The Canopy Financial startup scandal that broke just before Thanksgiving is continuing to unfold after taking a break for some turkey and cranberry sauce.
Legal Pad has learned that Paul Hastings is doing the internal investigation at Canopy, a once-promising healthcare software company that’s accused of making up financial statements.
Ismail Ramsey: The lawyers were "duped," too, after the jump …
Although the company is based in San Francisco, most of its operations are actually in Chicago, so lawyers from Paul Hastings’ Chicago office are handling the investigation.
Just before Thanksgiving, Canopy’s Vik Kashyap stepped down as CEO, President Jeremy Blackburn resigned, and Chief Technology Officer Anthony Banas was placed on administrative leave, according to media reports.
The FBI is investigating and the company has filed for bankruptcy. Looks like Paul Hastings will have a lot to look into.
Last week, Kashyap’s lawyer, Ismail Ramsey, released a statement saying that the CEO "relied on financial and legal professionals in accepting the authenticity of the company's financials,” and had "no prior knowledge whatsoever of any fraud regarding Canopy's financial statements."
Ramsey emphasized today that the lawyers were duped, just like his client.
“The evidence we’ve seen demonstrates that they acted in good faith,” Ramsey said. “Other professionals were duped like our client.”
— Zusha Elinson