Alejandro Pignataro, LLM, is a partner at Pignataro Abogados (Costa Rica). His practice focuses on corporate M&A, and asset tracing and recovery. He frequently serves as local counsel to foreign receiverships, liquidators, government agencies and private victims in asset tracing and recovery cases across several jurisdictions. He has been appointed as the Costa Rican member for ICC FraudNet, and he has participated as a host and panellist at international asset tracing and recovery conferences.
What inspired you to pursue a legal career?
The ability to interact with people; assist them with their legal needs; and bring them closer towards reaching their business goals or solving their disputes. Being an attorney allows me to collaborate with professionals from different fields (eg, investment bankers, private investigators, forensic auditors) in providing integral advice to our clients so they can make informed decisions, or helping them towards securing a positive result in litigation.
How has the legal market changed since you first started practising?
Significant changes have occurred in the legal market over the past 20-plus years, including the consolidation of large firms, the disappearance of medium-sized ones and the increased number of boutiques; audit and accounting firms re-entering the legal arena since Sarbanes-Oxley; and technology and artificial intelligence replacing repetitive legal tasks, among other changes. Compensation structures have had to adapt to clients demanding more creative, flexible and results-oriented fee proposals. Litigation funding has also been a game changer as it relates to litigation in general, and asset recovery in particular.
What does your role as the Costa Rican representative for ICC FraudNet entail, and how does it enhance your work in private practice?
Serving as ICC FraudNet’s member in my country has been of great value for both our firm’s corporate and litigation practices, as it allows us to direct our clients’ international needs to competent counsel in the different countries where they do business and where the network has a presence, and vice versa. From a business perspective, regional opportunities are shared with counsel in jurisdictions nearby. Litigation-wise, matters dealing with insolvency, fraud or corruption are sent our way if all or part of the matter has a Costa Rican component to it.
What qualities make an effective asset recovery lawyer?
Asset recovery work requires knowing the legally available tools to search and secure assets in a swift and discreet manner, while formal requests are processed through the appropriate channels. Local knowledge of the administrative and judicial authorities is also of value to ensure prompt attention to time-sensitive matters. Having a solid international network of specialised practitioners, such as ICC FraudNet, in a world where fraud is as global as business is also crucial, as assets are often transferred to jurisdictions other than those where the fraud was committed – as is the incorporation of the legal entities used to hide them.
Your practice often requires you to collaborate with different enforcement agencies. How do you prepare for this?
There are two types of cases from this perspective, with regard to the local enforcement agencies. The first are those where a government agency from another country is involved (ie, a regulator or enforcement agency), in which cooperation is swifter as diplomatic channels work in parallel with formal legal proceedings. The second are those in which only private parties are involved, and therefore the local authorities are more hesitant to assist without the formalities required by the courts.
In the first case, the key is to be able to translate the foreign judicial requirement and understand how it applies under the local legislation, in order to obtain the end result. For the second case, one must identify quicker routes towards securing the assets, such as those provided by anti-money laundering legislation and regulations, while the appropriate legal proceedings are followed.
What is the most interesting case you have been a part of?
It was my very first asset recovery case, in which the fraudster who committed a Ponzi scheme invested the proceeds therefrom into another Ponzi scheme. This allowed us to recover, from the latter, 100 per cent of the amount defrauded.
Why did you decide to set up your own firm?
Specialisation, independence and the creation of value. Having been at large and medium-sized firms in the past, I opted for a boutique concept, which has allowed me and my team to cater to a group of select and sophisticated corporate and individual clients, who favour a personalised legal service completely aligned with their interests. This allows us to become strategic counsellors for both their business and litigation needs.
What advice would you give to someone looking to start their own firm?
Differentiation is crucial in a competitive environment. Surrounding yourself with highly skilled professionals, who complement your strengths and allow you to provide an integral legal service to clients, is key. There will be challenges along the way, but if you are determined and hardworking, success will come over time.
Alejandro Pignataro (LLM, Boston University, 2003), a partner at Lawgical, leads the asset tracing and recovery practice at the firm. He frequently serves as local counsel to receiverships and private counsel in multi-jurisdictional fraud cases. He is the local representative for ICC FraudNet.
What do you enjoy most about your work as a commercial fraud and asset tracing specialist?
Helping victims of fraud, insolvency or corruption is one of the most rewarding parts of asset recovery work.
I also enjoy working with interdisciplinary teams of experts (fellow counsel, private investigators, forensic accountants, etc) in different parts of the world.
Strategy plays a crucial role in this field of work, which implies navigating different legal systems, including civil and common law countries, and using the remedies available in each. This is where being a member of ICC FraudNet comes in extremely handy, as time is typically of the essence in these matters – and it provides a network of previously vetted, well-versed experts globally, who are ready to act 24 hours a day, 365 days a year.
In what ways is technology disrupting corruption and money laundering efforts?
Technology is both an ally and an enemy in the fight against corruption and money laundering. It is an ally as it serves to process large amounts of data swiftly, identify patterns through artificial intelligence and provide great tools for data mining. On the other hand, it also enables criminals via blockchain and cryptocurrencies, for example, to hide their ill-gotten proceeds, thus making it harder to trace and go after them.
How has covid-19 impacted asset recovery practice so far, and what do you think the long term ramifications of it will be?
The sanitary crisis and the state of emergency declared by many countries worldwide has had an impact on court systems – ranging from their suspension for days and weeks, to the evolution in the use of technology (videoconference hearings, for example) as a means to continue advancing court proceedings.
The downturn in the economy will certainly lead to a rise in the number of insolvency and bankruptcy litigation, corruption and fraud cases.
