written about vented several times (see here and here) about DOJ’s practice of leaving press releases announcing indictments on its website even after the defendant has been acquitted of the charges or after the charges have been dismissed. DOJ’s website ranks high in search results. So, if you search a defendant’s name, it’s very likely that DOJ’s press release will be the first hit.
This practice is unfair to defendants who have had the charges against them dismissed or were acquitted at trial.
Has this practice changed? Maybe.
In my usual search for blog post ideas, I was reading about Benjamin Wey. Mr. Wey was charged in 2015 with securities fraud, conspiracy, wire fraud and so forth. SDNY United States Attorney Preet Bharara (who now has a podcast so we’re supposed to like him) had his usual measured comments at the time:
“Ben Wey fashioned himself a master of industry, but as alleged, he was merely a master of manipulation. The indictment charges that Wey used reverse merger transactions between Chinese companies and U.S. shell companies to illegally conceal his ownership interest and then, with the help of his alleged co-conspirator, manipulated the market so that he could sell his interest at artificially inflated prices. As alleged, in making tens of millions in illicit profit, Wey refused to let the securities laws or the rules of a fair marketplace get in the way of his dishonest scheme.”
Quick reminder: these are comments made by a United States Attorney before anything has been proven in a court of law.
Most of the government’s case supposedly proving that this “master of manipulation” used a “dishonest scheme” to make an “illicit profit” was based on items seized from Mr. Wey’s home and offices. He sought to suppress the evidence because the search was illegal.
On June 13, 2017, an SDNY judge granted the motion to suppress. As one publication reported:
[T]he case collapsed when U.S. District Judge Alison Nathan on June 13 ordered the “blanket suppression” of a huge cache of materials seized from Wey’s home and offices, saying the broad search warrants violated the New York Global Group founder’s constitutional rights.
Nathan said the seizure of items such as children’s school records, family photos and X-rays at minimum reflected “grossly negligent or reckless disregard” of the Fourth Amendment.
Once its illegal methods were exposed–and the fact that its entire case relied on the fruits of those illegal methods–the government was forced to file for a voluntary dismissal of the case. The motion was granted on August 8, 2017.
At some point after that, the SDNY USAO updated its press release about the indictment to note that the charges had been dismissed.
You read that right: The SDNY updated its press release. Don’t believe me? Here it is:
This. Could. Be. Big.
It’s rare that I have complimentary words for DOJ, but this is an exception. While I’d prefer that DOJ remove the initial press release altogether, it is a hugely positive step to provide the public with relevant information about how the case turned out. If the government was proven wrong, then it should admit fact that as loudly as it proclaimed that the defendant had broken the law.
It isn’t clear whether this practice will be extended to all of DOJ or only the SDNY USAO or only to certain high-profile cases. I’m going to keep an eye on it going forward.
The SEC Is NOT Updating Its Press Releases
On September 1, 2017, following DOJ’s dismissal of the charges, the SEC dismissed its civil case against Mr. Wey. It too had a press release back in 2015 telling the world what a bad guy he is.
After the dismissal of the civil case nearly a month ago, there have been no updates to the SEC’s initial press release and no new press release issued.
Bravo to the SDNY USAO for making this change. I hope it becomes a DOJ-wide change in practice. And I also hope the SEC gets its act together to do the same.