Saturday, December 07, 2013
A Dell Cooperator Does Well (and Probably Some Good too)
Barry Berke's cross-examination of Jon Horvath, the key witness in the Michael Steinberg trial, continued on Thursday and Friday and is expected to finish on Monday. Not surprisingly, Horvath confirmed that he never explicitly told Steinberg that he was passing him "illegal information." We also learned that Steinberg advised Horvath that SAC's walls "have ears" and therefore Horvath should "be wary" of other SAC employees who might poach trading ideas. (Side note: not a particularly cooperative environment, eh?). The implication one might draw is that Steinberg's directive to keep information "quiet" may have been aimed at preserving his own advantage vis a vis other SAC managers - ie, he didn't want other SAC traders to steal his (or his group's) ideas. Horvath's direct testimony, by contrast, had implied that Steinberg desired secrecy because Steinberg knew that he was dealing with material nonpublic information and wanted to maintain his advantage vis a vis the market. Which interpretation will the jury embrace?
Meanwhile, a different cooperator, Daniel Devore, was sentenced on Thursday to "time served," which in his case effectively meant no prison term. Devore, who worked for Dell and was the original leak of some of Horvath's information, has been cooperating with the government since at least 2010 (here is an unsigned copy of his cooperation agreement, for those who are interested). He apparently has played a significant role in assisting the government in its investigation and prosecution of insider trading within hedge funds.
Usually, the SDNY does not schedule its cooperators for sentencing until the cooperators have completed their cooperation by testifying in all relevant trials. As the government reportedly advised, it does not expect to call Devore to testify against Steinberg, although it included Devore on its list of potential witnesses. Why would the government elect not to call Devore? Presumably because Devore's testimony would only magnify the lengthy distance between Steinberg and the initial leak - which is hardly helpful if the jury has any doubts about Steinberg's state of mind.
Here's what interests me:
West on student censorship
Nice Slate essay by Sonja West (Georgia) on student speech, arguing that censoring students pervsersely teaches them that censorship is a good and acceptable idea, sort of the opposite of what we want future citizens and leaders to learn. She mentions that SCOTUS is considering the cert petition in the "I [heart] boobies] case from the Third Circuit, which, given the Court's history with student speech, may not be a good thing. Finally, she highlights the current life of Mary Beth Tinker, who retired from nursing recently to become a student-speech-rights advocate through the Tinker Tour with the Student Press Law Center.
Friday, December 06, 2013
Free speech for me but not for thee (until you're older)
I was working from home this afternoon, with Muhammad Ali's Greatest Fight (a generally cheesy docudrama about the inside-SCOTUS workings leading to the decision in Clay v. United States) on for background noise. My daughter (who will be 8 in 3 weeks) walked into the room right at the beginning of the reenactment of oral argument in Cohen v. California, as Melville Nimmer (played by Bob Balaban) stepped to the podium and the Chief (played by Frank Langella) gave his famous warning about the Court's familiarity with the facts of the case.
I quickly hit the pause button.
The inanity of balanced religious symbols
This is the annual "holiday" display in the town right next to my neighborhood in Miami, which I drive through on the way to work every day. As far as I can tell, it went up sometime Thursday afternoon or evening (I did not notice it on my way to work Thursday morning, although it's kind of hard to miss).
The problem this year, of course, is that Chanukah ended Thursday evening, before the display was fully in place and before its official "opening" that occurs this weekend. Now, since Chanukah only lasts eight nights, it is inevitable that the symbol will be up for longer than the holiday itself every year. But it would be nice if the symbol could be up for at least some portion of the holiday. Otherwise, it's a bit like dying the river green on March 18.
Worse, I am pretty confident that no one in charge realizes this fact or understands the ridiculousness of having a Menorah on display for a full month after the holiday is over. If they were serious about marking the holiday, they might have shifted the timing of the display this year. Of course, having a Menorah up without a Christmas tree probably would have violated the Establishment Clause. And vice versa, which is why the Menorah is not coming down. Instead we will, for the next month, have a religious symbol (and make no mistake, Justices, a Menorah is purely religious) on display with no connection to the holiday it is supposed to mark. [Ed: Had the city moved up the display, the other likely effect would have been total confusion]
By the way, this is not meant to be a rant against official public displays of religious symbols. It's more to push the idea that when government tries to do religion in a way that does not establish religion, it inevitably gets it wrong, sometimes in a way as to be somewhat offensive,. And especially when it's a minority religion. So perhaps they should not bother.