Looking ahead, given the boost that the pandemic is having on advancing the fourth industrial revolution towards a more virtual dynamic in most activities, it seems technology will have an even more important role in investigative and tracing efforts, as more online transactions will inevitably lead to more frequent and complex internet frauds.
What has been your most interesting case to date and why?
All cases in asset recovery are exciting, different and interesting in their own way.
One that I recall particularly well had to do with a fraudster who raised investor money to acquire certain assets, subsequently simulated giving them as collateral to a financial entity (with which it colluded), and had the financial entity foreclose on them for the fraudster to repurchase them thereafter, having ripped off the investors completely.
For this purpose, the fraudster put together a multilevel, multi-jurisdictional corporate structure that ended in Costa Rica.
Our work on the matter was limited to proving that the nominee shareholders were nothing more than that, yet it led to us revealing crucial information to the overall investigation.
How does Lawgical distinguish itself form competitors in the market?
At Lawgical, we take pride in three main traits that define and distinguish us from our competitors in the market: a personalised boutique-style service provided by senior counsel; specialisation in areas critical to our clients’ day-to day needs; and a level of independence that allows us to be well aligned with our clients’ interests and free from conflict.
What role do development agencies have in the improvement of asset recovery processes?
The role of development agencies is very important in, among other things, advancing transparency policies for legal vehicles via each country’s implementation of ultimate beneficial-owner registries (for example, in deterring money laundering); promoting uniform insolvency and bankruptcy legislation that allows businesses to turn around or wind up quicker, and thus protect value for their creditors; and sharing best practices among nations, as well as funding training programmes for their enforcement agencies.
Alejandro Pignataro is a leading light in the Central American market, highly proficient at representing clients in corporate and financial disputes across the region.
Alejandro Pignataro, LLM, is a partner at Lawgical (Costa Rica). His practice focuses on corporate M&A and asset tracing and recovery. He frequently serves as local counsel to foreign receiverships, liquidators, government agencies and private victims in asset tracing and recovery cases across several jurisdictions. He has been appointed as the Costa Rican member for ICC FraudNet, and he has participated as a host and a panellist at international asset tracing and recovery conferences.
Describe your career to date.
Over the course of the past 20-plus years I have served as local counsel to financial entities; local and multinational corporations; individual and institutional investors; international counsel and receiverships; and foreign government agencies, all doing business or litigating in the region. As a result, I have gained a broad legal and business understanding of my clients’ needs, allowing me to become their strategic partner. This has helped me to develop a strong team within the firm, and a broad network locally and internationally with both legal and business organisations that complement and boost my practice.
Working in different-sized firms that cater to a broad range of diverse clients has allowed me to better define what clients look for, thus enhancing my value proposition together with my team.
What do clients look for when selecting counsel for high-value litigation proceedings?
Trustworthy, resourceful, qualified counsel who will be able to provide an accurate assessment of the odds in the proceedings; strategise on both the legal and business aspects of the matter; and assemble and lead a team representing such clients
(ie, funders, expert witnesses, fellow counsel – corporate or otherwise – communications experts, etc).
On what matters have clients most frequently asked you for advice over the past year? What would you say is driving this?
Insolvency, breaches of contract, termination of foreign corporation representation and collections have been the focus of our litigation and arbitration work over the course of the past year, as a result of the Costa Rican local economy being decelerated by a major fiscal reform approved in 2018, which came into effect in 2019.
What are the benefits of the increase in third-party litigation funding in asset recovery cases for clients?
In matters where the victims have suffered a significant loss and no longer wish to put up more money to go after the perpetrators, or can no longer afford to, or where the defendant seems too powerful financially to pursue a litigation battle against, litigation funders have come to level the playing field in relation to such defendants.
The cross-border nature of the litigation and arbitration in which litigation funders are frequently involved also poses a hurdle for plaintiffs who were the victims of fraud, insolvency or corruption. Funders are usually highly resourceful and may also be of assistance in setting up the appropriate team of competent counsel and experts in the relevant jurisdictions.
What do globalisation and a more diverse global economy mean for lawyers and policymakers in the field of asset recovery?
Cross-border litigation will continue to increase, thus requiring counsel that are not only legally astute and business-savvy, but also well-connected through a strong network of specialised lawyers and other professionals worldwide who can help navigate the different jurisdictions in gathering evidence, securing assets, and pursuing the people and entities responsible.
In my particular case, ICC FraudNet has played a dominant role in the success of these types of matters.
Policymakers will need to ensure that international cooperation flows in an efficient manner, respecting due process and allowing for the parties and the authorities to act in a timely manner.
More frequent use of technology, and the speed that comes with it, will also pose a challenge as to which are the competent courts to hear a matter resulting from virtual activities and how to pursue virtual assets (eg, cryptocurrencies).
What are the greatest challenges currently facing litigators in Costa Rica?
The implementation of a new Civil Procedure Code, which came into effect in October 2018 and modified the procedural rules substantially by shortening deadlines. This implements immediacy in certain instances, as well as eliminating the appeal and leaving only the cassation recourse as an extraordinary means to challenge a verdict for high-quantum matters.
How do you see your practice developing over the next five years?
I foresee the growth and consolidation of my network with international counterparts. Technology also promises to play an important role in the practice of law; therefore, I also anticipate our firm innovating in the identification and implementation of IT solutions that will allow us to be more efficient and effective in our practice, and in our communication with our clients and other stakeholders.
What is the best piece of career advice you have ever received?
There is always room at the top for those who are willing to work harder, and who have higher ambitions, than the average person.