Showing posts with label Securities and Exchange Commission. Show all posts
Showing posts with label Securities and Exchange Commission. Show all posts

Monday, March 24, 2014

What Else Dewey Know About Zachary Warren?

  • 21 Mar 2014 at 2:21 PM
  • 6th Circuit, Biglaw, Clerkships, Dewey & LeBoeuf, Hotties, Securities and Exchange Commission, White-Collar Crime, William and Mary School of Law, Williams & Connolly
  • What Else Dewey Know About Zachary Warren?


    For a while, interest in the Dewey drama seemed to be flagging (at least according to our traffic statistics). But lately it has revived, thanks to the recent criminal charges against the firm’s former leaders, plus the arrival on the scene of Zachary Warren — a total Dewey & LaBoeuf-Cake.
    Interest in Zach Warren has been keen — and not just because of his good looks. His tale seems to resonate with Above the Law readers because, as Matt Kaiser recently noted, “he seems like one of us.” Although Above the Law’s readership is expanding, with more than a million unique visitors a month, it’s still fair to say that a young lawyer, recently graduated from a top law school, is within ATL’s demographic sweet spot.
    Over the past few days, we’ve learned more about Zachary Warren. Dewey want to share this knowledge with you? Of course we do….

    Here’s an interesting perspective on Zach Warren from one tipster (who hasn’t met him):
    [T]here seem to be some parallels in the stories and actions in the case of Zachary Warren and Amanda Knox. Both grew up sheltered and were eager to please. Both ended up saying stuff under pressure that they would later regret. Both never saw themselves as the target of an investigation until it was too late. Both will be misunderstood and maligned unfairly by people who know nothing about them except for what they read in the press. Both will face a lifetime of negative consequences not because of anything they did, but for being in the wrong place at the wrong time and for being too naive.
    And both are total hotties. But I suspect Zach Warren never did splits and a cartwheel after getting arrested — although if he did, I’d like to see the video footage. (For the record, Amanda Knox denies the infamous gymnastics.)
    Here’s more about Zach Warren, from someone who knows him (although not well):
    He’s really nice and charismatic. Thoughtful and very smart (even by clerk standards). A wonderfully sweet, kind, fun guy.
    This is consistent with what Warren’s former boss, Judge J. Frederick Motz, told James Stewart of the New York Times: “Zach is a wonderful person, a decent, fine young man. I’m so sorry he’s being put through what’s happening.”
    Finally, here’s an assessment from a third tipster, a family friend of the Warrens:
    Your article was well done and fair for someone with so little personal knowledge of Zach. Our families have been close at times over the years, and there is not doubt that Zach is the real deal, a good person who would never knowingly participate in any fraudulent activity. Anyone who believes that a kid just out of college would have been allowed to participate in the financial planning of such a major law firm knows nothing about the business of law. The prosecutor has the power to charge and bring a calamity on a good family — a half-million dollars or more to defend through trial. One would hope that clear thinking and the fair and appropriate exercise of discretion will bring an early end to this nightmare for a family of dedicated public servants.
    The cost of a good defense lawyer raises another interesting point that has emerged in our recent conversations with sources about Zachary Warren. Why did Zach Warren talk to law enforcement without a lawyer? Matt Kaiser floated some excellent theories yesterday, but we’ve also heard that Warren might have been concerned about money. The theory is that because Warren didn’t think he had done anything wrong and possessed significant knowledge about the legal system (as a lawyer himself), he didn’t think it necessary to drop a four- or five-figure sum on a retainer.
    We’ve previously described Zachary Warren as being “well-to-do,” but let’s refine that a bit more. As a Sixth Circuit law clerk, Warren is probably earning between $60,000 and $70,000 (depending on the COLA for Memphis, which I’m guessing is low). He won’t start earning the big bucks until he joins Williams & Connolly (which has an above-market starting salary of $180,000 — and if he gets credit for his two clerkship years, he’d be looking at $210,000). If you focus on his current, reasonable but relatively modest salary as a law clerk, plus the possibility of debt from law school, Warren probably wasn’t eager to go out and hire a macher of the white-collar bar.
    What about family money? After all, Zach’s parents, Judge Roger Warren (retired) and Professor Christie Warren of William & Mary Law School, were apparently wealthy enough to help Zach buy a home when he moved to D.C. for Georgetown Law.
    Well, let’s not put too much stock in that. It was a relatively modest home, just $399,000, and it’s possible that the Warrens saw it as an investment, not just throwing around loose change. (It would have been a smart investment; D.C.’s real estate market has done well since September 2009.)
