Thursday, March 31, 2005

White Collar Sentencing Abroad

The United States is not the only one issuing stiff sentences for white collar offenders.  Abroad, in Paris, an appeals court  increased a prison sentence of a former official at oil company Elf Aquitaine (now Total) convicted in a "massive corruption scandal"  The sentence was initially four years and the court increased it to seven.  There was also a fine of 2 million euros.   It remains to be seen what the high court in France will do with this sentence. (For more see AP story here).

(esp)

March 31, 2005 in International | Permalink

West Coast Wire Fraud Conviction

Not everything is happening in AG Spitzer's territory.  One can easily find prosecutions and investigations on the West Coast.  For example, yesterday after a five hour deliberation, Matthew Hattabaugh was convicted of twelve counts of wire fraud by a federal jury. Mr. Hattabaugh was convicted based upon an indictment that alleged he "schemed to defraud prospective investors by falsely representing that he owned a bank called Pacific American Capital Corporation in Oakland."

According to a press release of the U.S. Attorney's Office in Northern District of California,  " Mr. Hattabaugh secured promises to invest over $4.5 million in his fraudulent bank.  Only after investors wired over $650,000 to Mr. Hattabaugh's account, did one person detect the fraud and contact the Federal Bureau of Investigation."

(esp)

March 31, 2005 in Fraud | Permalink

AIG Stops to Take a Breath

With all the recent news concerning AIG, it was not surprising for them to issue a statement on Wed. saying --hold on -- we need a little time to regroup.

The company issued a public statement saying:

"American International Group, Inc. ("AIG") announced today that the filing of its 2004 Form 10-K will be delayed beyond the March 31, 2005 extended due date in order to provide AIG, its Board of Directors and its new management adequate time to complete their extensive review of AIG's books and records."

The company further states that "[i]n view of its continuing review, management has not yet completed its assessment of the effectiveness of AIG's internal control over financial reporting as of December 31, 2004. The assessment will be made prior to the filing of AIG's Form 10-K."

Although the statement is understandably tentative on some issues, namely those still needing closer internal scrutiny, it is forthcoming on other points. Immediately prior to a list of transactions is the following statement:

"The continuing review has led AIG management to conclude that the accounting for certain of these matters may need to be recharacterized or otherwise adjusted. Certain but not all of the original characterizations resulted from transactions which appear to have been structured for the sole or primary purpose of accomplishing a desired accounting result."

(esp)

March 31, 2005 in Investigations | Permalink | TrackBack (0)

What Was Andersen's Role in WorldCom's Problems?

What exactly was Arthur Andersen's role in the problems of WorldCom? The answer to this question may be forthcoming as civil litigants are proceeding against  Andersen for an alleged failure to question issues at WorldCom. According to the Wall Street Journal, "Andersen denies that it failed in its responsibility to audit WorldCom's books properly from April 1999 through June 2002, and says it was defrauded, along with investors." Looking at this statement in light of the recent conviction of Bernard Ebbers, former CEO of WorldCom, one has to wonder several things:  Was the CEO manipulating the accountants?  Were the accountants failing to provide information to the CEO of what underlings were doing in the company? Were the accountants failing to provide sufficient transparency to the outside world of what was happening at the company? 

The bottom line is that there is a problem somewhere, and someone is going to have to take the blame.

(esp).

March 31, 2005 in WorldCom | Permalink

Wednesday, March 30, 2005

Another Witness Down in Scrushy Trial

The defense completed their cross-examination of witness Smith, a former finance administrator at HealthSouth, by placing his credibility at issue.  And the question being raised continues - did Scrushy know of fraud going on in the company or did he not?  And to what extent, if any, was he involved?  And can the witnesses who are testifying be trusted? 

Smith appears to have received the benefit in a lighter sentence by agreeing to testify against Scrushy.  See more in the Wall Street Journal here.

