Thursday, May 5, 2011

20th Annual National Seminar on Federal Sentencing Guidelines - Sentencing Issues in Securities Cases

This was an extremely high-powered panel, with Hon. Frederic Block (E.D. N.Y.) serving as the moderator. 

Giving background on securities fraud sentencing was Alexandra Walsh (Baker & Botts). She noted that the biggest driver is "loss" with as many as 30 points added, and with first offenders being eligible for extraordinary sentences. As long as "loss" has such a huge influence and as long as there are judges who will look at the circumstances  -  there will be disparity.  She asked what will be the Commission's response - will they scale back these sentences?  Judge Block noted how easy it is to get life for a securities fraud sentence. 

Providing history of how we got here - Peter S. Spivack (Hogan Lovells) used the case of Jamie Olis (background see here). He told how each new piece of legislation increased the possible sentence.

Judge Block noted how Dura Pharmaceutical set the standard of "loss" in civil cases. Speaking about post- Dura, Hank Asbill (Jones Day) noted how the 5th Circuit looked at "loss" and how it was developed in civil cases.   But the 9th Circuit in Berger took a different position as noted by Judge Block. They chose not to use the civil fraud standard.  Hank Asbill showed a flaw here when he asked - how do you determine the harm to society? He noted how the court gave Berger himself a break. But other cases in the 9th Circuit may not be agreeing with Berger. As noted by Judge Block - "we are dealing with fuzzy stuff."  Judge Block then mentioned the Dodd-Frank Act which seems to have language more like Berger, as opposed to Dura.

Michael Horowitz (Cadwalader Wickersham & Taft, LLP)  was asked whether the Sentencing Commission has to scratch Dura.  It sounded like the Commission will address this issue this coming summer. But where should the Commission go -  on one hand there is a view to raise the guidelines (tough on crime), yet another view is to think beyond incarceration.  Judge Block questioned whether the Commission was giving judges real guidance here.

The Department of Justice (DOJ)  person on this panel was Daniel Braun, Assistant U.S. Attorney in the Southern District of NY (starting of course with the typical DOJ disclaimer that he was not speaking for the dept.). He noted that with increased discretion you get broader differences in sentences. He spoke to the letter of Jonathan Wroblewski, Dir. of Policy and Legislation, DOJ.  He stated that this letter was not focused on individualized cases but rather on the broad differences in sentences. (There had been criticism that the letter singled out some specific cases)

Michael Horowitz noted how in the Adelson sentencing, the judge (Judge Rakoff) specifically asked the AUSA if life was an appropriate sentence. Which of course the AUSA could not answer. (Background on Adelson - see here)

Judge Jed Rakoff, speaking next, noted that the guidelines don't capture -  what kind of human being do you have in front of you.  He said that bad guys who make serious mistakes deserve to rot in prison, but he felt different about good guys who make serious mistakes.

Hank Asbill looked at what should a defense attorney do -  he looked at issues of change of venue (are you leaving a more favorable judge?).  He mentioned the Pepper case (see background here) as to whether the court could consider post-arrest variances. Things that were banned from the guidelines, now come back into the game. The panel ended on a somewhat humorous note - with the telling about an Israeli study that showed that favorable sentences were after the judge had eaten.

Bottom line - this was an incredible lineup of speakers, an incredible panel - hats off again to Kevin Napper (Carlton Fields) for putting this one together.

(esp)

http://lawprofessors.typepad.com/whitecollarcrime_blog/2011/05/25th-annual-national-seminar-on-federal-sentencing-guidelines-sentencing-issues-in-securities-cases.html

Conferences, SEC, Securities, Sentencing | Permalink

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