    We’ve done some poking around online, and it seems the best description of the Warrens would be upper middle class, but not rich. In 2012-2013, Professor Warren earned $76,200, according to a database of Virginia state employee salaries. As for retired Judge Warren, in 2012 he earned $67,400, as a special consultant to the California Judicial Council. He has had better years; in 2010, for example, he earned $123,125 from the National Center for State Courts, an organization he used to lead (go here, click on the Form 990 for 2010). But even in their best years, the Warrens were probably not breaking the $250,000 barrier. And I tend to agree with Elie Mystal on this: earning $250,000 is nice, but it doesn’t make you rich.
    Given his finances and his parents’ finances, one can understand why Zach Warren might not have wanted to hire a lawyer until it was 100 percent clear that doing so was absolutely necessary. And in further defense of Warren, how much could a lawyer have helped?
    I dealt with many excellent defense lawyers when I worked as a prosecutor, but there’s only so much a defense lawyer can do if the prosecution holds a tough line. I previously wondered whether Zachary Warren was given the opportunity to cooperate with the Manhattan DA’s office on the Dewey investigation in exchange for more lenient treatment for himself, like the Dewey secret seven. What we’ve been hearing lately is that there were some vague and preliminary discussions between Zachary Warren and Cyrus Vance’s office about a negotiated resolution, but they didn’t get very far because the kind of plea the DA’s office required would have wiped out Warren’s professional future.
    We don’t know all their identities, but most of the Dewey secret seven seem to be finance folks. They can plead guilty, even to a felony, and still find work somewhere — maybe not in the securities industry or in public accounting, but somewhere. Zachary Warren, however, is a lawyer, barred in D.C. and California. A guilty plea carries bigger consequences for him, as noted by Steven Harper:
    [A] plea deal poses special problems that don’t affect non-lawyers. Reportedly, Warren passed the bar last July. Among other things, a guilty plea could end forever his ability to practice law. That would be a tough way to close out an investment of five years (law school plus two clerkships) and $150,000 in tuition.
    So, in fairness to Zachary Warren, not bringing a lawyer with him to that fateful interview might have been a case of “harmless error.” It probably couldn’t have saved him from indictment, since it seems that the Manhattan DA’s office has a hard-on for him — in the non-sexual sense — and wants to see him go down.
    Why might this be the case? Some folks we’ve communicated with, noting that the Warren prosecution is being handled by a state DA’s office rather than a U.S. attorney’s office, have wondered whether Zachary Warren’s professional pedigree — Stanford, Georgetown Law, two federal clerkships — might have engendered resentment of him on the part of the assistant district attorneys working on the case.
    I’m generally a sucker for tales of status anxiety (affiliate link), but I’m skeptical of this theory. The Manhattan DA’s office is, as Kaiser noted, arguably the most well-regarded state prosecutor’s office in the country. It isn’t some rinky-dink local prosecutor’s shop; its prestigious prosecutors often go on to U.S. attorney’s offices (or, heck, the U.S. Supreme Court). The main ADA on the Dewey case, Peirce Moser, isn’t some random, inexperienced Touro Law grad; he’s a seasoned prosecutor and a graduate of UVA Law. (Yes, both Touro and UVA are in our March Madness contest for America’s worst law school — but it looks like Touro is making it to the next round and UVA is not.)
    Two other random tidbits about Zachary Warren. First, we hear that he’s straight, single, and “a real sweetheart” (so start your engines, ladies). Second, some have looked with suspicion on how quickly he got promoted to his $100,000 job as a client relations manager at Dewey, wondering if perhaps he got fast-tracked because the powers-that-be sensed he might be corruptible. But we’ve heard a different explanation: he got a “battlefield promotion” a few months after arriving at Dewey, because his predecessor in the post quit. (As you may recall, Dewey was a place with a lot of turnover.)
    Yes, our coverage to date has been fairly pro-Zach. For a less sympathetic take, see, e.g., Death Throes of Innocence (or, for that matter, the reader comments on some of our prior posts). In addition, we’ve heard rumors that in the coming weeks the DA’s office will show more of its hand — in ways that could materially affect our perception of Zach Warren. We reserve the right to change our opinion of him after additional facts emerge.
    So we’ll keep you posted. If you have information to share about Warren, including comments on or corrections to what we’ve previously written, please email or text us (646-820-8477). Thanks.
    DEWEY & LE BOEUF: MORE COLLATERAL DAMAGE [The Belly of the Beast]
    History, Class, and White-Collar Crime [Death Throes of Innocence]
    Earlier: Why Did Zachary Warren Talk To Law Enforcement?
    What Dewey Know About Zachary Warren, Defendant No. 4 In The Criminal Case?
    Dewey Finally Have Criminal Charges Against Ex-Leaders Of This Failed Firm?