(esp)

March 30, 2005 in HealthSouth | Permalink

Another Shoe Drops on AIG

Things may get much worse for American International Group Inc. with the revelation by its lawyers that false information was provided to state insurance regulators concerning at least one reinsurance contract.  A Wall Street Journal article (here) states that AIG's lawyers disclosed that intentionally false statements were made during an examination of the company this year, and that past regulatory and securities filings were misleading.  Unfortunately for AIG, a lied is rarely told only once, and misleading disclosures are usually the result of accumulated transactions that move from aggressive to questionable to fraudulent.  The New York State Insurance Department had adopted a CEO certification requirement, similar to the one imposed by the Sarbanes-Oxley Act on CEOs and CFOs for financial statements, in response to AIG's conduct (see New York Times story here). (ph)

March 30, 2005 in Investigations, Securities | Permalink | TrackBack (0)

First Circuit Standard for Booker Remand on Downward Departure

The First Circuit's opinion in United States v. Heldeman (No. 04-1915) (circuit website here) adopts a low threshold for the Court of Appeals to remand for resentencing when the defendant claims the district court might have granted a downward departure but for the mandatory nature of the Sentencing Guidelines.  Dr. Marvin Heldeman was convicted of conspiracy, health care fraud, and drug distribution for writing prescriptions for steroids and Oxycodone for patients he had never seen; his business card listed him as "Dr. Marvin, The Bodybuilder's Friend" -- no hiding the ball there.  Heldeman sought a downward departure on a number of grounds, including his advanced age (72), medical problems, and that his unlawful activities were an exception to an otherwise legal medical practice (no mention here of the business card).  The district judge found these to be "legitimate" and "somewhat mitigating" but denied the departure because they were discouraged factors and insufficient to take him outside the "heartland" of the Guidelines.  In remanding for resentencing, the First Circuit addressed the threshold showing to send the case back to the district court for reconsideration of a downward departure:

[W]e are inclined not to be overly demanding as to proof of probability where, either in the existing record or by plausible proffer, there is reasonable indication that the district judge might well have reached a different result under advisory guidelines. After all, it will be easy enough for the district judge on remand to say no with a minimum expenditure of effort if the sentence imposed under the pre-Booker guidelines regime is also the one that the judge would have imposed under the more relaxed post-Booker framework.

Does a "plausible proffer" mean that a decent argument that the district court might have granted a downward departure is sufficient, even without any reference by the district court about its inclination to grant a departure?  If so, then the issue for appellate counsel is really one of presenting the grounds for a possible departure and persuading the Court of Appeals that it is a case that is at least strong enough to get another chance. (ph)

March 30, 2005 in Sentencing | Permalink | TrackBack (1)

Buffett's Defense Begins

In a rare response to press reports (including a front page article in the Wall Street Journal here), Berkshire Hathaway, parent company of General Re, issued a rather terse press release (here) disclaiming any involvement of its CEO, Warren Buffett, in the $500 million reinsurance transaction between General Re and American International Group Inc. that triggered the downfall of AIG CEO Maurice Greenberg.  The press release states: "It was reported that Mr. Buffett was briefed on the 'nature' and 'structure' of the 2000-2001 reserve transactions between Gen Re and AIG. To the contrary, Mr. Buffett was not briefed on how the transactions were to be structured or on any improper use or purpose of the transactions." 

Buffett is scheduled to be interviewed by investigators from the SEC and N.Y. Attorney General Eliot Spitzer's office on April 11, the day before Greenberg is scheduled to be deposed under oath.  Unlike the testimony of Greenberg, at this point the meeting with Buffett will only be an interview, not an on-the-record proceeding.  That usually indicates the investigators view the person as a witness in the case and not a subject or target, although that can certainly change down the road.  Buffett cannot be happy with all the publicity swirling around Berkshire Hathaway, which has a number of subsidiaries and investments of whichGeneral Re is only a fairly small part, and I doubt there's much love lost between him and Greenberg at this point. (ph)

March 30, 2005 in Investigations, Securities | Permalink | TrackBack (0)

30 Year Sentence for Frauduldent Scheme

John Henoud received a 360 month term of  imprisonment for his conviction last May for running fraudulent charity drives.  According to a press release issued by the U.S. Attorney's Office, Henoud and his coconspirators took funds that had been solicited for the"Youth At Risk Foundation" from hundreds of individuals and businesses, and laundered the funds threw a pawn shop.  Perhaps the most sensational charge against Henoud involved him soliciting funds for the family of a person killed in the Sept. 11 attacks who he claimed was his cousin (there was no family relationship), and Henoud simply keeping the money for himself (See Virginian-Pilot story here on Henoud's conviction in May 2004).  The total loss from his activities was approximately $358,000, so a thirty-year prison term is well beyond what the Federal Sentencing Guidelines call for, even considering the fraudulent charity claims.  This is the longest prison term for a non-recidivist fraud conviction I have seen. (ph)

                                                                                       

