Saturday, March 3, 2012

2012 ABA White Collar Crime Conference - Internal Investigations

Internal Investigations in the Age of Voluntary Disclosure

This breakout session, moderated by Keely Rankin (Dechert), concerned internal investigations. A hypothetical, about a telephone message left by a rambling anonymous whistleblower reporting on activities from another country, was used to discuss a variety of issues unique to internal investigations.

Catherine Razzano started the discussion from the perspective of corporate counsel trying to decide whether to investigate and who should do the investigation. She said that you need to do some immediate investigation just to decide how to proceed (e.g., can you do a routine audit; can you trace the call; can local counsel be of assistance). It is important to keep in mind that if it is a public company it has certain reporting obligations. If an HR person does the initial investigation, and the individual is not an attorney, you may lose the privilege. In house counsel brings a certain expertise and outside counsel brings a certain independence. It was emphasized that one needs to take a measured and consistent approach – these investigations cost money.

Angela M. Machala (Scheper Kim & Harris) looked at whether there might be a reason to launch more of an investigation and she also spoke to the advantages and disadvantages of starting with the most culpable employees in setting up interviews. Cultural differences can play a part in how you proceed.

Jonathan Leiken (Jones Day) looked at the problem of what happens when you're reviewing emails and you find more problems. He said to remember - when the movie gets played back, how will the client look the most responsive.

Ryan K. Stumphauzer (O'Quinn Stumphauzer) emphasized the importance of sitting down with the control group to define expectations.

On one hand you don’t want to give incomplete or inaccurate information and on the other hand you want to act quickly. The panelists discussed the possibility that the whistleblower could beat the company to the DOJ in reporting a problem.

One thing was clear - Dodd-Frank is very scary for counsel. Ms. Razzano notes - "[w]e want to protect our employees but we want to protect company to."

(esp)(blogging from Miami)

March 3, 2012 in Conferences, Investigations | Permalink | Comments (0) | TrackBack (0)

2012 ABA White Collar Crime Conference - Recent Trials

The official opening of the 26th Annual ABA White Collar Crime Conference began with opening remarks from Raymond Banoun, chair of the Institute, followed by remarks of the chair-elect of the ABA Criminal Justice Section, William "Bill" Shepherd of Holland & Knight. Shepherd noted how the ABA includes all aspects of criminal justice (prosecutors, judges, and criminal defense lawyers). He encouraged folks to get involved in the section.

The first panel, titled Recent Trials, featured three recent cases: Raj Rajaratnam, Loren Stevens, and the Lee B. Farkus trials.

The moderator, Ronald J. Nessim, took the speakers through several topics, including the Indictment, key pre-trial issues in each case, the media, discovery, proffers, parallel proceedings, joint defense agreements, and the trial.

Discussing the Farkus case, the prosecutor on the case -Charles Connolly-talked about the issue of how do you simplify a complex fraud scheme to make it understandable for the jury, and what schemes do you charge. Professor Bruce Rogow, defense counsel on the Farkus case, responded that the Indictment was too long and too difficult. Sara Bloom, the prosecutor handling the Lauren Stevens case said the indictment was narrowly tailed. Defense Counsel Reid Weingarten responded that he is still astonished that Lauren Stevens was indicted. Jonathan Streeter, prosecutor on the Rajaratnam case, noted that he did not try to include everything in the indictment. Simplification was a key theme throughout his comments on this panel. John M. Dowd, defending Rajaratnam, discussed the bill of particulars. He emphasized that the case was really not about wire fraud, although that was the basis for the wiretap.

The government power in these prosecutions was brought to life in the discussion of the venue issue in the Farkus case and the perp walk in the Rajaratnam case. The audience was clearly perturbed by the use of a perp walk in the Rajaratnam case, where the accused had cooperated for three years, had no record, was arrested in his apartment, handcuffed for some time at the station, and finally paraded in a perp walk. This was described by defense counsel as "toxic and prejudicial" and the audience applause to that statement sounded like there was agreement. Perp walks need to stop.

Interestingly none of the defense counsel expressed major discovery problems in their cases. Connolly, the prosecutor on the Farkus case, noted how they made the sixty million documents available to defense – they made a mirror imagine for defense and set up weekly conference calls with the defense. That said, John M. Dowd pointed out problems with items such as the affidavit for the wiretap and Bruce Rogow discussed problems with respect to cooperation in the Farkus case coming on the eve of trial. He also noted how the inability during trial to go into certain motivations by cooperating witnesses made his case difficult.