    Thursday, November 14, 2013

    Law School Professor Busted Lying To Federal Judge, Goes Back to Teaching Ethics

  • Editor's note: This Shark finds the title "oxymoronic". Lucius Verenus, Schoolmaster, ProbateSharks.com
  • 13 Nov 2013 at 5:51 PM
  • Attorney Misconduct, Bar Exams, Law Professors, Legal Ethics, Securities and Exchange Commission

  • Law School Professor Busted Lying To Federal Judge, Goes Back to Teaching Ethics


    The best law school professors have practical experience that allows them to draw from personal memory to bring a lesson to life for students. One professor who often lectures students on their ethical obligations can now draw from her own experience to tell students about what happens when lawyers lie to federal judges to help clients perpetrate a fraud.
    The irony is scrumptious.
    You’d think that getting busted for lying to a judge and benchslapped silly would doom a law professor, but that’s premature. She’ll probably lose her job for failing as a professor first….

    Professor Jill Dunn currently does her thang at Albany Law School. That thang, specifically, is serving as the Academic Success Director for the school, placing her in charge of a number of initiatives that boil down to “getting Albany students to pass the bar.” Albany sits at #132 in this year’s U.S. News ranking, in part due to deteriorating bar passage rates. (Albany also didn’t make the ATL Law School Rankings, which list the top 50 schools.)
    Before taking on this role, Dunn worked in private practice, where she represented a trust set up by the Smith family. In 2004, David and Lynn Smith, a wealthy couple, set up a family trust to
    shelter funds from the SECprovide for their children. The trust — for the kids, remember — included a provision to pay the parents a $490,000 annual payment starting in 2015. No big deal.
    Except the SEC thought this was totally a big deal. When they moved in to seize the Smith family assets in 2010 when the feds figured out that the Smith family largesse resulted from a large-scale Ponzi scheme. It’s been called the biggest fraud in the history of the Northern District of New York, narrowly edging the time someone conned a guy out of a cow in Watertown. The trust was excluded from the seizure because Smith’s lawyers — including Jill Dunn, representing the Smith family trust — misled the judge about the existence of the agreement. The feds found out and were less than pleased.
    Dunn, who ran for State Supreme Court back in 2009, was censured last week by the Committee on Professional Standards. She’d already gotten sanctioned by the federal court back in 2011 and ordered to pay back the $5,355 she received from the trust after she learned of the annuity agreement. Note, her sketchy legal maneuvering was exposed before she took on her position with Albany Law. While the students may just be learning about her past now, the administration was well aware. So don’t presume this scandal will force her out of Albany.
    Meanwhile, her performance might. The hits keep on coming for Professor Dunn this week. The quarterback of Operation: Let’s Not Fail The Bar Miserably managed to see her charges fail miserably. The school admits that its New York bar pass rate declined from 81.5 percent to 79.8 percent — not a big dip, but not exactly an auspicious beginning for someone whose sole job is boosting bar passage. Worse, among Dunn’s initiatives as the Academic Success Director is personally teaching a course required for the bottom quarter of the Albany Law class intended to boost the bar pass rate (hence the legal ethics lectures). And you thought remedial classes were just for kids who start fires and Canadians. As it turns out, according to a tipster, half of the students who took her version of the “Leg Up Program!” managed to fail the bar. Indeed, from what we hear, only three failing Albany students were not in Professor Dunn’s class.
    Sure she started with students in the lowest quarter of the class, but even the Jaguars are going to demand to see progress at the end of the year.
    If you want to read the SEC v. Smith decision, it’s on the next page….


