• Andrew Cuomo may demand the return of $4 billion in bonuses paid by Merrill Lynch just before it was acquired by Bank of America. [BN]
• U.S. GDP shrank 3.8% in the fourth quarter, the most since 1982. [BN, NYT]
• Two senators have introduced legislation to regulate hedge funds. [NYT]
• A handful of ex-Merrill execs were victims of Bernie Madoff. [WSJ]
• More layoffs at Morgan and Goldman are in the works. [Dealbreaker]
• A silver lining to the recession (at least for non-lawyers): Corporate firms are dropping rates and looking at "alternative billing practices." [NYT]
• "Private equity is not dead," says Henry Kravis. Glad to hear it! [DB]

Who stands to make a fortune from the Bernie Madoff mess? The lawyers, of course. Just a few of the firms currently involved in one way or another: Proskauer Rose, which is advising dozens of former Madoff clients; Paul, Weiss which was retained by Madoff's sons, Mark and Andrew; Dechert, the firm defending Madoff pal Ezra Merkin; and Simpson Thacher, which is now advising Walter Noel's Fairfield Greenwich Group. [Bloomberg, previously]

Yesterday $50 billion thief Bernie Madoff won the right to stay home on house arrest. And the public might not even get the satisfaction of a trial; Bernie is reportedly seeking a plea deal.

Last month Cityfile unveiled, oh, a hundred or so domain names of famous New Yorkers' names that it had bought, just because it could. Conde Nast immediately marshaled its team of high-powered attorney warriors!

In four weeks, every single email and document the Bush administration created is required by law to be sent to the National Archives. They are scrambling to make sure that doesn't happen, obv.

The courts are doing everything possible to make this nasty legal situation comfortable for Hedge Fund Hustler Bernie Madoff, who after all only set billions of dollars on fire. Stay home and rest, Bernie:

Moments ago, U.S. Attorney General Michael Mukasey confirmed that he will be recusing himself from the ongoing investigation into Bernie Madoff. The Justice Department didn't specify a specific reason for his decision to step aside—early reports have suggested that Mukasey's son, Marc, may be planning to represent a defendant in the case. But we can report a much more likely—and personal—reason why the Madoff case poses a serious conflict for the AG. Mukasey's own synagogue was ripped off by Bernie Madoff's Ponzi scheme.

The liberal portion of the Supreme Court says that average jerks can sue cigarette companies for fraudulently marketing their light cigarettes—which kill you—as safe. Conservatives say no, just shut up and die. Really!

A "landmark" court ruling in the UK means that it is now legal to make jokes there (without having to pay millions in defamation damages). Jokes about Elton John, especially.

Michael Sneed is a local gossip columnist for the Chicago Sun-Times. And she's the latest journalist to be steamrolled by Chicago's US attorney, Patrick Fitzgerald—the same prosecutor who sent fallen Times reporter Judy Miller to jail! But Sneed won't have to go to court to try to keep her sources secret, because they're named right in the complaint against corrupt governor Rod Blagojevich. You see, Sneed was allegedly the guv's go-to reporter for planting fake rumors designed to help his scheme to extort money in exchange for Obama's replacement in the Senate. Oh, this one is good.

Donald Trump is currently getting sued by Deustche Bank for refusing to pay $40 million on a loan that he personally guaranteed. He's probably having some (relative) money troubles. But none of this is his fault! Which is why he is countersuing the bank for $3 billion. It's really the least they can do to make up for their wanton persecution of Donald Trump:

Senator Hillary Clinton is forbidden from being the nation's Secretary of State—by the Constitution! All the hope in the world can't get around that little document, you monster. Here's the Constitutional bit in question, Article I, Section 6:

The advertising industry still has a race problem; namely, that it's run by white people, and it employs mostly white people, even though it sells to the whole wondrous rainbow of consumers. And the whole industry may soon be sued for being too white! Adweek lays out the scope of the problem in a long story this week. For example, at Interpublic Group, which owns nearly 100 ad agencies, only two are owned by black people. One of whom is Steve Stoute, who secretly sells gum with pop music. Minorities, reasonably, would like to be represented by more people than just Steve Stoute. This quote poetically sums up the outrage:

In what is sure to be the most consequential piece of legal maneuvering since 50 Cent sued Taco Bell last week, idiot Guns n' Roses frontman Axl Rose had his attorney fire off a scathing letter to the Dr. Pepper corporation regarding the company's recent GnR-related marketing mishaps. It promises to be quite a dustup—rock and roll style!!1! Take, heed, soft drink companies: here's what happens when you try to give out a free soda to everyone in America:

This past summer, the Evil Food Conglomerates of America agreed to "limit" advertising that "targeted children," though their definition of that is loose enough to keep selling a lot of Pop-Tarts to 13-year-olds. They did this to try to preclude some kind of rule that would outlaw their advertising to children altogether. Unfortunately for the Hamburglar, a new study is out that has people actually talking about banning youth-targeted fast food ads, which would really be an incredible thing. "No fatties," the study proclaims:

Remember Elizabeth Wurtzel, the author of Prozac Nation who went back to law school, landed a job at David Boies' powerhouse firm, Boies, Schiller & Flexner, and soon found herself smack-dab in the middle of the messy sale of Wachovia to Wells Fargo? Well, it turns out Wurtzel didn't pass the bar exam last summer. (That might explain why she describes herself as a "part-time" employee at Boies' firm, and why it doesn't include her in its staff directory.) But Wurtzel appears pretty non-plussed about the fuss: "I guess when I should have been studying, I was kind of having a good time." [NYO]

Earlier today we told you how oft-sued American Apparel chief Dov Charney is being sued again—this time by Roberto Hernandez, an ex-AA employee who says he was fired from his IT job in 2006 after he refused Dov Charney's request to cook the books to make the company look more financially attractive. His complaint also includes descriptions of AA as a pervy workplace where Charney held staff meetings in the nude. But there's a new development: a source at AA has just sent us a statement that they say Hernandez himself wrote in August, 2006 defending Dov Charney from an earlier lawsuit, contradicting some of same allegations that Hernandez himself is now making: According to our source, Hernandez wrote this statement in 2006—just three months before he was fired—to counter the allegations of Mary Nelson, who sued Dov claiming sexual harassment. Hernandez defends the work environment at AA:

Elizabeth Wurtzel made a name for herself in the 1990s as the author of Prozac Nation and Bitch: In Praise of Difficult Women, and resurfaced in the aftermath of the Sept. 11th for controversial comments she made about the attacks. ("It was a most amazing sight in terms of sheer elegance... It was just beautiful.") Wurtzel is back in the news: She graduated Yale Law School last year, took a job as an associate at David Boies' powerhouse law firm, Schiller & Flexner, and is now working on the sale of Wachovia to Wells Fargo. [WSJ/Law Blog]

Lawyers at the firm Weil Gotshal will make as much as $950 an hour to work on the Lehman Brothers bankruptcy, the largest in U.S. history. The total bill for lawyers from three dozen different firms, hundreds of accountants, and countless financial advisers? Possibly as high as $1 billion. [Bloomberg via DB]

A photographer in California says Keanu Reeves ran him over with his car last year, and he's suing the dull celebrity for damages. But the paparazzo's lawyer is asking the judge to keep the words "paparazzo" and "paparazzi" out of the trial, because he claims they're prejudicial. It's an interesting philosophical question: is it prejudicial to call someone a "soulless celebrity bloodsucker" if they are in fact that very thing? Probably not any moreso than calling Keanu Reeves a "mumbling stone-faced subhuman who couldn't be more comically unsuited for his chosen profession." [LAT]