Labor Day Weekend Notes From White-Collar Wire

For your Labor Day weekend:

http://www.hollywoodrepublican.net/wp-content/uploads/2013/06/vincelombardi.jpg

First:  in our professional and business lives, let’s recall the significance of work.  “The only place success comes before work is in the dictionary.” ~ Vince Lombardi

Second: if you associate bourbon-and-Coke with the arrival of Fall and the college-football season, here’s a Bourbon And Coke Cocktail From Garden & Gun Magazine that sounds like a winner.

Third: if you are entertaining guests you don’t care for, or lawyers who have failed you or clients who haven’t paid you, here’s a list of  Labor Day Cocktails From The Examiner.  Except for the “Beer Margarita,” most sound revolting.

Fourth: our weekend will not be complete without this Grilled Doughnut and Ice Cream Sandwich.  And, more rum.

 

 



SEC Goes To Bat For Misled Compliance Officer

From The Wall Street Journal Risk & Compliance blog (and Samuel Rubenfeld @srubenfeld):  Good news for corporate compliance officers whose officers or employees lie to them or mislead them:  SEC Stands Up For Compliance Officers 

The Securities and Exchange Commission took the side of compliance officers — after a Colorado-based investment adviser was caught lying to one.

 

Earlier this week, the SEC said its own probe found that Carl Johns, an investment adviser in Louisville, Colo., concealed several hundred trades in his personal accounts after failing to report them by altering brokerage statements and other documents. He later created false documents that purported to be pre-trade approvals, and misled his firm’s chief compliance officer in her investigation into the trading.

 

Mr. Johns agreed to pay more than $350,000 and be barred from the securities industry for at least five years, the SEC said. The case is the SEC’s first made under a rule of the Investment Company Act that prohibits misleading and obstructing a chief compliance officer.

 

“Compliance officers should be happy that this case was brought because it will help them fulfill their duties,” said Stephen M. Quinlivan, a shareholder of law firm Leonard Street and Dainard. “If people do lie to them, the SEC’s not going to stand for it.”

 

Mr. Quinlivan said he believes that the SEC has generally stepped up its examinations of investment advisers, particularly when it comes to hedge funds and private equity.

 

If a good compliance officer is being lied to, the SEC “could certainly” bring a similar case, Mr. Quinlivan said.

 

Of course, if you’re a compliance officer and the SEC thinks you’re the one lying or misleading — or just being willingly duped — that’s another problem.



Fourth Circuit Rips United States Attorney’s Office For Brady Non-Disclosure

As noted by the White Collar Law Prof blog, here — Fourth Circuit Rebukes United States Attorney’s Office — this criticism of a United States Attorney’s Office for repeated Brady-disclosure problems is unusual.  If nothing else, the Fourth Circuit is generally a law-and-order bench, which lends the criticism greater force.  Here are some highlights:

A cursory review of this Court’s opinions reveals recent consideration of at least three cases involving discovery abuse by government counsel in this district.

 

Mistakes happen. Flawless trials are desirable but rarely attainable. Nevertheless, the frequency of the “flubs” committed by this office raises questions regarding whether the errors are fairly characterized as unintentional.

 

Remedies elude defendants because discovery violations ultimately prove immaterial to the verdict. But that is not the true problem. The problem is that the government appears to be betting on the probability that reams of condemning evidence will shield defendants’ convictions on appeal such that at the trial stage, it can permissibly withhold discoverable materials and ignore false testimony. Make no mistake, however. We may find such practices “harmless” as to a specific defendant’s verdict, but as to litigants in the Eastern District of North Carolina and our justice system at large, they are anything but harmless. “No [one] in this country is so high that [she or] he is above the law. No officer of the law may set that law at defiance with impunity. All the officers of the government, from the highest to the lowest, are creatures of the law and are bound to obey it.” United States v. Lee, 106 U.S. 196, 220 (1882). The law of this country promises defendants due process, U.S. Const. amend. V, and the professional code to which attorneys are subject mandates candor to the court, see Model Rules of Prof’l Conduct R. 3.3., and fairness to opposing parties, see id. R. 3.4. Yet the United States Attorney’s office in this district seems unfazed by the fact that discovery abuses violate constitutional guarantees and misrepresentations erode faith that justice is achievable. Something must be done.

 

To underscore our seriousness about this matter, and to ensure that the problems are addressed, we direct the Clerk of Court to serve a copy of this opinion upon the Attorney General of the United States and the Office of Professional Responsibility for the Department of Justice. The transmittal letter should call attention to this section of the opinion.

 

 

Brady requires the Government  to disclose to the defendant materially exculpatory evidence in the Government’s possession. For a refresher on the Brady rule, look here:  The Brady Rule



White-Collar News from 500 Pearl Street: For Ponzi’d Investors, There’s A Future In Suicide

Today’s collection of white-collar stories from Walt Pavlo, here — 500 Pearl Street

In particular, note the story about the alleged Ponzi schemer who tried to placate investors by offering to name them as beneficiaries on a life-insurance policy; wait out the two-year suicide clause; then kill himself.  One wonders what kind of retainer he offered when he was hiring counsel.


The Bellini and Hemingway

From the New York Times, a Bellini Video Recipe.  The Bellini — the Times‘s drink for Wednesday — is not nearly as silly as it sounds.  The cocktail is best-known for being served at Harry’s Bar in Venice.

At its tables, according to the website, Hemingway held forth:

During the long, cold winter of 1949-50, Ernest Hemingway installed himself comfortably in the Concordia room. Hemingway practically dropped in on us that year, and divided his time between the Inn on Torcello, the Gritti, and Harry’s Bar, where he had a table of his own in a corner. He was the only client with whom once during an outing to Torcello I had to drink a little myself – much, much more than a little, actually – just to keep up with him.

Hemingway was the only client, I was saying, because I have always believed that the client’s place is on one side of the counter, and the barman’s is on the other.  Everything in its place….but he had such an overwhelming personality that it was impossible to maintain any barriers.

He was generous to a fault, and filled more pages of his check-book than those of a medium length novel.

At the time, he was just finishing “Over the River and Into the Trees” in which he mentions Harry’s Bar many times. Every time I hear someone say “Hemingway sure gave you a lot of free promotion!” I say: “You’re all wet, Bud. It was me and my bar that promoted him. They gave him the Nobel prize afterwards, not before.”


Fifth Circuit: “[A] district court cannot authorize interception of cell phone calls when neither the phone nor the listening post is present within the court’s territorial jurisdiction.”

You use your cell phone for work?  In a potentially important Title III opinion, the Fifth Circuit limits the territorial reach of cellphone interception in United States v. Richard North.  In part: “[A] district court cannot authorize interception of cell phone calls when neither the phone nor the listening post is present within the court’s territorial jurisdiction.”