April 04, 2012 Articles

The Pitfalls of Parallel Proceedings

The safest path through one investigation may lead to a dead end in another.

By D. Grayson Yeargin and Lindsey M. Nelson

Most people accused of murder only have to face one investigation, one judge, one jury, and one verdict. A corporate executive accused of “cooking the books,” on the other hand, is lucky if he or she only has to face one proceeding—chances are, he or she will have to face three, four, or five separate investigations, otherwise known as parallel proceedings.

The concept of parallel proceedings is not new, but in today’s environment, such proceedings have become more prominent. “Parallel proceedings” refer to multiple cases arising out of the same set of facts or transactions. The cases can be brought by governments (including multiple agencies of the same government or multiple governments) or by a combination of governments and private parties (often shareholders). The proceedings can occur in tandem or in succession.

A person charged with a white-collar crime may be facing parallel proceedings in many different arenas—criminal proceedings, civil proceedings, Securities Exchange Commission (SEC) actions, and even congressional investigations. Each of these arenas presents different issues, and an attorney representing a client involved in parallel proceedings must be cognizant of how a decision in one action could affect the outcome in any or all of the others. In particular, when facing parallel proceedings, attorneys must be mindful of a number of key issues: (1) the Fifth Amendment right against self-incrimination; (2) the attorney-client privilege; (3) cooperation between government agencies; (4) juggling the demands of civil and criminal proceedings; and (5) the “politics” of parallel proceedings.

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