UPDATE (3/30): I have received additional information about the sentencing of Mr. Henoud showing that his sentence was within the Guidelines range.  The press release from the U.S. Attorney's Office does not mention that he has five prior convictions and was on probation for a wire fraud conviction at the time of the offenses in the current case -- hence, he's quite a recidivist.  Also, while the actual loss was approximately $358,000, the intended loss under the Guidelines was significantly higher, thereby pulling the sentence up even further.  Copies of the government's Sentencing Memoranda that provide additional information on the basis for the sentence are available here: Download HenoudSe.pdf  and Download HenoudSE2.pdf . (ph)

March 30, 2005 in Fraud, Sentencing | Permalink | TrackBack (0)

More Corruption in Connecticut?

Norm Pattis has an interesting entry on the Crime & Federalism blog  (here) discussing an investigation of an Assistant State's Attorney in Connecticut, which just saw its former governor (John Rowland) sentenced to one year after pleading guilty to receiving unlawful gratuities.  Norm writes: "Now comes news that a prosecutor may not have been able to avoid all the fun. Supervisory Assistant State's Attorney David Newman of New Haven is under the microscope, according to the Chief State's Attorney's Office. Suspicions that all is not well in the historic Elm Street courthouse. According to the New Haven Register, questions have arisen about whether Mr. Newman regards himself as a legitimate beneficiary of charitable contributions intended to resolve minor offenses." (ph)

March 30, 2005 in Corruption | Permalink | TrackBack (0)

Tuesday, March 29, 2005

Is AIG the Next . . . ?

With all the turmoil swirling around American International Group Inc., I wonder whether the company will become the new poster-child for corporate misconduct.  An insurance company is built on trust, that the money given to them today (the float, as Warren Buffett discusses ad nauseam in his letters to shareholders of Berkshire Hathaway) will be invested wisely to pay off claims made in the future.  At the moment at least, AIG has a triple A credit rating, but that can change in a hurry if damaging revelations of earnings manipulation take a turn toward falsified records or fraudulent reinsurance transactions designed to cover up potentially significant losses.

I hate to use the E word -- Enron -- but that company's energy trading division, which was its primary business unit, was also built on the trust of other market participants, and once serious questions about its survival arose, other companies simply refused to do business with it.  On the Enron theme, another scary similarity for the two companies is their use of questionable off-shore entities to enhance their balance sheets: SPEs for Enron, and possibly captive reinsurers for AIG.  The reinsurance companies that did business with AIG are located in "lightly regulated" jurisdictions, like Bermuda and the Cayman Islands, for reasons other than the nice weather and great beaches.  A disturbing note in a Wall Street Journal story about former AIG CEO Maurice Greenberg (here) is that he refused to turn over documents related to two off-shore entities in which he has substantial involvement.  The inquiry into the off-shore entities is a definite wild card for AIG, and it is hard to predict what will be revealed.

Is AIG going to end up like Enron?  I doubt it, because Enron (and WorldCom) had flawed business models, and at this point there does not appear to be the same problem at AIG.  A different parallel may be to HealthSouth, at least as that company has been portrayed by the government in the prosecution of Richard Scrushy with its cabal of senior executives manipulating the books every quarter for years.  A third senior AIG executive, Michael Murphy, has not been cooperative in the company's internal investigation, and another Wall Street Journal story (here) portrays his deep involvement in Bermudan tax and reinsurance affairs for both the company and Bermuda.  If Murphy asserts the Fifth Amendment -- and he's definitely a candidate for it -- then he will be the third senior executive to refuse to cooperate.  If more AIG executives refuse to cooperate with investigators, it begins to look like there was significant involvement among the top levels of the company in criminal conduct.  If there is a plea agreement involving a senior AIG executive, that will likely mark a significant turning point in the investigation and increase the pressure on the company.

What are the potential problems that could threaten the company in the near future?  Here are two possibilities: first, if there is evidence of document destruction or falsified records, then the case turns from an accounting inquiry into an obstruction of justice case.  While the Arthur Andersen effect -- the destruction of a viable business by a criminal conviction -- is one that will slow down prosecutors in deciding to charge the company, AIG already has one criminal strike against it from its plea deal last December (earlier post here).  Prosecutors are already wary of the company, and a lack of cooperation by senior executives coupled with any possible document destruction might push it toward a criminal indictment. Second, insurance companies have to be licensed in every state (and the District of Columbia) in which they operate, so AIG is subject to as many as 51 state regulators.  Insurance commissioners and state AGs beyond just N.Y. Attorney General Eliot Spitzer may take action against the company, and losing its license in a significant number of states could affect its domestic operations.  Add to that potential foreign regulatory actions, and AIG could be subject to the proverbial thousand cuts. 

