Opinion 04-127

December 2, 2004

Digest:         A judge may continue the judge’s investment in a 401K Profit Sharing Plan that was offered by the judge’s prior law firm and that is now managed by a successor law firm where the judge will not make additional contributions to the Plan; will have no involvement in managing the Plan; and will exercise recusal in any case where a party is represented by the law firm managing the Plan.

Rules:          22 NYCRR 100.4(D)(1) (b), (c); 100.4(D)(3); 100.4(D)(4).

Opinion:

         Immediately prior to assuming the bench, a newly-elected full-time judge was a member of a law firm and contributed to the firm’s 401K Profit Sharing Plan. The Plan now is managed by a successor law firm that was formed after the judge assumed the bench. The judge asks whether it is ethically permissible to continue the judge’s investment in the Plan. The judge indicates that he/she would exercise recusal in any case where a party is represented by the successor law firm.

         Pursuant to section 100.4(D)(1) of the Rules Governing Judicial Conduct, “[A} judge shall not engage in financial and business dealings that: (b) involve the judge with any business, organization or activity that ordinarily will come before the judge,

or (c) involve the judge in frequent transactions or continuing business relationships with those lawyers or other persons likely to come before the court on which the judge serves.” In addition, a judge is prohibited from serving “. . . as an officer, director, manager, general partner, advisor, employee or other active participant of any business entity.” 22 NYCRR 100.4(D)(3).

         It is the Committee’s view that the inquiring judge’s continued participation in the 401K Profit Sharing Plan will not violate these rules because the judge will not make any additional contributions to the Plan; will have no involvement in managing the Plan; and will exercise recusal in any case where a party is represented by the law firm that manages the Plan. If, however, the judge must exercise recusal on a regular basis because of the judge’s investment in the 401K Profit Sharing Plan, the judge must divest himself or herself of the investment as soon as the judge can do so without serious financial detriment. 22 NYCRR 100.4(D)(4).