Keeping civil and regulatory matters
out of criminal court
What does one do when the government comes calling about the operations of a business client? A recent CLE program, part of the Second Annual National Institute on Securities Fraud, addressed that question.
Discussion during the session focused on the distinction between a civil case and a criminal case. One distinction is human weakness versus human avarice, suggested David L. Douglass, with Shook, Hardy & Bacon, LLP. A few considerations on the standard of reaching criminal enforcement, said Marc Steinberg, Rupert and Lillian Radford Professor of Law, Southern Methodist University School of Law, include the degree of financial loss, whether the case has gained a lot of press attention and whether it involves insider training. A CEO lying about educational credentials is unlikely to be a criminal case, for example.
Several panelists weighed in on a sense of what constitutes meeting the threshold of a criminal case. Once a case becomes a criminal one, panelists suggested how to respond including offering assistance to make the government’s job easier, seeing that the offending parties leave the business and having a strong compliance program in place. These factors can assist a client’s case.
If a criminal case is brought, decide early, said Douglass, whether to cooperate or fight the charges. But that’s not always easy. Barriers to cooperating include imperfect knowledge, changing information and the fact that corporations are complex entities. Lawyers can be caught in the middle, continued Douglass: they’re negotiating with the government on behalf of their client. Meanwhile, the lawyer is negotiating with his or her client on behalf of the government.
“Perspective and Proportion: Keeping Civil and Regulatory Matters Out of Criminal Court,” brought together an array of panelists from academia, government and law firms. In addition to Douglass and Steinberg, the panelists included: Michael Clark, with Hamel Bowers & Clark, LLP; Peter Bresnan, deputy director, U.S. Securities and Exchange Commission; and Lauren Goldberg, U.S. Attorney's Office, Southern District of New York.
Materials from the entire national institute can be purchased here. In addition the program outlined above, conference highlights include “Lawyers, Lawyers Everywhere: Who Do You Represent Again?” and “Trends and Expectations in Securities Fraud Enforcement Cases and Criminal Prosecutions.”