Reid Weingarten emphasized that one needs to think carefully before agreeing to a proffer. He noted that once you make a proffer it is problem putting the client on the witness stand.

Sara Bloom and Reid Weingarten briefly discussed how the government refused to waive a jury trial, despite the defense agreeing to do so in the Stevens case. There was also a discussion about joint defense agreements, and John Dowd noted that when you put a joint defense agreement in writing that is the first act of mistrust.

A key word used throughout this panel by the government was simplify - one needs to make a white collar case understandable to the jury.

(esp)(Blogging from Miami)

March 3, 2012 in Conferences, Insider Trading, Prosecutions | Permalink | Comments (1) | TrackBack (0)

2012 ABA White Collar Crime Conference- Back to Basics - Sentencing

The opening session of the ABA Annual White Collar Crime program was a back to basics sentencing program. This program was moderated by Jodi L. Avergun (Cadwalader) who did a wonderful job walking the panel participants through the basics of white collar sentencing. She noted that many feel the sentences in white collar cases have no relation to the actual crime charged and in this regard she noted that Congress, this year, directed the Commission to review some of the white collar crime sentences.

Eric A. Tirschwell (Kramer, Levin, Naftalis & Frankel LLP) provided a historical background on the development of the sentencing guidelines, from mandatory to advisory guidelines, with a specific focus on the fraud guidelines. He covered key cases like Booker, Gall, Kimbrough, and Rita and also the 3553 factors that play a focal part of the sentencing framework. Moving specifically to white collar cases, he explained the basics of the fraud table found in 2B1.1 of the guidelines and talked about several recent white collar cases like two of my favorites, Parris and Adelson. Tischwell noted that it is important to calculate the guidelines range as low as possible, argue for a variance, and maybe for a departure as well, explain why the sentence is "sufficient but not greater than necessary" (SBNGN) to satisfy sentencing purposes.

For anyone who has never heard a presentation by Hon. Beryl A. Howell, (U.S. District Court, District of Columbia) it’s a must do. She always comes with incredible statistics and information. This time was no different. Hon. Howell looked at what the Sentencing Commission is doing and what are the trends that we are seeing. She focused on three areas: 1) what is actually happening with white collar crime defendants around the country 2) why statistics are important 3) what is coming next.

She started by doing something that most folks providing statistics on white collar crime fail to do – she defined what would be included within this term. Then she presented some fascinating statistics. Of particular note is that white collar sentences are going up (average in 2007 was18 months; pre-2011 shows 24 months). This is not surprising since the average guideline minimum has also increased (average in 2007 was 23 months; pre-2011 shows 31 months). Yes, the number of white collar cases being sentenced within the guidelines has decreased (68.2% in 2007 and pre-2011 it’s 47.7%), but it is also important to note that the government sponsored below guidelines range has increased (13.7 in 2007 and pre-2011 it’s 22.9%). Judges sentencing above the guidelines went up slightly (2.2% in 2007 and pre-2011 it’s 2.4%) Some statistics on the plea to trial numbers were also provided by Hon. Howell. The preliminary 2011 cases showed that 93.5 % of the cases had a plea and 6.5 % went to trial. The average sentence for pleas in white collar cases was 21 months and those that went to trial had an average sentence of 62 months. But it should be noted that the average guideline minimum for plea cases was 29 months and it was 111 months for the cases that went to trial.

Andrew C. Lourie (Kobre & Kim) offered tips for sentencing. He stressed the importance of putting important points in on sentencing memo.

Edward C. Nucci (U.S. Attorneys' Office, Southern District of Florida) presented the prosecution perspective (of course not speaking on behalf of the government). He stressed the importance of post-Booker variances. He noted how a prosecutor can want to work out as much as possible prior to the actual hearing.

Karen A. Popp (Sidley Austin), the final speaker spoke about chapter eight of the guidelines -organizations. She stressed the importance of having an effective compliance program, and not just a paper program.

This was an incredible opening to the white collar crime conference. More blog posts will follow.

(esp)(blogging from Miami, Florida)

March 3, 2012 in Conferences, Sentencing | Permalink | Comments (0) | TrackBack (0)