Is Canopy Financial Another Black Eye for Wilson Sonsini?

It appears that venture capitalists aren’t the only ones to have erased Canopy Financial from their websites, following allegations that the company cooked its books. peHUB has learned that law firm Wilson Sonsini also scrubbed itself clean, removing references to Canopy from the profiles of partner and associate Daniel Green. Here’s the cached version of Green’s bio, for example, and here’s the current version.

If this sounds familiar, it may be because Wilson Sonsini did the same thing with Entellium, the last company known to have enticed well-known VC firms with bogus financials. As Gawker’s Owen Thomas wrote in October 2008:

If your company ever gets into serious trouble, wouldn’t you like to know your lawyer’s standing behind you publicly? Better hope you’re not represented by Wilson Sonsini, then. After Seattle software startup Entellium saw its CEO and CFO charged with wire fraud and cooking the company’s books, Entellium disappeared from Wilson Sonsini Goodrich & Rosati partner Craig Sherman’s list of clients.

It’s unclear if Wilson Sonsini attorneys were the “legal professionals” ex-Canopy CEO Vikram Kashyap “relied on financial… in accepting the authenticity of the company’s financials,” as he said in his only public comment on the matter.

peHUB has reached out to Wilson Sonsini for comment, and will update this post if we hear back…

2 Comments

  • Dan, Hi! Can you enlighten me by elaborating on this? I’d have normally understood that an audit and financial advice in the performance of due diligence would have been the domain of financial advisors, not legal advisors. Am not defending WSGR, just want to know how this actually works in such deals. Thanks!

  • The lawyers are responsible for review of the company’s financial statements. When Canopy admits — via its lawyer — that fraud was committed (the attorney said 2 individuals appear to have been involved), then why shouldn’t the law firm distance itself from the firm. The investors were duped, the lawyers were duped, … . No need to to keep that PR on your website or the bios of your professionals. Why should Wilson “stand behind” Canopy?

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