Latest Developments in the SEC’s Cryptocurrency Enforcement

 

SEC HQ front.jpgBy Daniel Portnov

It’s been a busy 2018 for cryptocurrency enforcement by the SEC. Following statements by Chair Jay Clayton and Co-Director of Enforcement Stephanie Avakian announcing various cryptocurrency concerns, sweeps and initiatives,[1] several recent Commission enforcement actions have backed up its big talk. Nearly one year after the creation of Enforcement’s Cyber Unit, cryptocurrency enforcement has grown into a vital element of the agency’s mission to protect main street investors.

Let’s take a look at some recent developments in this area.

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Posted in SEC Investigation, SEC policy and practice, Securities fraud | Leave a comment

How to Pick a Fair Jury

JuryI don’t care what jury consultants say, picking a jury is an art and not a science.

For most trial lawyers, it’s based on gut feelings and sizing people up quickly and peeks at what a juror’s t-shirt says or what book she’s reading.

The dirty little secret is that it’s also based an awful lot on stereotypes. I hate that part, but it’s a necessary evil.

I want to talk about uncovering juror bias during jury selection. The Sixth Amendment guarantees a fair trial and that includes a fair jury too.

If you’re looking for wisdom about how to uncover juror bias, you’ve come to the wrong place. (Sorry for the clickbait title.) I’ve tried a lot of cases and talked to a lot of jurors before trial (and after), and I’ve come to the very definite conclusion that it’s pretty much impossible to uncover all the bias during our current jury selection system.

The court system is short on time and resources. We all do the best we can. A recent case out of the Ninth Circuit shows that sometimes the court’s best efforts are not enough.

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A (Small) Victory in a Battle With OIG

superhero-businessman-with-red-cape-concept-for-leadership-picture-id817347476.jpgBy Dan Portnov

As readers of Grand Jury Target know, we have a healthy respect for the various Offices of Inspector General (see here, here and here). OIG investigations can lead to serious consequences and, to add further anxiety, much of how the OIGs conduct their investigations remains mysterious. For someone to get their hands on an OIG Manual or any investigations policy document is virtually unheard of… until last month.

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Posted in Civil Litigation Strategy, OIG investigations | Leave a comment

Can Michael Cohen Reject a Presidential Pardon? Yes. But Would He?

Monopoly pieces and Get Out of Jail Free cardOn August 21, 2018, former Donald Trump attorney Michael Cohen pleaded guilty to multiple criminal counts, including campaign finance fraud. During his plea hearing, Cohen implicated the President in the crime, saying that Cohen had paid Stormy Daniels (a) at Trump’s direction, and (b) with the purpose to influence the presidential election.

Speculation immediately ran wild about the possibility of President Trump pardoning Cohen. On the one hand, it seemed possible because Cohen may know much more than he’s already disclosed to prosecutors during the investigation and because the plea deal did not contain an explicit cooperation deal. (As I’ve written here and here, it seems awfully likely that Cohen is cooperating and getting a deal.)

On the other hand, it seemed unlikely that Trump would pardon Cohen if Cohen had decided to cooperate with the government against him. He’s not exactly the forgiving type. See, e.g., the “failing New York Times,” “Crooked Hillary.”

On August 22, 2018, Cohen’s lawyer, Lanny Davis, was quoted by NPR as saying:

I know that Mr. Cohen would never accept a pardon from a man that he considers to be both corrupt and a dangerous person in the oval office. And [Cohen] has flatly authorized me to say under no circumstances would he accept a pardon from Mr. Trump, who uses the pardon power in a way that no president in American history has ever used a pardon — to relieve people of guilt who committed crimes, who are political cronies of his.

I was talking with a fellow white-collar lawyer the day Davis’ quotes were publicized. Neither of us had ever heard of a situation where someone would reject a pardon.

Could that happen? More important, would it happen?

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Posted in Legal profession, Plea Agreement, Sentencing | Tagged | Leave a comment

What’s a Mistrial?

Group of hands with pointing fingerLate in the afternoon of September 5, 2018, U.S. District Judge Royce C. Lamberth declared a mistrial in the second trial of Nicholas Slatten. The jury had been deliberating for a remarkable 16 (!) days when it sent a note saying, “we are unable to reach a unanimous decision.”

Slatten is a former guard for the private security company Blackwater. This was his second trial. He had previously been convicted of murder for a shooting incident in Baghdad’s Nisour Square on Sept. 16, 2007. That conviction was reversed because the court of appeals concluded that Slatten should have been tried separately from his co-defendant.

Many people hear the phrase “hung jury” or the word “mistrial” and think that’s the end of a criminal case against that defendant. They are always surprised when I explain that it means the government can start all over and try the defendant.

In the Slatten case, Judge Lamberth declared a mistrial but gave the government until September 14 to decide whether to retry Slatten for a third time.