    Sunday, September 30, 2012

    Reading Tea Leaves: Defense Bar Freaking Out About the Foreign Corrupt Practices Act

    Editor's note: Department of Justice; How about checking  out "Domestic Corruption Practices" within the Probate Court of Cook County? A contributor of information to this blog suggested that a special blog be initiated for one purpose only. All complaints concerning attorneys and judges to the ARDC and Judicial Review of the IL Supreme Court be posted publicly on the blog. It has been suggested that many complaints are "shelved" and not acted upon. This special blog would assist in preventing such inaction.   Lucius Verenus, Schoolmaster,  ProbateSharks.com

    28 Sep 2012 at 4:10 PMPosted in:


    Crime, Department of Justice, In-House Counsel, Securities and Exchange Commission, Securities Law, White-Collar Crime

    Reading Tea Leaves: Defense Bar Freaking Out About the Foreign Corrupt Practices Act

    By Joe Patrice

    Nothing pisses off a lawyer more than uncertainty. Uncertainty gives rise to the risk of undermining the facade of perfect knowledge that attorneys prefer to convey to their clients. Given this character trait, it’s no surprise that the collective white-collar and corporate counsel community is freaking the hell out about every scrap of information it can glean from the Justice Department about its new Foreign Corrupt Practices Act (FCPA) enforcement policy.



    So what exactly has these observant lawyers in a tizzy?





    New edits to the DOJ website? What does that mean?!?!?



    Speeches by former DOJ attorneys? Could they be hinting at something?!?!?





    “I’m shocked, shocked to find improper payments disguised as commissions by a subsidiary to employees at state-owned companies to influence design specifications made in this establishment!“

    A wide swath of the legal community is grasping at straws in terror of the unknown, which is a little ridiculous because the DOJ has promised comprehensive guidance in a mere two weeks. That said, Assistant Attorney General Lanny Breuer promised guidance back in November 2011 and not much has happened since.



    But white-collar defense attorneys are eager to figure out what behaviors will fill their docket for the next few years. Corporate counsel can’t go to sleep until this is resolved. And transactional attorneys should learn the contours of the law before blowing it off when a client dismisses legal obstacles from local government as something they can “just handle on our end” and then winks.



    The FCPA is basically the Louis Renault law. In an effort to stifle corrupt petty officials like the former Casablanca police chief, the U.S. passed the FCPA in 1977, imposing civil and criminal sanctions on companies that bribe foreign officials and violate books and records and internal controls provisions. The DOJ and SEC have joint enforcement authority.



    In a nutshell, Congress wanted to put a halt to foreign corruption stifling American businesses by holding American companies liable if they tried to game the system. Since its passage in 1977, the FCPA has… more or less done nothing. From 1977 until about eight years ago, the government did almost nothing with the FCPA. But then the government discovered the FCPA like a child rediscovering a toy from last Christmas and started aggressively playing with it, increasing the number of cases brought from 5 in 2004 to over 60 in 2010. Actions have scaled back since then, with only 13 actions brought as of July 2012, but this continues to represent an era of aggressive enforcement compared to the bulk of the statute’s 35-year history.





    FCPA Enforcement Actions: The only thing growing faster than debt and Kardashian spin-offs (image via Gibson Dunn).

    But as enforcement has increased, clarity has taken a nosedive — which was a common complaint during the Robespierre regime as well. Companies with multiple international subsidiaries fear prosecution for unscrupulous subordinates they barely control. The books and records and internal controls provision has expanded to include acquired companies concealing violations from their purchaser, a development bringing the law close to strict liability. The fuzzy line between “government official” and “foreign executive” in “Communist” China renders almost every gift a potential crime. When 95 percent of corporate compliance executives recently polled by Kroll Advisory Solutions believed their companies’ exposure to bribery risk has increased or held steady over the last two to three years, it’s clear that a lot of folks feel powerless to avoid the FCPA.



    Lawyers seem to think the prognosis is not good for any relaxation of FCPA enforcement or the institution of a new defense to put good faith corporate clients at ease. Lanny Breuer has previously said that he has “no intention whatsoever of supporting reforms whose aim is to weaken the FCPA” and every speech and website update seems to confirm the government is just trying to provide transparency for the expansive vision of the statute they’ve carved out over the last decade.



    Still, the freak-out session is entertaining to watch, and it will only be trumped by the proclamations of doom and gloom that will follow whatever formal guidance we get in October.





    --------------------------------------------------------------------------------



    Joe Patrice is the author of Recess Appointment, a blog about political rhetoric, and he’ll be dropping in occasionally to write about the intersection of law and politics. To answer the question that you’re probably about to ask, he got his J.D. at NYU and spent ten years working at a Biglaw firm and a white-collar defense boutique. His favorite word is sesquipedalian.



    http://abovethelaw.com/2012/09/reading-tea-leaves-defense-bar-freaking-out-about-the-foreign-corrupt-practices-act/


    KawamotoDragon.com