A former U.S. prosecutor and an ex-FBI agent are entering into a new line of business together.
Earlier this week, former federal prosecutor Andrew Stolper announced that he had teamed up with ex-FBI agent Peter Norell to launch a private equity firm specializing in litigation financing. Litigation financing is a growing business in the legal industry that allows hedge funds and other investors to provide money to litigants in exchange for a portion of any settlements or verdicts. It also is a strategy in-house legal departments can use to cut costs and transfer risk to a third party.
Stolper and Norell’s Irvine, Calif.-based company, Crux Capital, launched on Monday and specializes in plaintiffs commercial litigation. The company could eventually staff up to about five people. “We are still in the infancy of our business,” Stolper told Thomson Reuters. He didn’t say how much money Crux Capital had raised or who the company’s backers are.
Last week, Stolper resigned from his position with the U.S. Attorney’s office in Santa Ana, Calif., where he had worked for a decade. During his stint as a federal prosecutor, he faced backlash from a federal judge who dismissed criminal stock fraud charges against Broadcom Corp. co-founder Henry T. Nicholas III in 2009. The judge accused Stolper of heading a “shameful” prosecution campaign to intimidate witnesses. Stolper told Thomson Reuters that the U.S. Attorney’s office investigated the alleged prosecutorial misconduct and found that no wrongdoing occurred. He says he doesn’t expect the blip on his record to influence his ability to raise funds for Crux Capital.
Stolper’s partner, Norell, is a former FBI agent who pleaded guilty in 2010 to illegally accessing FBI records and threatening to launch a criminal probe to help an acquaintance collect a debt. The misdeed led to a year of probation, including three months of home confinement. Norell left the FBI at around the time of his conviction.
Read more InsideCounsel coverage related to litigation financing:
Facts & Figures: Litigation financing is here to stay
Litigation: The ethical considerations of litigation financing