In the Paul Manafort case, the judge considered granting a defense motion for a mistrial after they learned that one juror had commented to a second juror that the defense case was weak.

So, what exactly is a mistrial?

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Why Isn’t Michael Cohen Getting a Cooperation Agreement? (Part Two)

Writing correspondenceLast week, I wrote about the somewhat surprising fact that Michael Cohen pleaded guilty, allocated at the plea hearing that President Trump directed him to make an illegal campaign donation, and yet didn’t have a written cooperation agreement.

In fact, the plea agreement said that neither party would move for a departure from the sentence range, which is generally how a defendant’s cooperation would be taken into account at sentencing.

I promised that I’d offer another possible way that Mr. Cohen might have a cooperation agreement with the government.

The other possible way is through Rule 35.

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Why Isn’t Michael Cohen Getting a Cooperation Agreement? (Spoiler: He Probably Is) (Part One)

Dark room for interrogation. 3d renderingMuch was made this week of the fact that Donald Trump’s lawyer Michael Cohen pleaded guilty without a written cooperation agreement.

He pleaded guilty to multiple federal offenses, including tax fraud, campaign finance violations and bank fraud. The guidelines range agreed to in the plea deal is around 4 to 6 years.

Now, it’s true that his plea agreement did not have a cooperation provision in it. In fact, it said

The parties agree that neither a downward nor an upward departure from the Stipulated Guidelines range set forth above is warranted. Accordingly, neither party will seek any departure or adjustment pursuant to the Guidelines that is not set forth herein.

Even though the plea agreement said that neither party would seek a downward departure (even for assistance), it’s still very possible that Mr. Cohen will get cooperation credit during the whole sentencing process.

Let’s explore how that could happen.

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Posted in Plea Agreement, Sentencing | Tagged , | 5 Comments

What It Takes to Be a Trial Lawyer, If You Are a Woman

Portrait of a mature businesswoman taken outsideWhen I saw the title of the recent article in The Atlantic by Lara Bazelon, “What It Takes To Be a Trial Lawyer, If You’re Not a Man,” I couldn’t wait to read it. I’m a trial lawyer. I’m also a woman. Everyone loves to read about themselves, right?

Bravo to Bazelon for taking on a tough and seldom-covered topic.

My excitement, however, turned to dismay when I read the article. Bazelon’s thesis is that “the courtroom [is] merely another place where the advancement of women has been checked.”

That hasn’t been my experience, and I’ve tried cases across the country for the last 15 or so years. I’ve found courtrooms to be the great equalizer.

Do Clothes Matter?

Bazelon’s first argument is that female trial lawyers’ clothing is an issue. She posits:

Women’s clothing choices, by contrast [to men’s], were the subject of intense scrutiny from judges, clerks, marshals, jurors, other lawyers, witnesses, and clients. I had to be attractive, but not in a provocative way.

Every day I’m in trial, I wake up, pick either a dull dress and jacket or dull pants and a jacket, and start worrying about the stuff that really matters like my examinations. The only comment I ever received on my clothing was from one client who thought my clothing choices were “too boring” and urged me to wear some bright colors. I didn’t take offense, and I didn’t change my wardrobe to suit him.

We won the trial.

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Posted in Legal profession, Trials | 1 Comment

Government Contractors Conducting Investigations: A New Normal?

By Dan Portnov

Here in DC, government contractors are everywhere and vital to keeping nearly all federal agencies running. Absent an Edward Snowden-level scandal, the integration of contractors and their day-to-day work in government offices largely goes unnoticed (and underappreciated).

Snowden-sized bumps in the road notwithstanding, the slow creep of outsourcing, contracting and privatization of government functions has been a predictable result of recent Republican administrations. For example, background investigations of federal employees have been privatized – routinely outsourced to private contractors – since 1996.

Recently, however, the roles of private contractors in regulatory, civil and criminal investigations have grown. Contractors, some on location with the government agencies they serve, have taken on an increased role in conducting investigations as well as making key contacts and decisions throughout the investigation’s course.

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Posted in Criminal Investigation, DOJ policy and practice | Leave a comment

Yes, Maybe the Government Does Hate the Attorney-Client Privilege—The Challenge of Protecting the Privilege for Civil Investigative Demands

unfair to fair on white paperWith all the talk in the media about grand jury subpoenas, it’s important to understand that subpoenas aren’t the only way that the government can demand documents and testimony.

One of the little-known but often-used methods is a Civil Investigative Demand or CID. This is a written demand by the government either for documents, for written responses to questions or for in-person testimony.

Just like in the grand jury context, it’s critical to protect the attorney-client privilege when responding to a CID. If you produce information that is privileged when responding to a CID, you will waive the privilege forever.

The government, however, cannot use a CID to demand production of privileged information. So why does the statute (and government investigators) make it nearly impossible for a company to protect its attorney-client privilege when it comes to CIDs?

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