Judge Throws Out Fraud, Misdeed Claims Against Cox

SANTA ANA —  An Orange County judge on Wednesday threw out fraud and malpractice allegations that a court-appointed receiver for scandal-ridden First Pension Corp. had filed against U.S. Rep. Christopher Cox and his former law colleagues, but gave the receiver 30 days to amend the action.

Superior Court Judge Francisco F. Firmat, however, has not yet made a ruling on whether to dismiss allegations that investors have made in a separate lawsuit against Cox, former state Corporations Commissioner Gary Mendoza and the law firm of Latham & Watkins, where Cox and Mendoza once worked.

In a preliminary ruling last month in the investors’ lawsuit, the judge overruled efforts by the Newport Beach Republican and other defendants to dismiss four claims, including fraud and misrepresentation. The judge threw out two other claims, giving investors 30 days to amend their complaint.

About 8,000 investors lost $136 million when First Pension and related companies collapsed in April 1994. William E. Cooper, mastermind of the Irvine operations, and two cohorts pleaded guilty to fraud and were imprisoned.

In the receiver’s lawsuit, Firmat made final his preliminary ruling last month dismissing the receiver’s contentions that Cox and Mendoza helped cover up First Pension’s fraudulent activities when they handled corporate work as attorneys at Latham in the 1980s.

Don A. Proudfoot Jr. and Stephen T. Owens, newly hired attorneys for the receiver, said they will decide whether to file an amended lawsuit after evaluating the case “with fresh eyes and a view of the public interest in recovering money for the investors.”

Cox and the other defendants have denied any wrongdoing.