AIG is an important company, not only in the insurance market but also for investors.  It is one of the thirty companies in the Dow Jones Industrial Average, and the gyration of its stock (it is down over 20% since the first set of subpoenas came to light in February) affects a significant number of investors.  If the investigations are limited to more technical accounting matters, involving such interesting topics as whether to consolidate the results of a subsidiary on the parent's financial statements and the proper accounting for reinsurance contracts, then I think AIG will come through without too much damage.  If the case turns into one involving fraudulent transactions and bogus agreements, the effect will be much greater.  If there is obstruction of justice, than in another future case the question will be whether a company is "the next AIG." (ph)

March 29, 2005 in Investigations, Securities | Permalink | TrackBack (0)

SEC Sues Former IMPATH Inc. Officers for Fraudulent Accounting

The SEC filed a securities fraud lawsuit alleging accounting fraud and self-dealing against seven former top executives at IMPATH, Inc., a company that provided diagnostic and laboratory services for cancer treatments before it filed for bankruptcy in 2003 (complaint here).  Among the seven former executives named as defendants are Anuradha Saad, former CEO and chairman of the board, Richard Adelson, former president, and David Cammarata, former CFO.  The SEC Litigation Release states:

As a result of the accounting fraud, Impath falsely reported multimillion dollar profits when it had actually suffered huge losses. To meet financial projections and boost Impath's stock price, the defendants made, or directed others to make, phony accounting entries that artificially increased revenue and improperly reduced operating expenses . . . While the accounting fraud was occurring, Saad, Adelson and Cammarata also engaged in undisclosed self-dealing. Not only did they exercise stock options and sell Impath stock during the fraud, they used over $850,000 in corporate funds to pay for option exercises without obtaining board approval or making the required proxy statement disclosures. Saad also used corporate funds to pay for other personal expenses without the requisite approval or disclosure, including vacations, country club dues and artwork.

One defendant settled the suit, disgorging a $100,000 bonus he received as a result of the company meeting certain financial goals, and a $150,000 civil penalty. (ph)

                                                                                             

UPDATE (3/30): The New York Times reports (here) that Saad and Adelson were indicted on conspiracy and securities fraud charges, and four other executives have pleaded guilty to charges arising from the accounting fraud at the company.

March 29, 2005 in Civil Enforcement, Securities | Permalink | TrackBack (0)

Scrushy Trial Starts Up Again

After a one week hiatus, the trial of Richard Scrushy has resumed.  After the fifth of the Guilty CFOs, Weston Smith, completed his direct testimony on Monday, March 21, the court cancelled Tuesday's session because of a juror's illness, and a planned recess for the rest of the week started a day early.  The sick juror has now been dismissed, and the cross-examination of Smith by Scrushy's lead trial counsel, James Parkman, took on what appears to be the usual line of attack questioning the veracity (and sincerity) of the witness.  An AP report (here) quotes Parkman as asking Smith "There weren't any tears coming out of your eyes, were there?" with regard to his breaking down during the direct examination.  Another interest tact was questioning Smith about his assertion of the Fifth Amendment 86 times during testimony in the SEC's request for a freeze on Scrushy's assets, a proceeding in which Scrushy also asserted the Fifth Amendment.  Will the judge permit a similar line of questioning to Scrushy if he chooses to testify?  With the trial moving in fits and starts, it will be interesting to see if the government tries to wrap up its case quickly now that it doesn't have any more Guilty CFOs to call as witnesses. (ph)

March 29, 2005 in HealthSouth | Permalink | TrackBack (0)

Monday, March 28, 2005

Lawyers Everywhere at AIG

The SEC has launched another set of subpoenas to twelve American International Group Inc. executives, on top of the scheduled deposition of former CEO Maurice Greenberg set for April 12, as part of an ever-expanding probe of the multinational insurance company.  In addition, another senior executive with close ties to Greenberg, Michael Murphy, apparently has been forced out of the company, and will likely be among those the various agencies investigating the company will seek to depose, assuming he does not assert the Fifth Amendment as two other executives have indicated they will (earlier post here). 

