NSO Group builds spyware that authoritarian regimes love. After Washington Post journalist Jamal Khashoggi was assassinated in the Saudi consulate, NSO’s CEO publicly declared, “We had nothing to do with this horrible murder.” However, leaked data and forensic analysis revealed that NSO’s products seem to have quite a bit to do with this horrible murder. No one at NSO set out to murder a journalist, but when you provide authoritarian regimes technology to spy on their dissidents… natural and logical consequences.
Blood money can be as green as any other money, but investments have a tendency to take a hit when the company gets featured in Amnesty International reports. If there’s a risk your investment might end up knee deep in an assassination, that’s information that such a fund might arguably find… material?
Those same funds may have concerns about foreign bribes or international gambling sites with covert ownership.
One fund invested in such iffy companies under the management of Novalpina Capital Partners and it gave rise to a whole mess of foreign legal actions. But cutting across all the suits, the fund claims Novalpina misled it about the nature of these transactions and ultimately caused big losses while Novalpina claims it’s owed a bunch of money. But of particular interest to the American Biglaw audience is a 28 U.S.C. § 1782 petition seeking domestic discovery for use in a foreign proceeding filed in the S.D.N.Y.:
Weil, and particularly Gerhard Schmidt, co-managing partner of Weil’s German offices, was the Fund’s key legal advisor when under Novalpina GP’s control, including for all major acquisitions undertaken by the Fund (including NSO, LXO and Maxbet)….
Accordingly, Weil was responsible for conducting due diligence, negotiating, financing assistance, drafting transaction documentation, and supporting NCL in the management of Fund investments…. Schmidt managed the Fund’s investments by acting as a director in various Novalpina and Fund entities, and was one of the directors responsible for the Fund’s governance of NSO.
The fund wants the firm to produce a wide array of firm documents. Or, as the case may more realistically be, a privilege log listing a bunch of documents Weil won’t hand over. That said, the petition claims its requests primarily target “correspondence Weil had with third parties, or documents provided to Weil by third parties.” Weil isn’t a party to the lawsuit so they aren’t being accused of wrongdoing, but there’s a point where technically accurate analysis can open the door to client whitewashing. NSO was described as having “best in class” governance and compliance. In the class of spyware manufacturers… maybe that’s not a high bar? The petition claims they already have documents showing Weil involved removing references to a controversial Russian business figure’s ownership stake in a gambling site… where’s the materiality line on that?
We reached out to Weil about this matter but they did not respond. Which is understandable… it’s ongoing litigation.
This isn’t even the only 1782 petition in the matter, with Novalpina targeting the fund’s American-based current investment advisor as well as the Oregon Public Employees Retirement System, the fund’s largest investor.
You know who probably doesn’t like finding out their money is aiding in assassinations? Public pension funds!
But this all highlights the delicate game of telephone driving private equity. Pension funds rely on the say-so of the funds, who rely on the investment managers, who rely on the due diligence of law firms. It’s a legal version of human centipede, with each link more potentially obscured than the last, and you’re just trusting whatever comes out the other end.
Adding to the lunacy surrounding this case, the 1782 petition was submitted by Stone Hilton, the law firm you probably most remember connect with the words, “violently anally raped by a cylindrical asteroid in front of my wife and children,” because that’s what the co-founder of Stone Hilton allegedly said he hoped to do to the First Assistant Attorney General of Texas.
2025 has been a wild year.
(Check out the 1782 motion on the next page…)
Joe Patrice is a senior editor at Above the Law and co-host of Thinking Like A Lawyer. Feel free to email any tips, questions, or comments. Follow him on Twitter or Bluesky if you’re interested in law, politics, and a healthy dose of college sports news. Joe also serves as a Managing Director at RPN Executive Search.
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