Thursday, December 8, 2011
The New York Times yesterday wrote that in the wake of a CBS 60 Minutes report which said that members of Congress bought stock in companies while considering legislation that might affect those companies, Congress is considering laws banning such trading. The CBS report said none of the trading was illegal at the time. See here.
The 60 Minutes report said that the current chairman of the House Financial Services Committee, Spencer Bachus (R-Ala.), then the ranking Republican on the committee, bet stock prices would fall at the time he was being briefed privately that a global financial crisis might be imminent. According to the Times, at that time Congressman Bachus' office denied he had used nonpublic information as a basis for trading.
I do not venture to assess whether any Congressperson traded on inside information. I am also generally opposed to "new laws" since most are unnecessary and duplicative. Nonetheless, I see no reason that Congress should not be held to the same standard as private businesses or citizens. I also suggest consideration that a new statute, a mirror image to 18 U.S.C. 1001, which criminalizes a false statement to a government official, be enacted prohibiting false statements by a government official to the public.
Wednesday, December 7, 2011
As noted by co-blogger Solomon Wisenberg here, former Illinois Governor Rod Blagojevich received a sentence of 14 years.(see also FBI Press Release here). He is not the first governor from Illinois to be convicted and sentenced. History includes Otto Kerner (sentenced to three years), Dan Walker (sentenced to seven years - crimes unrelated to his office), and George Ryan (sentenced to 6 1/2 years). (see here) Two questions to ask here: 1) Are white collar sentences really getting lower? 2) Would his sentence be so high if he had quietly plead?
Tuesday, December 6, 2011
Former MF Global chief executive and former Senator and Governor Jon Corzine has reportedly been subpoenaed to testify this Thursday, December 8 before the House Agricultural Committee concerning MF Global.
The ostensible primary purpose of Congressional committee hearings is to gain information so that the Congresspersons can enact appropriate legislation. Cynics, however, might contend that a major purpose is to let the folks back home know that their Congressperson is tough on Wall Street.
In any case Corzine, on advice of his low-key high-quality counsel, Andrew Levander, will most likely assert his Fifth Amendment privilege against self-incrimination and decline to answer questions. MF Global reportedly "borrowed" customer funds to support its precarious positions in foreign sovereign debt, commingling these funds with its own funds. Although I do not venture to state whether any crime was committed, or whether Corzine was involved in or knowledgeable of any wrongful activity, most criminal defense lawyers representing a hands-on head of a less-than-giant entity against which such accusations have been bruited at this stage would take a conservative approach and advise their client to remain silent. On the other hand, public figures, concerned with their political and public futures (although Corzine's future political career does not look rosy) and often with high estimations of their own powers of persuasion, sometimes feel that they must present their side of the story or else look like "criminals," and that they can do so effectively.
The obvious dangers of testifying are that the witness, whatever his culpability or lack of culpability, may make statements that may later be used as admissions in a criminal or other proceeding or, as in Roger Clemens' case, as the basis for a perjury charge. Of course, although the Supreme Court has pronounced that the protection of the Fifth Amendment applies to the innocent as well as the guilty, a refusal to answer questions is viewed by most people as an indication of guilt. Thus, the decision whether to testify is a "damned if you do, damned if you don't" situation.
Corzine, if he does not wish to testify, through his lawyers will likely seek, or has sought already, to eliminate the necessity of his physical appearance by submitting a letter explaining his intention to invoke his constitutional privilege. That request almost certainly has been or will be refused. Letters do not make good TV. Alternatively, Corzine likely will seek, or has already sought, to limit his appearance to a short statement stating his assertion of his constitutional right against self-incrimination. That request might also be refused. The Congresspersons may want Corzine to undergo a public flogging by "Q&R" -- question and refusal. That does make good TV.
Corzine could conceivably be granted use immunity and, since his resulting testimony could not then be used against him, be deprived of his Fifth Amendment protection and required to testify. However, since Oliver North's conviction was overturned based on the taint from his immunized Congressional hearing testimony, Congress has been extremely wary of using its immunity power.
Check out Jon May's Opinion piece in the National Law Journal, Reform the Foreign Corrupt Practices Act - A good way would be to create an absolute defense to prosecution when a company self-reports a violation
Sunday, December 4, 2011
Each spring, Fordham University School of Law hosts the Irving R. Kaufman Memorial Securities Law Moot Court Competition. Held in honor of Chief Judge Kaufman, a Fordham Alumnus who served on the United States Court of Appeals for the Second Circuit, the Kaufman Competition has a rich tradition of bringing together complex securities law issues, talented student advocates, and top legal minds.
The year’s Kaufman Competition will take place on March 23, 2012 to March 25, 2012.
Our esteemed final round panel includes Judge Paul J. Kelly, Jr., of the Tenth Circuit; Chief Judge Alex Kozinski, of the Ninth Circuit; Judge Boyce F. Martin, Jr., of the Sixth Circuit; Judge Richard A. Posner, of the Seventh Circuit; Judge Jane Richards Roth, of the Third Circuit; and Commissioner Troy A. Paredes, of the United States Securities and Exchange Commission.
We are currently soliciting practitioners and academics to judge oral argument rounds and grade competition briefs. No securities law experience is required to participate and CLE credit is available.
Information about the Kaufman Competition and an online Judge Registration Form is available on our website, www.law.fordham.edu/kaufman. Please contact Michael A. Kitson, Kaufman Editor, at KaufmanMC@law.fordham.edu or (212) 636-6882 with any questions.
Friday, December 2, 2011
Patricia Hurtado, Bloomberg, Rajaratnam Seeks to Remain Free While Appealing Wiretap Use
Mark Hamblett, NYLJ, Lawyer Suspect Who Fled to Asia to Be Extradited (w/ a hat tip to Ivan Dominguez)
Tom Fowler, Houston Chronicle, Enron case was much bigger than FBI agent first thought
D. Daniel Sokol, Antitrust & Competition Policy Blog, Corporate Compliance - Enron and Sarbanes Oxley (To Music)
ABA, Differences with Distinction, Understanding the Important Dissimilarities Between State and Federal RICO Statutes and their Impact in Litigation, Dec. 6, 1-2 P.M. - Download Differences with Distinction 12.6.11 (1)
ABA White Collar Conference, Miami Beach, Feb. 29 - March 2 here
NACDL White Collar Criminal Defense College at Stetson, Gulfport, Florida, March 15-20 here
Thursday, December 1, 2011
"In this Court’s experience, almost all of the prosecutors in the Office of the United States Attorney for this district consistently display admirable professionalism, integrity and fairness.
"In this Court’s experience, almost all of the prosecutors in the Office of the United States Attorney for this district consistently display admirable professionalism, integrity and fairness.So it is with deep regret that this Court is compelled to find that the Government team allowed a key FBI agent to testify untruthfully before the grand jury, inserted material falsehoods into affidavits submitted to magistrate judges in support of applications for search warrants and seizure warrants, improperly reviewed e-mail communications between one Defendant and her lawyer, recklessly failed to comply with its discovery obligations, posed questions to certain witnesses in violation of the Court’s rulings, engaged in questionable behavior during closing argument and even made misrepresentations to the Court."
"Consequently, the Court throws out the convictions of Defendants Lindsey Manufacturing Company, Keith E. Lindsey and Steve K. Lee and dismisses the First Superseding Indictment."