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Bar counsel wants Sawyer suspended Her attorney says case is vendetta by Smith Barney By ALBERTO ENRIQUEZ A volunteer panel heard closing arguments Thursday in the Oregon State Bar trial of Medford attorney Sandra Sawyer. Panel attorneys Howard Speer and Derek Johnson, and lay member Richard Hansen, all of Eugene, will decide whether Sawyer violated the code governing attorneys' legal and ethical behavior. A verdict is expected within two months. In the event of a guilty verdict, the three also must decide whether to admonish, suspend or disbar Sawyer. Bar counsel Jeff Kilmer called for a suspension of one year -- any suspension of more than six months must also be reviewed by the Oregon Supreme Court. The action stems from Sawyer's defense of former Medford broker Lew Aytes, who was found to have violated securities regulations and corporate policies through the sale of certain limited partnerships. The violations occurred between July 1992 and January 1995 while Aytes was an employee of Smith Barney but went undiscovered until after he left Smith Barney. In January 1997, Aytes signed a letter consenting to a proposed settlement of the rule violations, and was eventually fined $100,000, censured and suspended from associating with any member of the National Association of Securities Dealers for 18 months. The complaint alleges that, while acting as Aytes' attorney, Sawyer: Gave legal advice to nonclients against their own better interests. Advised multiple clients with clearly conflicting interests to the betterment of Aytes. Acted with deceit in a scheme to defraud Smith Barney of claims against Aytes. In his closing argument, Kilmer said the bar originally had recommended a six-month suspension, but that Sawyer's attempts to "rationalize, deny and compartmentalize" her actions warranted a stiffer one-year suspension. In particular, Kilmer said, Sawyer's argument that a letter to former Aytes client Janet Hill was mere information, and not legal advice intended to defraud Smith Barney, would strain the credulity of attorney and layman alike. Sawyer's attorney, William Deatherage of Medford, argued that the panel needed to consider the real world and not view the case from the "ivory tower" of the bar's Lake Oswego offices. Kilmer simply failed to prove any violation by clear and convincing evidence, he said. "It's very obvious that this is a vendetta created for Smith Barney," Deatherage said. He said the letter to Hill doesn't say "let's cheat Smith Barney," and no attorney would write such a letter. In reality, it was information only, he said. Deatherage said alleged conflicts that arose when Sawyer continued to advise both Aytes and his sister-in-law Janice Watson were only potential conflicts, and did not require Sawyer to separate herself from the case at that point. Aytes had involved Janice Watson in a scheme to conduct unsupervised securities trades outside of Smith Barney. Sawyer had testified that she and her husband, former Jackson County Circuit Judge Loren Sawyer, had been friends with both the Ayteses and the Watsons long before the legal problems arose. Aytes' wife, Kathryn, worked in Sandra Sawyer's office, and both Sawyers were Aytes' clients. The offer to continue to defend the Watsons at no cost was not a means of controlling them, as Kilmer argued, but a humanitarian gesture to clients who could not afford representation, Deatherage said. But Kilmer said that the action did cost the Watsons emotional and financial damage by involving them in a lawsuit. And although Hill did not act on Sawyer's letter, other former Aytes clients did. They signed a waiver of claims against him prepared by Sawyer, then accepted a settlement from Smith Barney, which did not know they had waived claims against Aytes. This resulted in actual harm to Smith Barney and to Aytes' former clients in lost claims, increased legal costs, and reimbursements to clients, Kilmer said. He estimated Smith Barney's damages, including court costs, at $800,000, and heaped scorn on Sawyer's testimony that the amount was like $10 to Smith Barney, which had created most of the problems with a vendetta against her client. "When someone steals $10, that's theft," Kilmer said. "And when someone steals $250, we call that a felony." Mail Tribune Copyright � The Mail Tribune 1999, Medford, Oregon USA