A Swiss commodities trader accused of helping Russian oil companies evade sanctions accused Baker & Hostetler LLP and a partner of legal malpractice and breach of fiduciary duty in a complaint filed in Los Angeles.
Paramount Energy & Commodities SA alleges that BakerHostetler’s Jeffrey P. Berg concealed his business relationship with a man who sought to take over the company, did not turn over the client file after Paramount Energy & Commodities terminated his representation, and wrote to the Swiss ambassador to the U.S. asking Paramount Energy & Commodities SA’s accounts to be frozen.
“BakerHostetler’s failure to turn over its files is improper,” reads the complaint signed by Ryan D. Saba of Rosen Saba LLP.
“BakerHostetler was outside counsel for PECSA and is refusing instructions to send PECSA its file from PECSA’s sole director because an alleged shareholder of PECSA might be involved in a non-litigated verbal dispute with the current sole shareholder. This decision by defendants is a violation of their professional responsibilities,” Saba continued. Paramount Energy & Commodities SA v. Baker & Hostetler LLP, 24STCV11278 (L.A. Super. Ct., filed May 6, 2024).
Berg and BakerHostetler representatives did not respond to repeated requests for comment.
The claims against BakerHostetler are part a wider story that resembles a Hollywood blockbuster.
Paramount Energy & Commodities SA is based in Geneva. Its Dutch owner, Niels Troost, is among a small group of commodities traders who started buying Russian oil at deep discounts after the European Union forbade companies there from doing business with Russian energy company Rosneft.
Troost established Paramount Energy & Commodities DMCC in Dubai to avoid European sanctions, according to a Wall Street Journal report citing a person “familiar with the company.”
Troost also hired Ankit Desai, a lobbyist and former aide to then-Sen. Joe Biden, to advise on whether the U.S. planned to impose punitive measures against Troost and his companies.
“Registrant will provide professional consulting services to the Foreign Principal in the form of researching potential sanctions by the United States Office of Foreign Assets Control,” reads Desai’s registration statement with the U.S. Department of Justice.
Troost was sanctioned by the UK government in February for allegedly facilitating the “unfettered trade of Russian oil outside the reach of UK and G7 sanctions.” Paramount Energy & Commodities SA entered voluntary liquidation in March.
Paramount Energy & Commodities SA’s complaint states Troost was introduced to an individual named Gaurav Srivastava in May 2022. Srivastava allegedly presented himself as an undercover CIA operative, claiming the agency, in coordination with the FBI, needed to utilize Troost’s company for a mission.
“Mr. Srivastava explained that for U.S. policy reasons, the Office of Foreign Asset Control could not license PECSA to participate in the joint CIA-FBI program while PECSA was a 100% foreign entity, and Mr. Srivastava needed to control the group of companies for the U.S. government. This all turned out to be an elaborate fraud scheme that was unknown to its victims, including Mr. Troost and PECSA,” Saba wrote.
Srivastava allegedly persuaded Troost to transfer 50% of his ownership in Paramount Energy & Commodities SA to a holding company in which Srivastava was the sole beneficiary. Srivastava also introduced Paramount Energy & Commodities to Berg, who was to take steps to obtain an OFAC license permitting the company to participate in the CIA-FBI program.
Paramount Energy & Commodities SA ceased activities involving Russian oil in October 2022 and with Srivastava’s “impulsion” signed an engagement agreement with BakerHostetler the following month.
Paramount Energy & Commodities SA alleges that Berg said that Srivastava was a government agent and that BakerHostetler had “a lot of weight with the U.S. government” because the firm had represented the federal government during the recovery of investor funds from Bernard Madoff. BakerHostetler was court-appointed counsel to the Securities Investor Protection Act (SIPA) Trustee Irving H. Picard during that matter.
The company also alleges that Berg and Srivastava were partners in a South African business called Himmelhoch
Petroleum and Gas.
Troost hired attorneys and investigators in April 2023 to investigate Srivastava and his associates. They concluded that he was not working for the CIA. Instead, he was attempting to coerce Troost into a transaction that would enable him to take control of Paramount Energy & Commodities SA and its assets.
Srivastava reportedly spoke at the Atlantic Council’s Gobal Food Security Forum in 2022. An email to the Gaurav & Sharon Srivastava Family Foundation, a charity, seeking comment was not answered by deadline.
“I have no comment on whether Srivastava will be named as a defendant,” Saba said in an emailed statement.
