and if he does, he will be subject
to a full character and fitness examination. Furthermore, we order Swendiman to
immediately cease and desist all activities described herein and any other activities
constituting the practice of law in Ohio unless and until he is duly licensed to
practice in this state.
Judgment accordingly.
PFEIFER, O’DONNELL, KENNEDY, and FRENCH, JJ., concur.
O’CONNOR, C.J., dissents and would permanently deny admission.
LANZINGER and O’NEILL, JJ., dissent and would permanently deny
admission without prior examination.
_________________
Graydon, Head & Ritchey, L.L.P., and Steven P. Goodin, for applicant.
Maria C. Palermo; Santen & Hughes and Stephanie M. Day, for Cincinnati
Bar Association.
_________________
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