Gerhard Schmidt, a prominent partner at the international law firm Weil Gotshal & Manges, is facing intense scrutiny over a €5 million investment linked to the notorious spyware manufacturer, NSO Group. Schmidt, who is also the co-managing partner of the firm’s German offices, made this significant investment in 2017 through Novalpina Capital, a private equity group he chaired, according to investigations by the Financial Times.

Novalpina Capital is known for its acquisition of the Israel-based NSO Group, a company that has been globally criticized for its development of Pegasus spyware. Reports suggest that this technology has been used by some regimes to monitor human rights activists, journalists, and political dissidents covertly.

In 2021, complications escalated as Novalpina faced financial challenges, leading to disputes among its founders—Stephen Peel, Stefan Kowski, and Bastian Lueken. These disputes have since culminated in litigation in Luxembourg, with additional legal proceedings in New York seeking information from Weil Gotshal regarding their involvement.

Documents from these court cases reveal that Schmidt not only advised on the NSO deal but also served on the board of the holding company overseeing NSO's operations. The situation took a darker turn after the U.S. Commerce Department blacklisted NSO in November 2021, citing the misuse of Pegasus for "transnational repression."

A particularly controversial decision was the reinstatement of Saudi Arabia's access to Pegasus following the pause after journalist Jamal Khashoggi’s murder in 2018. Schmidt was reportedly among the board members who voted in favor of this decision. Despite the reinstatement happening by mid-2019, it has stirred significant ethical and legal debates.

In light of these controversies, Schmidt is set to retire from Weil at the end of the year, with the firm already taking steps to restructure its German leadership team. NSO, on its part, maintains that it adheres to all legal standards, insisting that its technologies are sold strictly to vetted intelligence and law enforcement agencies.

This unfolding scandal not only casts a shadow over Schmidt's illustrious career but also raises serious questions about the ethical implications of legal advisories in high-stakes international investments involving surveillance technologies. As the legal battles continue, the international community watches closely, awaiting further revelations and their broader implications on privacy and human rights.