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Barry A. Hammer (WSBA No. 6444, admitted 1975), of Everett, resigned in lieu of disbarment, effective June 20, 2005. This resignation was based on his conduct in entering into business transactions with multiple clients and making misrepresentations to the clients about the risks of investing in his business.
Mr. Hammer was the sole owner and operator of a corporation known as Able Mortgage. In six instances, between 1992 and 2004, Mr. Hammer persuaded clients to invest their money in Able Mortgage. Most of the investments were documented in promissory notes but were not secured. Mr. Hammer did not inform the clients that Able Mortgage had substantial debts; rather, he told clients that the investments would be perfectly safe and that the business did not have any problems. Mr. Hammer did not inform the clients of the risks involved in the investments, nor did he suggest that the clients seek the advice of independent counsel before investing the money. The terms of the investment transactions were not fair and reasonable to the clients in that the clients were not adequately apprised of the risks involved.
On September 17, 2004, Mr. Hammer filed for bankruptcy. His debts to the six clients at that time amounted to more than $1,375,000.
Mr. Hammer's conduct violated RPC 1.8(a), prohibiting a lawyer from entering into a business transaction with a client or knowingly acquiring an ownership, possessory, security, or other pecuniary interest adverse to a client unless the transaction and its terms are fair and reasonable and fully disclosed and transmitted in writing to the client, the client is given opportunity to seek the advice of independent counsel, and the client consents; and RPC 8.4(c), prohibiting a lawyer from engaging in conduct involving dishonesty, fraud, deceit, or misrepresentation.
Christine Gray represented the Bar Association. John A. Holmes represented Mr. Hammer. |