White-Collar Crime

2016 Predictions For the World of White-Collar Criminal Defense

What's in store this year?

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Swami gazing into a crystal ballThe new year is upon us. And so is the flood of prediction pieces for 2016. My personal favorite, which I am basing all of my major life decisions in 2016 on, is this one, but you may have different judgment.

Here’s what I predict will happen in the more narrow world of white-collar criminal defense.

The Yates Memo Will Lead to More Individual Prosecutions

This one is easy to call. In 2015, DOJ issued the Yates memo, calling for increased prosecution of individual executives in cases where a corporation is under investigation.

Already there’s been a lot written about it and much concern in the defense bar. Exactly how it will play out in practice will start to be apparent in 2016.

One big question is whether DOJ will force companies to require employees to submit to interviews — either with the company’s lawyers or DOJ (to the extent there’s any meaningful difference post-Yates). I’ve urged that if DOJ is going to require companies to require employees to talk, then employees in the private sector should get the same protection that federal employees have with the Garrity/Kalkines framework (where if you’re compelled to talk on pain of being fired, then what you say can’t be used against you in a criminal case). It strikes me as a reasonable proposal. Accordingly, I’m pessimistic that it will catch on.

The Yates Memo Will Lead To More Executives Trying to Locate Counsel on Their Own

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Right now, generally, counsel for the company suggests to executives who the lawyers are who should represent the individuals at the company. This makes sense — the lawyers for the company will need to work with the lawyers for the individuals and finding a lawyer you know and can work with is important.

It’s also a cornerstone of how white-collar referrals work. Generally, the lawyer who represents the company in a big investigation controls who gets these referrals.

To be clear, lawyers for individual employees generally do a great job for their clients. And normally being a good solider for the company means that the employee has an interest in making sure his or her lawyer is working well with counsel for the company.

That said, one could imagine a concern by some employees that a lawyer who got that work — and other work — from counsel for the company may feel some pressure to work closely with the company’s lawyer. And, to the extent DOJ is now converting company counsel into an AUSA, that could be a little cozy for some clients.

No one really thinks it would be a good idea for an AUSA to send the business card of a defense lawyer out in a target letter. Though the more lawyers for companies under investigation are deputized by DOJ, the more the standard referral arrangements in the world of indemnified white-collar cases start to look like an AUSA choosing who will represent the folks he’s prosecuting.

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Though the business of law changes slowly. And, ultimately, clients will drive this decision. We’ll see what will happen, but my bet is that more clients will start going outside these traditional referral networks in 2016.

Insider Trading Prosecutions Will Come Under New Theories

The decision in Newman (explained here) was a big blow to prosecutors who want to be seen to do something about Wall Street. And being seen as coming after Wall Street is important to these folks — it’s the only government program addressing income inequality (see, relatedly, this piece by John Oliver).

But now the landscape of insider trading liability has changed. Look, instead, in 2016, for prosecutors to start exploring novel theories to charge insider trading-esque behavior in the wake of Newman — like they did in this case.

And look for those new charging theories to be challenged.

Plus ce change, plus c’est la meme chose

Finally, in 2016, look for lots of work done by a host of different people on criminal justice reform — especially sentencing reform (e.g., this, or this). I’m pessimistic about meaningful legislative action in an election year — though I’d love to be wrong about that.

Instead, I think you’ll see good circuit decisions rolling back some prosecutorial overreaches (United States v. Clay in the 11th Circuit looks like a good option), but no fundamental shift in the balance of power. Criminal statues will continue to be broad. Essentially unreviewable prosecutorial discretion will continue to determine who goes to prison and who doesn’t, and the moral foundation of our criminal justice system will continue to rely on the magical AUSA hiring process that only finds those people who are good, true, public-minded, and morally righteous.

For 2016, I hope all the hours you bill in 2016 are on exciting projects, opposing counsel are unfailingly polite, and you have lots of contact with grateful clients who have better lives for having hired you.

Matt Kaiser is a white-collar defense attorney at Kaiser, LeGrand & Dillon PLLC. He’s represented stockbrokers, tax preparers, doctors, drug dealers, and political appointees in federal investigations and indicted cases. Most of his clients come to the government’s attention because of some kind of misunderstanding. Matt writes the Federal Criminal Appeals Blog and has put together a webpage that’s meant to be the WebMD of federal criminal defense. His twitter handle is @mattkaiser. His email is mkaiser@kaiserlegrand.com He’d love to hear from you if you’re inclined to say something nice.

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