Mandate-ory Weekend Reading
I'm not offering up all the links here, but those interested in the contraceptive mandate cases should definitely check out:
1) The extensive series of posts Eugene Volokh has put up at the VC this week canvassing most if not all of the issues and angles in the cases.
2) Nelson Tebbe and Micah Schwartzman's arguments on Slate and Balkinization that accommodating the claimants here would violate the Establishment Clause.
3) Marc DeGirolami's post on the Center for Law and Religion Forum's website disagreeing with Nelson and Micah.
Thursday, December 05, 2013
RFRA, HHS, and Hobby Lobby
I have a short opinion piece in today's Los Angeles Times about the Hobby Lobby case, which the Court has agreed to hear and which involves a RFRA challenge by a for-profit business to the HHS contraception-coverage mandate. (Apologies for the piece's somewhat overwrought headline, which I didn't write!). My basic point is this:
The Religious Freedom Restoration Act reaffirmed an idea that is deeply rooted in America's history and traditions — namely, that politics and policy should respect and, whenever possible, make room for religious commitments and conscientious objections. True, religious liberty is not absolute, and, in a pluralistic society like ours, not all requests for exemptions and accommodations can, or should, be granted. Some religious liberty lawsuits will, and should, fail, but not simply because they involve what happens at work on Monday and not what happens in services on the Sabbath.
I should note that I do not deal in the piece with the argument -- pressed eloquently (natch) in this Slate essay by Nelson Tebbe and Micah Schwartzman -- that it would violate the Establishment Clause to accommodate, under RFRA, an employer like Hobby Lobby. I do not agree that it would, in part for reasons set out by Eugene Volokh here.
Interested in Developing As a Legal Scholar? (A note from Prof Chris Lund)
At the January 2014 AALS meeting in New York, the Section on New Law Professors is set to host a panel entitled, “Developing as a Legal Scholar: Thoughts for New Law Professors.” We’ve put together an impressive group of scholars—Jennifer Arlen (NYU), Sarah Cleveland (Columbia), Doug Laycock (Virginia), and Angela Onwuachi-Willig(Iowa)—who will join together for a roundtable discussion of how they became so awesome. They will focus on matters of vital importance to our membership (i.e., new law professors). Topics will include how they weigh the various components of their jobs, how they balance work and family commitments, how they evaluate scholarship both within and outside their fields, and how they decide on which scholarly projects to pursue.
If you’re interested—and why wouldn’t you be interested?—please come. The panel is Saturday, January 4th, 2014, running from 4:00 PM to 5:45 PM. Put it on your calendar.
But here’s something else. The Section wants input from Prawfsblawg readers! You all probably have questions about growing as a legal scholar that you’d like the panelists to answer. Put them in the comments section to this post. During the discussion and during the Q&A, I’ll find ways of slipping in your questions (only the good ones, of course, but I have a broad notion of “good”).
(Chair, Section on New Law Professors)
Here, btw, is the full panel description:
Wednesday, December 04, 2013
What is "edgy" information?
Michael Steinberg, a former portfolio manager at SAC, is currently on trial for engaging in insider trading. In a superseding indictment, the US Attorney's Office for the Southern District of New York has charged that Steinberg traded on material nonpublic information regarding Dell and Nvidia, and that he obtained this information from his employee, Jon Horvath. Since there is no question that Steinberg/SAC actually traded in Dell and Nvidia, the major question for the jury will be Steinberg's state of mind: did he know (or possibly, have reason to know - more on that later) that Horvath was feeding him illegally obtained information?
