Tuesday, May 17, 2011

In the News & Around the Blogosphere

11th Circuit Rules on Siegelman/Scrushy Remand

The 11th Circuit ruled on the post-Skillingremand in the case of Don Siegelman, former Governor of Alabama, and Richard Scrushy, former CEO of HealthSouth. The court's per curiam opinion considered honest services convictions and other convictions in light of the Supreme Court's ruling in Skilling that limits 1346 to "bribery and kickbacks."  It also looked at First Amendment rights with respect to political contributions. It's a long 65 page opinion that is very fact-specific.

Siegelman and Scrushy had raised nine errors. As to Siegelman convictions on 5 counts were affirmed and 2 were vacated.  As to Scrushy, convictions on 4 counts were affirmed and 2 were vacated. The case was also remanded for resentencing.

(esp)(blogging from San Francisco)

May 17, 2011 | Permalink | Comments (1) | TrackBack (0)

Sunday, May 15, 2011

Commentary on Raj Rajaratnam Case

As noted here by Sol Wisenberg, Raj Rajaratnam was found guilty on all counts. Many have been commenting on the case, see here, here, here, here, and here for example. Some predict that this decision will be the stepping stone for future insider trading cases (see here, here , and here)  After all the government might say - the wiretaps seemed to work in this case, perhaps they can work in other insider trading cases.

Hopefully, the government will think this through rationally.  The wiretaps were clearly questionable (see here) (Professor Dershowitz takes a different view  here).  It remains to be seen whether a higher court will find their use acceptable. If there are more prosecutions using these types of wires, and it turns out that a higher court finds them unacceptable -  a lot of time and money will have been wasted by the government. 

A second issue is with respect to what constitutes insider trading and when is the conduct illegal.  The fuzzy nature of this question makes many of these prosecutions questionable. The question I always wonder is if the person knew that the conduct was illegal, would they have committed the act.  If they knew that a heavy jail sentence would be following, would they engage in this activity.  The concern here being that perhaps more time needs to be spent on making criminal offenses clearer and educating folks on what is legal and what is not.

(esp)(blogging from San Francisco)

May 15, 2011 in Insider Trading, Prosecutions, Prosecutors, SEC, Securities | Permalink | Comments (1) | TrackBack (0)

In the News & Around the Blogosphere