Letter to the Securities Exchange Commission regarding proposed whistleblower provisions to the Securities Exchange Act.

DOJ has had mixed success in the prosecution of traders. Where is the dividing line between illegal activity and savvy trading? Susan Brune and Erin Dougherty review the major categories of recent prosecutions and highlight the key issues that have presented obstacles to conviction – and opportunities for the defense.

Securities Fraud

Comments to the U.S. Sentencing Commission regarding proposed amendments to the sentencing guidelines.

Brief for National Association of Criminal Defense Lawyers as Amicus Curiae in Support of Petitioners (in support of petition for writ of certiorari).

Argument: The Second Circuit’s interpretations of “property” and “thing of value” violate this Court’s precedents. Deeming regulatory information “confidential” does not give the government a property interest in that information. Confidential information about regulatory plans is not “a thing of value” under Section 641. The Second Circuit’s interpretations of “property” and “thing of value” criminalize core First Amendment activity.

Brief for Amicus Curiae National Association of Criminal Defense Lawyers in Support of Petition for Rehearing or Rehearing En Banc.

Argument: Designating information as confidential is not enough to make it “property” in the government’s hands. This Court should not expand Section 641 and provide the government with an all-purpose tool for prosecuting leaks.

Brief for Amicus Curiae National Association of Criminal Defense Lawyers (“NACDL”) in Support of Defendants-Appellants and Reversal

Argument: Confidential government information is not “property” for purposes of wire fraud and Title 18 securities fraud. Wire fraud and Title 18 securities fraud protect a victim’s property, not regulatory, rights. CMS does not have a property interest in information regarding a regulatory decision. Confidential government information is not a “thing of value” or “property” for purposes of Section 641. Congress has developed a measured, deliberate, and tailored regime for controlling government information. Expanding Section 641 to criminalize virtually any unauthorized disclosure of confidential information would vitiate Congress’s measured, deliberate, and tailored regime for controlling government information. The prosecution’s interpretation of “property” and “thing of value” criminalize core First Amendment activity.

President Gerry Morris's letter to the House Financial Services Committee regarding procedural changes to administrative proceedings with the Securities Exchange Commission as proposed in the Due Process Restoration Act of 2015 (H.R. 3798).

The government’s almost 100 percent success rate in insider trading prosecutions has come crashing up against the Second Circuit’s focus on remote tippee liability in United States v. Newman. If the U.S. Supreme Court agrees to hear Newman, the government’s cause may be helped by United States v. Salman, a Ninth Circuit decision that appears to disagree with Newman.

While it still uses its “no admit, no deny” policy in most cases, now in certain circumstances the Securities and Exchange Commission will require defendants to admit wrongdoing in order to settle their cases. Has the new policy made a significant impact? What may be the real danger in this new policy?

Order granting ineffective assistance of counsel claim for securities fraud.

Board Member Tim O'Toole's testimony to the Senate Judiciary Committee Subcommittee on Crime, Terrorism, and Homeland Security, regarding combating corruption post-Skilling.

NACDL Board member Barry Pollack's written statement to the House Judiciary Committee regarding federal criminal fraud laws.

US District Court Southern District of New York: Walsh v. USA; Memorandum and Order

Amicus curiae brief of the National Association of Criminal Defense Lawyers.

Argument: Evidence alone that defendant signed options grants to other people – and not to himself – that were improperly dated is insufficient to establish the requisite mens rea to have “willfully” violated the criminal securities fraud laws. The only government witness to the alleged deception was a low level finance department employee who testified that she did not know that the options grants had been backdated and who recanted her testimony after trial. The brief also argues also that the facts of this case fail to establish even the “materiality to investors” requirement for a finding of civil liability; the evidence being insufficient as a matter of law, the conviction should be vacated and remanded with directions to enter a verdict of acquittal.