BEVERLY HILLS ATTORNEY FACING DISBARMENT FOR POCKETING INTEREST ON ESCROW MONEY
San Francisco, April 23, 2013 – A State Bar Court hearing judge has recommended the disbarment of a Beverly Hills attorney for misappropriating about $400,000 in interest from two investment vehicles that he agreed to hold in escrow pending their sale.
In each case, Jon A. Divens, 57, [bar # 145549] agreed to hold in escrow a collateralized mortgage obligation (CMO), a type of investment vehicle that owns an underlying pool of mortgages. When the proposed sales of the CMOs fell through, Divens hid the CMOs from their rightful owners for months and transferred the monthly interest payments to his personal investment accounts.
State Bar Court Judge Richard A. Platel rejected Divens’ argument that he was entitled to the interest under article 8 of the California Uniform Commercial Code and found him culpable of three counts of moral turpitude.
“It is clear from the evidence that, from day one, respondent never intended on returning the Cobalt CMO or the FNMA CMO or the interest income they generated to the rightful owners,” Judge Platel wrote in the April 17 decision. “Respondent displays a complete lack of insight and recognition of the wrongfulness of his misconduct. What is more, the record establishes that, after 23 years as a member of the State Bar of California, respondent fails to understand and appreciate the basic duties of a fiduciary. Finally, respondent’s misconduct displays a shocking lack of basic honesty.”
Platel placed Divens’ law license on inactive status until the California Supreme Court acts on the disbarment recommendation. The case was handled by Senior Trial Counsel Eli D. Morgenstern.
The State Bar of California is an administrative arm of the California Supreme Court, serving the public and seeking to improve the justice system for more than 80 years. All lawyers practicing law in California must be members of the State Bar. By April 2013, membership reached more than 242,000.