Friday, April 4, 2008

Ninth Circuit Reverses Stringer

The defense suffered a major loss today as a result of a reversal by the Ninth Circuit Court of Appeals. In United States v. Stringer, the district court had dismissed indictments concluding "that the government had engaged in deceitful conduct, in violation of defendants' due process rights, by simultaneously pursuing civil and criminal investigations of defendants' alleged falsification of the financial records of their high-tech camera sales company." The lower court had also stated that "should there be a criminal trial, all evidence provided by the individual defendants in response to Securities and Exchange (SEC) subpoenas should be suppressed." 

In a short 22 pages the Ninth Circuit penned an opinion that completely reverses this position. Circuit Judge Schroeder stated:

"We vacate the dismissal of the indictments because in a standard form it sent to the defendants, the government fully disclosed the possibility that information received in the course of the civil investigation could be used for criminal proceedings. There was no deceit; rather, at most, there was a government decision not to conduct the criminal investigation openly, a decision we hold the government was free to make. There is nothing improper about the government undertaking simultaneous criminal and civil investigations, and nothing in the government’s actual conduct of those investigations amounted to deceit or an affirmative misrepresentation justifying the rare sanction of dismissal of criminal charges or suppression of evidence received in the course of the investigations.

We also reverse the order excluding evidence received from the conflicted attorney. We do so because the government advised the attorney of the existence of a potential conflict and did not interfere with the attorney-client relationship."

The Decision - Download Stringer.pdf


Civil Enforcement, Judicial Opinions, Securities | Permalink

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