Weil Gotshal partner Gerhard Schmidt, co-managing partner of the Biglaw firm’s German offices and a private equity and mergers & acquisitions attorney, is on the hot seat thanks to a €5 million personal investment.
According to reporting by the Financial Times, in 2017 Schmidt invested the money in private equity group Novalpina Capital, sans the typical investor fees due to his relationship with the founders, and chaired Novalpina Capital. That PE fund purchased Israel’s NSO Group, which infamously makes the military grade spyware Pegasus which has allegedly been used to spy on human right activists, dissidents, and journalists.
In 2021, the fund hit financial difficulties, and its founders, Stephen Peel, Stefan Kowski and Bastian Lueken, had a fall out –all of which is the subject of litigation in Luxembourg. A new filing made in a New York court, seeks to have Weil provide information in that case.
Court documents indicate Schmidt advised Novalpina on the NSO deal, and he was a member of the board of the holding company that oversaw NSO operations. In November 2021, the US Commerce Department blacklisted NSO, saying Pegasus enabled “transnational repression, which is the practice of authoritarian governments targeting dissidents, journalists and activists outside of their sovereign borders to silence dissent.”
NSO’s Pegasus tool can read encrypted messages, turn on a phone’s camera and microphone remotely, and track its location.
When NSO’s oversight board took steps to renew Saudi Arabia’s access to the tool after the murder of journalist Jamal Khashoggi, Schmidt was among those who “would have been voting”, the court filing said.
NSO had halted a contract with Saudi Arabia after allegations that its technology had been used to track Khashoggi, who was murdered in 2018. The kingdom’s access to the software was restored by mid-2019, according to two people familiar with the decision.
Schmidt is retiring from Weil at the end of the year and the firm is retooling its German leadership team as a result.
A statement from NSO said it “complies fully with all applicable laws and regulations, and sells its technologies exclusively to vetted intelligence and law enforcement agencies.”
Earlier: Biglaw Firm Dragged Into Case Accusing Client Of Whitewashing Sketchy Investments
Kathryn Rubino is a Senior Editor at Above the Law, host of The Jabot podcast, and co-host of Thinking Like A Lawyer. AtL tipsters are the best, so please connect with her. Feel free to email her with any tips, questions, or comments and follow her on Twitter @Kathryn1 or Mastodon @Kathryn1@mastodon.social.
The post Weil Gotshal Partner Caught In Spyware Scandal appeared first on Above the Law.