Let's start this by introducing Bacchus, the Roman god of wine and intoxication (equated with the Greek Dionysus). According to Encyclopedia Mythica, "Bacchanalia," or orgies in honor of Dionysus, "were introduced in Rome around 200 BCE. These infamous celebrations, notorious for their sexual and criminal character, got so out of hand that they were forbidden by the Roman Senate in 186 BCE. Bacchus is also identified with the old-Italian god Liber."


Roughly 2,000 years later, Bacchus made an appearance in the courtroom of U.S. Judge William H. Pauley III of the Southern District of New York, or at least in Judge Pauley's opinion last week in the case of SEC v. Caledonian Bank. In that case, Judge Pauley wrote, two principals of a company called Verdmont Capital somehow interpreted an agreement under which the SEC agreed to cover the cost and expense of taking their depositions in London "to authorize a bacchanalian adventure." The dispute, the judge lamented, "reveals, yet again, that no application is too preposterous for a federal judge."

According to Judge Pauley, the SEC offered to make Vermont's travel arrangements, but Verdmont's counsel declined and claimed that Verdmont had "already made" their reservations. The SEC then noted that the "current government lodging rate for London [was] $322 a night including taxes," and that Verdmont's expenses would be limited to "reasonable commercial prices." Ominously, the court wrote, Verdmont then "went dark" ... until it was time to submit its statement of costs and expenses to the SEC for reimbursement.

And what a reimbursement request it was -- one that Judge Pauley wrote could "only be characterized as exquisite." Let's break it down here:

the two Verdmont principals and their counsel flew first class to London, at a round trip cost of approximately $6,000 per person;

Vermont booked two $700-per-night rooms at the five-star Lanesborough, where they also racked up over $1,000 in liquor and bar charges during the four-night stay;

the Verdmont principals sought reimbursement for an $85 bottle of 2012 Restless River Cabernet and a $100 bottle of Bierzo el Rapolao Perez; and

Vermont sought reimbursement for tickets it purchased to tour St. Paul's Cathedral.

"Exquisite," indeed, but it was from this point that the reimbursement request then truly ventured off into "uncharted territory" according to Judge Pauley. The two Verdmont principals also sought reimbursement for "a two-day jaunt to Madrid, where they recuperated from their undoubtedly strenuous depositions. There, they incurred another $1,500 in lodging and assorted beverages at the Hotel Orfila, and savored jamon iberico, and lomo alto de buey, a Spanish beef tenderloin, at Restaurante Oter."


Unsurprisingly, Judge Pauley did not approve Verdmont's request for reimbursement for any of this "bacchanalian adventure." Rather, he ruled, the SEC's obligation to reimburse Verdmont for the depositions in London was limited to the per diem authorized by the SEC for its own attorneys; a "reasonable commercial price" for airfare; and zero for the deponents' "junket" to Spain. "While no one could be faulted for enjoying the finer things Europe has to offer, Judge Pauley stated, "it is generally ill-advised to seek reimbursement from the public fisc."