DOJ’s New Approach to Insider Trading Cases? It’s Not Working Yet

Win red dicePeter J. Henning, in the always-interesting White Collar Watch, has a great article today about what may be the Department of Justice’s newest way to weasel out of the Newman decision.

The defendant in an insider trading case in Atlanta was just acquitted at trial of all insider trading charges. Steven Slawson, a New Jersey hedge fund manager, was accused of using insider tips to trade in stock in Carter’s. Two former Carter’s executives had been convicted of insider trading in a related case.

DOJ relied on what may be its newest approach to charge defendants with insider trading.

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The Danger of Opening the Door: Federal Judge Rules that KBR Corporation Must Turn Over Privileged Documents in False Claims Act Case

open doorEvery trial lawyer has a few tried-and-truisms to use in the courtroom. For the admissibility of evidence: That goes to weight, not admissibility. For expert witnesses: The testimony would be helpful to the jury. And for relevance: They opened the door.

A recent ruling out of the Eastern District of Texas shows just how powerful the “opened the door” argument can be.

The government sued KBR, one of its employees, Robert Bennett, and several of its subcontractors based on supposed false statements under the False Claims Act. Just before closing arguments in the case, the court ruled that the company had to turn over to the government the company’s report of an internal investigation into supposed kickbacks to Mr. Bennett. One of the reasons for disclosure was based on testimony KBR had elicited during the trial.

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Please Take 2 Minutes to Nominate Grand Jury Target for ABA Journal’s Top 100 Legal Blogs

Hello everyone

I’m writing from Yosemite National Park–on a much-needed vacation with my family. But I realized upon checking back into social media after a week-long break that the deadline for the ABA Journal’s best 100 legal blogs is coming up very soon.

Someone coined the word “blawg,” but I just can’t quite bring myself to use it. It’s a legal blog, people.

Nominations must be made by August 16 (that’s this coming Sunday).

You can use this link to nominate any blog you wish, though I would be very appreciative if you would consider nominating this one. I work hard every week (well, nearly every week) to write substantive and hopefully interesting posts about cutting edge white collar issues.

I’ll keep writing even if I don’t win any awards, but, hey, I’d rather be on the list than not on the list. If I’m on it, I get to use a cool badge on my blog. Pretty geeky bragging rights, I realize.

Thank for considering my request. And even if you don’t nominate me, go nominate some other great blog that you love to read.

I’m heading to the Nats-Giants game in San Francisco tomorrow night so look for us on TV. We’ll be on the right field line near the Nats dugout–a prime spot for Bryce Harper to toss my sons a ball or two. That’s no doubt more exciting than any hike in Yosemite.



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Absurd Obstruction Charge Reversed–But the Government Won’t Give Up

Win red diceSometimes, the good guys win.

The Deepwater Horizon oil spill was a tragedy. The explosion was deadly and the resulting environmental harm was devastating. The government’s response was typical: let’s find some people to prosecute.

One of the unlucky targets of the government’s focus was a BP engineer named Kurt Mix. He wasn’t the head of operations on the drilling platform, nor was he the person who oversaw any faulty construction of the platform. Nope, he was just an engineer who flew to the site to help calculate the number of gallons of oil leaking from the well.

Mr. Mix was convicted of one count of obstruction of justice for deleting a few text messages related to the spill. However, the Fifth Circuit recently reversed his conviction because there was evidence that one of the jurors had been exposed to extrinsic evidence about the trial during deliberations.

The amount of extrinsic evidence was slight but the court nonetheless concluded that it was sufficient to taint the verdict. For now, Mr. Mix is the victor but it appears that the government does not intend to go gently into that good night. The retrial is currently set for November 2015.

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Tom Brady Is Lucky It Was Only an NFL Investigation

shredded evidenceDeflategate is a riveting story. In this corner: a star quarterback who may have cheated in a playoff game. In the other corner: a despised NFL commissioner flexing his disciplinary muscle by upholding the QB’s four-game suspension.

What’s turned out to be the most interesting part of the story is not whether the footballs were deliberately deflated to win the game, but whether Tom Brady improperly destroyed key evidence during the NFL’s investigation.

From what I’ve read, Mr. Brady is lucky that he was only being investigated by the NFL and not the FBI. He apparently ordered that his cellphone be destroyed the very same day he was scheduled to meet with the NFL’s outside law firm conducting the internal investigation. He then refused to turn over texts and emails on the phone to the investigators as well.

If he’d been under federal criminal investigation, he’d be looking at an obstruction of justice charge.

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Massey Mine Defense Team Wins the Discovery Lottery–But Then Can’t Collect on It?

Win red diceA few weeks ago, I wrote about some important discovery motions in the Massey Mine trial unfolding in the Southern District of West Virginia.

The defense had a nice win recently on one of those motions.

But according to a recent filing in the case, the government has not complied with the court’s order granting the defense motion. So, here we go again.

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How to Pay for a White Collar Criminal Defense Lawyer – Part II

businessman hiding face behind sign dollar symbolIn Part I of this post, I discussed how the court-appointed lawyer process works and how to find a private lawyer to represent you in a white collar case.

Now we’ll get into the nuts and bolts of picking the right lawyer and how exactly to pay for her.

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Maybe We Should Use the Kitchen Sink Approach? Judge Rakoff Denies Rajat Gupta Habeas Petition

The common wisdom in appellate work is to avoid the “kitchen sink” approach. Narrow  your issues to the strong ones, so the court can focus on them and not be distracted by less persuasive ones.

The problem with that approach in a criminal case is that waiver is the dog that is always ready to bite you.

(Got all those analogies?)

Judge Jed Rakoff (featured in another post of mine here), denied former Goldman Sach’s director Rajat Gupta’s section 2255 petition. Mr. Gupta had argued that the Second Circuit’s decision in United States v. Newman required that his conviction be vacated and that he be released.

Judge Rakoff begged to differ.

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How to Pay for a White Collar Criminal Defense Lawyer – Part I

businessman hiding face behind sign dollar symbolThere’s no question that hiring a lawyer—any lawyer—is expensive. When you are being investigated by the government or have been indicted, you need a lawyer more than ever. The stakes are high. Losing the case isn’t like losing a civil lawsuit—a loss means time in prison, not paying some money.

I frequently get calls from people who need a lawyer in a white-collar case, but have no idea how much it will cost or how to pay for one. This two-part post is my attempt to answer some of those questions.

Part I of this post will describe the two basic options—asking the court to appoint a (free) lawyer for your case and hiring a private lawyer. Part II will talk about the nuts and bolts of selecting and paying for a private lawyer.

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When Your Engagement Letter’s Indemnification Clause Is a Lifesaver: The Penn State Sexual Abuse Scandal

penn stateAfter an internal investigation, the company being investigated must decide whether it wants the law firm (or investigative firm) to author a report of the investigation’s conclusions. The results of this decision may have unintended consequences for both the company and the law firm.

The latest developments in the Penn State child abuse scandal are a case in point. Louis Freeh helped the university produce an investigative report of the child abuse carried out by former assistant football coach Jerry Sandusky. In its report, Mr. Freeh’s law firm and investigative group named former university President Graham Spanier as one of Sandusky’s chief enablers.

Mr. Spanier has brought defamation and tortious interference charges against Louis Freeh, his law firm, his consulting group and the university in Pennsylvania state court.

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