Sunday, August 7, 2005

SEC Doesn't Get It

Reported here (AP Ala.Com) and here (Wall Street Jrl) are how two judges (one in the civil case and another in the criminal case) reached the same conclusion in the Richard Scrushy case - the DOJ and SEC had worked too closely together.  The SEC is concerned that these rulings will obligate them to notify defendants who are targets of a criminal investigation.

Two judges have now said the same thing and the SEC just doesn't seem to get it.  They seem to think that the ruling by these judges will preclude their ability to cooperate on matters.  Maybe, just maybe, cooperation is not the issue.  Perhaps the issue is the type of cooperation occurring here.  The backdoor conversation to find the best location that would disadvantage a defendant, and then in fact disadvantaging the defendant by not notifying him of being a target is perhaps what seems the most disturbing aspect of events here.  And is it really so cumbersome for the SEC to tell someone their status in an investigation?  If DOJ places an individual before a grand jury, there is an obligation to notify him or her of target status under the U.S. Attorneys Manual and there is an explicit guideline on "Advice of "Rights" of Grand Jury Witnesses. (U.S.Atty.Manual 9-11.151)

(esp)

http://lawprofessors.typepad.com/whitecollarcrime_blog/2005/08/sec_doesnt_get_.html

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