With the subpoenas flying around and the impending March 31 deadline to file its delayed annual report, AIG has retained law firms to conduct the internal investigation (Paul Weiss) and to advise the independent directors (Simpson Thacher).  The individual officers (both current and former) will most likely have their own separate counsel for any SEC depositions or interviews with state and federal investigators (civil and criminal), and some may assert the Fifth Amendment or work out plea/settlement agreements. Greenberg is being advised by Robert Morvillo, and Murphy's attorney is Sean O'Shea, both well-known in the white collar criminal defense area.  I suspect that at some point the halls of AIG will have more lawyers than you care to think about, and just imagine the hourly costs; the quote from Richard II should start popping up very soon. The Wall Street Journal has a story (here) about the continuing investigation. (ph)

                                                                                  

UPDATE (3/28): Former CEO Maurice Greenberg announced that he will be resigning in the next few days as non-executive chairman of AIG, according to a Wall Street Journal report (here).

March 28, 2005 in Investigations, Securities | Permalink | TrackBack (0)

Statute of Limitations May Not Be Suspended for Evidence-Gathering in Foreign Countries When Application Made After Evidence Received

One aspect of international white collar crime investigations that is problematic for the government is the delay in gathering evidence from outside the United States, which can be a laborious process.  A federal statute, 18 U.S.C. Sec. 3292, permits a district court to suspend the running of the statute of limitations by up to three years to permit the government to gather evidence in a foreign country for a grand jury investigation.  In United States v. Atiyeh [here, argued on appeal by Peter Goldberger], the Third Circuit confronted the problem of a district court granting such an extension when the the government filed for it after it had obtained the evidence from the foreign governments, when the counts in the indictment were outside the five year statute of limitations otherwise.  The government obtained its information in the prosecution of the defendant for running an off-shore betting operation from Canada and Antigua at least two months before it filed is application to extend the statute of limitations, and asserted that the extension could be filed for any case involving the collection of evidence from a foreign country.  The Third Circuit rejected that position, holding that

The Government argues that it needs additional time to sift through and examine the foreign evidence. There is no provision in the statute giving the Government extra time. To the contrary, 18 U.S.C. § 3292(b) is explicit in providing that the "period of suspension . . . end on the date on which the foreign court or authority takes final action on the request." 18 U.S.C. § 3292(b). The legislative history confirms that Congress was concerned only with the prejudice the Government suffers when it must obtain foreign evidence; it was not concerned with the delays attendant to sifting through such evidence.

As the Third Circuit acknowledged, its position conflicts with the Ninth Circuit's decision in United States v. Miller, 830 F.2d 1073 (9th Cir. 1987), but the court stated that "we are not persuaded by [Miller's] analysis." (ph)

March 28, 2005 in International, Judicial Opinions | Permalink | TrackBack (0)

Ex-Prosecutors Landing As Chief Compliance Officers

An article in Corporate Counsel (available at Law.Com here) discusses how some of the leading insurance companies that are being investigated by Eliot Spitzer and the SEC have hired former prosecutors to lead their compliance efforts.  Even higher up the ladder, Marsh & McLennan promoted a former supervisor of Spitzer in the New York Attorney General's office, Michael Cherkasky, to CEO after Spitzer indicted there would not be a settlement so long as Jeffrey Greenberg -- son of former AIG CEO Maurice Greenberg -- remained in a management position.  There's nothing really new about former prosecutors "switching sides" and taking on a defense role, although the number who have moved into corporate positions rather than law firms may well be higher than it has been in the past.  The ability to get a telephone call returned promptly, a meeting arranged, and the credibility to make a commitment to a prosecutor's office that will be carried through may well be the most important things former prosecutors have to sell in the legal market. (ph)

March 28, 2005 in Defense Counsel | Permalink | TrackBack (0)

Sunday, March 27, 2005

White Collar Crime - International

White Collar Crime is not unique to the United States.  A new paper is listed on SSRN, although the abstract is all that now appears.  The paper by Amarjeet Sinth, discusses white collar crime in the context of Singapore.  The abstract states that the piece examines "the lack of comprehensive statistical data and the dearth of documented material on such crimes." 

This same problem is true to the United States. Although much has been written about white collar crime in the United States, the reporting systems do not categorize crime this way and the amorphous definition of the word can present problems in deciding what is included and what is not.  Perhaps this is a universal problem.

(esp)

March 27, 2005 in Scholarship | Permalink

Saturday, March 26, 2005

Is the Fuse Burning Down at AIG?

