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August 12, 2013 Articles

Just the Facts on White-Collar Litigation

A practitioner of criminal litigation discusses interviewing witnesses, the FCPA, and where the SEC and DOJ are headed.

By Young Advocates Committee

An Interview with Sean Haran


How did you choose to practice in white-collar law? Is there anything that or anyone who drew you into this area?
It has never really occurred to me that I would practice any other type of law. I went to law school to practice in the field, and the criminal-justice courses and clinics I participated in, along with the summer I spent after my first year as an intern at a district attorney’s office (sneaking away at times to watch federal criminal trials) only served to cement it for me. Finally, as a young law-firm associate, I was blessed with the opportunity to work in the courtroom with and take lessons from three fantastic trial lawyers: Peter Fleming Jr., Charlie Stillman, and Paul Shechtman.

It may sound corny, but perhaps much like many others, the person who drew me into the practice the most was probably Atticus Finch, who is the lead character in To Kill a Mockingbird. He is still one of my favorite characters and to this day I cannot watch that movie without getting worked up!

What is your favorite part of practicing in white-collar law?
Every case has its own story, and every client—whether that client is an individual or an organization, the target or subject of an investigation, the defendant in a charged case, or simply a witness—has his or her own unique defenses and interests. I love diving into the facts of each case, exploring questions of proof, and figuring out the strengths and weaknesses. For most clients in criminal and government-enforcement matters, the case at hand is of the utmost significance to him or her and the stakes are high. Moreover, issues of fairness and justice are always present. In sum, it is the most interesting type of practice that I know.

Name and describe one case that anyone who practices in white-collar litigation should know. 
Probably the most well-known case in the field is Brady v. Maryland, 373 U.S. 83 (1963), in which the U.S. Supreme Court held that the government has an obligation to disclose to the defense any material exculpatory evidence that it possesses. “Brady material” includes statements of witnesses or tangible evidence that conflicts with the government’s case. In the Brady case, two men, Brady and Boblit, were prosecuted for murder. Brady had admitted being involved in the murder, but he claimed that Boblit had done the actual killing. At Brady’s trial, the prosecution had withheld a written statement by Boblit confessing that he had committed the act of killing by himself. The Supreme Court held that the evidence of Boblit’s confession should have been disclosed because it likely could have made a difference to Brady’s conviction or punishment. A close corollary to Brady is Giglio v. United States, 405 U.S. 150 (1972), in which the Court ruled that the prosecution must disclose impeachment material or evidence that would allow the defense to attack the credibility of the prosecution’s witnesses to the defense. The disclosure of Brady and Giglio material to defendants is critical to the fair administration of justice.

What is a common mistake people make when practicing white-collar law? 
Most criminal cases come down to a small handful of key facts and perhaps one or two legal defenses. The best lawyers identify their defenses quickly and stick to their themes throughout every interaction with the government and the court. Where it makes sense, they counsel their clients to plead guilty early and use their time and resources to focus on the most important aspect of the case for the client: sentencing. A mistake that inexperienced criminal-defense lawyers make is to treat the matter as if it is a civil case, file blunderbuss-style motions, make weak objections to admissible and relevant evidence, and clutter sentencing presentations with arguments that only force the government to remind the judge about strong evidence of guilt. By taking such actions, they fail to tailor their presentation in a way that would most benefit their client; they also quickly lose credibility with the court and with the government.

What advice would you give to junior attorneys in white-collar law? Are there any key skills that new lawyers should develop to excel in white-collar law?
Always look for opportunities to question witnesses and keep in mind that, especially as a young lawyer, you likely will have much more success getting valuable hands-on experience in smaller, lower-profile cases than in large and notable cases. The most important skill a criminal-defense lawyer can have is the ability to effectively cross-examine witnesses, and the only way to learn how to question witnesses is to do it (and to do it over and over again). This is why many top trial lawyers are former prosecutors. Prosecutors are no smarter than anyone else, but they have the luxury of spending much of their careers interviewing and questioning witnesses. In short, keep an eye out for matters where you can be involved in speaking with witnesses. Unless you are in public service already, pro bono cases are often a great place to start.

What trends have you seen in white-collar litigation over the last several years?
The government in white-collar criminal cases has turned back to more traditional law-enforcement techniques, such as wiretaps, in investigating insider trading and securities fraud in corporate board rooms and at hedge funds. The Rajat Gupta insider-trading case is just one example of this trend. In addition, the Department of Justice has continued to prioritize enforcement of the Foreign Corrupt Practices Act (FCPA) in part by recruiting young but experienced prosecutors from around the country to work at the Frauds Section in Washington, D.C. Many of these lawyers cut their teeth handling violent crime, narcotics, and terrorism cases, and they bring their aggressive style to the prosecution of FCPA matters. Indeed, the increased enforcement has generated a cottage industry in the private sector devoted almost exclusively to anti-corruption counseling and compliance. Virtually every large law firm now professes to be capable of handling these matters. Finally, and most recently, there has been a spike in public-corruption cases involving local and state government officials.

What do you do to stay abreast of emerging issues in white-collar law? Are there any specific practice publications or web resources that are particularly helpful?
It is easier than ever to stay informed. Besides word of mouth in the community, even the New York Times and the Wall Street Journal have blogs devoted exclusively to white-collar crime topics. The ABA offers regular events, such as the White Collar Crime conference, featuring updates. Finally, legal-news services send daily emails devoted to summarizing recent cases and developments in the field. The trick is not to get too distracted by the sheer volume and constant flow of information available.

What changes do you expect to see in white-collar litigation over the next five years?
While insider-trading cases have had the headlines in recent years, the Department of Justice and the Securities and Exchange Commission (SEC) have brought fewer accounting-fraud cases. The SEC recently announced that it will be recommitting itself to the investigation of accounting fraud at public companies and will be using computer algorithms to help detect red flags in publicly filed financial statements.

In addition, I think we will continue to see increased efforts by the government to investigate health-care fraud. The False Claims Act continues to incentivize whistleblowers to bring qui tam actions sounding in fraud, and the government will continue to invest resources in prosecuting these matters because of the billions of dollars in recoveries at stake.

More generally, the federal sentencing guidelines have been “advisory” for more than eight years, but most judges continue to apply them and depart rarely and modestly. A number of prominent judges have continued to criticize the guidelines and have called for a non-mathematical model in white-collar cases that would require the court to evaluate multiple factors in determining the sentence. The goal would be to base the punishment on the egregiousness of the conduct and the extent of the harm, rather than simply using dollar-loss amounts and a rigid point system that can lead to irrational results. Prosecutors continue to rely on the prospect of stiff federal-guidelines sentences in persuading targets to cooperate, which is why they have a vested interest in keeping the guidelines intact, but I think the debate will continue.

Finally, I think we will see more alternative sentencing models in federal narcotics cases, particularly in non-violent cases involving first-time offenders, given the ever-increasing federal-prison population and the continuing recognition by courts (and prosecutors) that federal mandatory minimums and high-guideline sentences are not always necessary or appropriate.

Interview conducted by Lindsey Nelson, a content editor for the Young Advocates Committee.

Sean Haran is a partner with Nixon Peabody LLP in New York, New York.