By Erik Larson

Law360, New York (February 28, 2007, 12:00 AM ET) -- The U.S. Securities and Exchange Commission filed a securities fraud lawsuit on Wednesday against a former lawyer at McGuireWoods LLP, accusing the attorney of misusing clients’ restricted private placement shares through two companies he controlled.

The lawsuit, filed in the U.S. District Court for the Southern District of New York, targeted corporate attorney Louis W. Zehil, who was part of McGuireWoods’ private equity practice until he resigned earlier this month over the scandal.

The so-called PIPE transactions were allegedly handled through Zehil’s financial services companies, Strong...