Things just seem to get worse by the week at American International Group Inc.  After long-time CEO Maurice Greenberg resigned last week because of the multi-agency investigation of an AIG-General Re reinsurance contract that has all the hallmarks of accounting window dressing rather than a real economic exchange, two senior executives -- one the (now former) CFO -- informed the company and investigators that they would assert their Fifth Amendment privilege (previous post here).  Now comes word that the internal investigation by the audit committee (thank you, Sarbanes-Oxley) has turned up more questionable reinsurance contracts with what appear to be captive off-shore reinsurers that could lead to a restatement of the last five years of AIG's financial statements, with the total adjustments up to $1 billion.  A New York Times article (here) discusses the AIG board's consideration of removing Greenberg from his position as non-executive chairman, even though he remains the company's largest individual shareholder and, in an odd arrangement, controls compensation for a number of senior executives through two off-shore companies.  This is the type of torture by weekly revelation that we've seen before, and investors (along with the board and government agencies) must be wondering what will turn up next. 

AIG postponed filing its annual report (10-K) with the SEC until March 31, and with a potential restatement looming, the company's auditors (PricewaterhouseCoopers) may be hesitant to sign off on this year's financials and certify that they were prepared in accordance with GAAP and GAAS.  Moreover, the new CEO (Martin Sullivan) and CFO (Steven Bensinger) will also have to certify those financials (thank you again, Sarbanes-Oxley), and that AIG's internal controls are sufficient.  Would you want to hold the pen over that piece of paper?  With each new revelation, the pressure on Greenberg to assert the Fifth Amendment at his deposition -- currently scheduled for April 12 -- will grow because his counsel will have to be leery about whether additional problems will be revealed that could make Greenberg look worse than uncooperative -- i.e. perjury.  His testimony will be under oath, so it's not a Section 1001 case any more. (ph)

March 26, 2005 in Fraud, Investigations, Securities | Permalink | TrackBack (0)

Wal-Mart Vice-Chairman Resigns Over Expense Account Irregularities

Thomas Coughlin, vice-chairman of Wal-Mart and one of the last remaining executives and board members from the reign of company founder Sam Walton, was forced to resign because of problems regarding the reimbursement of expenses.  The company filed an 8-K (here) with the SEC stating:

The Company’s request for Mr. Coughlin’s resignation arose from a disagreement between Mr. Coughlin and the Company concerning the results of a recent internal investigation into the alleged unauthorized use of corporate-owned gift cards and personal reimbursements that appear to have been obtained from the Company through the reporting of false information on third-party invoices and Company expense reports. The amount in controversy is estimated to be in the range of $100,000 to $500,000.

Based on the results of the Company’s internal investigation, including Mr. Coughlin’s response to questions concerning his knowledge of certain transactions, the Company promptly reported the results of its investigation to the United States Attorney for the Western District of Arkansas and requested that all appropriate action be taken with respect to the reported matters. The Company thereafter provided the results of its investigation to federal officials and is cooperating with them in connection with their further review of these matters.

Coughlin's 2004 salary was just under $1 million, he received a large block of stock options, and just last month sold 45,000 shares of Wal-Mart for gross proceeds of $2.3 million (Form 4 here); he still owns approximately 346,000 shares (with a value over $17 million).  Why would anyone risk their career over such a comparatively small amount (less than $500,000)? (ph)

March 26, 2005 in Investigations | Permalink | TrackBack (1)

Quattrone Challenges NASD's Permanent Bar

Frank Quattrone, who was convicted last year of obstruction of justice (the case is currently on appeal to the Second Circuit), is challenging the permanent bar on associating with any broker-dealer imposed by the NASD.  The basis for the NASD's disciplinary action is that Quattrone invoked his Fifth Amendment right and refuse to testify in the NASD's investigation while the federal grand jury investigation was proceeding.  Quattrone argues that the NASD, which was conducting a joint investigation with the SEC of his activities as an investment banker at CSFB, was effectively a governmental entity and cannot penalize him for asserting his Fifth Amendment right.  The appeal is now with the SEC, and the full Commission will consider the case.  Quattrone's brief to the SEC is here (Download quattrone_opening_appeal_brief_to_sec_pdf1.pdf).  Thanks to his counsel, Barbara Winters, for permission to post the brief. (ph)

March 26, 2005 in Civil Enforcement, Securities | Permalink | TrackBack (0)