Based on the testimony of the prosecution's star witness, Jon Horvath, the answer seems to be yes. Horvath - who is testifying pursuant to a cooperation agreement (see my thoughts here on how cooperation can ultimately undermine deterrence in the long run, despite all of its obvious benefits) testified at trial last week that Steinberg indicated during a meeting in 2007 that he wanted Horvath to provide "edgy, proprietary" information. Horvath concluded that this meant "nonpublic" and illegally obtained information, but since this is Horvath's retelling of a conversation (and since Horvath never explicitly confirmed his own interpretation with Steinberg - because who in his right mind would?), that presumably leaves Steinberg's attorney, Barry Berke, some room to maneuver.
Berke began his cross-examination yesterday, and according to this morning's news, Berke may have drawn a little blood by demonstrating problems with Horvath's story. For example, it turns out that Horvath may have already been interested in securing "proprietary" information before he ever spoke to Steinberg. Apparently Horvath heard exhortations to obtain such information as early as his first day of work at SAC - as he received emails and SAC memos advising him, in effect, to ask himself "what do I have that is proprietary?" (Horvath helpfully pasted this reminder into a diary he kept for himself, called "Jon's trading rules" - because he worried he might otherwise forget?) None of this looks particularly good for SAC, but SAC has already entered a guilty plea and has agreed to pay $1.2 billion and terminate its business managing outsiders' money.
For a skilled defense lawyer like Berke, Horvath's memory lapse (he seemed to admit on cross that he can't quite remember when he had his "edgy and proprietary" convo with Steinberg) is helpful because it undercuts the idea that it was primarily Steinberg pushing Horvath to get this information, and at least suggests that Horvath may have embellished his direct testimony. Does it actually absolve Steinberg, however? I have a hard time believing so in light of some of the emails and texts introduced so far at trial (which, collectively, appear more problematic than exhortations to be "edgy"), but let's see what else surfaces.
It's been great to be back on Prawfs. Thanks, as always, to Dan for creating this community, and to everyone else for making it what it is. Study hard, grade fairly, and enjoy the break! And if you're traveling, be safe and treasure those frequent flyer miles you're racking up.
Monday, December 02, 2013
Happy to be here!
Hi there Prawf readers,
As always, it is nice to return to the Prawfs fold. As some of you may know, my interests lie in the intersection of criminal and corporate law. I teach Criminal Law, Criminal Procedure, Corporations, and a White Collar Crime seminar. I write about corporate compliance and what might generally be referred to as criminal law and economics. Recently, I have become interested in the connection between fraud and two overlapping topics, "temporal inconsistency" and the study of "willpower lapses." Over the years, several scholars, most notably Dan's colleague at FSU, Manuel Utset, have asked: what implications does temporal inconsistency have for criminal law enforcement and punishment? How should our understanding of temporal inconsistency alter the mix of criminal and civil statutes, regulation and enforcement activity that we rely upon to reduce socially undesirable conduct? Recently, I along with several other scholars had the great opportunity to offer some thoughts on this topic in comments that the Virginia Journal of Criminal Law solicited for a volume featuring Utset's work. After completing my own contribution, I decided to write a separate article exploring temporal inconsistency's implications for the corporation's internal compliance function. That paper, Confronting the Two Faces of Corporate Fraud, will appear in the Florida Law Review in early 2014. I'll post and talk about the paper later this month.
Meanwhile, in addition to writing my exam, winding down my classes (last week of teaching) and grading, I plan to blog this month on major developments in the white collar crime world. To that end, it is impossible not to be fascinated by Michael Steinberg's insider trading trial, which seems to be moving along smoothly (at least from the prosecution's perspective) for now. More on that tomorrow - I've got to head home now and light some candles. Happy holidays!
SCOTUSBlog: Attorney's Fees and Final Judgments
I have a new SCOTUSBlog preview on next Monday's argument in Ray Haluch Gravel Co. v. Central Pension Fund, which considers whether a district court judgment that leaves contractual attorney's fees unresolved can be a final and appealable judgment for purposes of § 1291 and Federal Rule of Appellate Procedure 4.
Rotations and Sundry
I've been delinquent on many things of late, but let me just pop in for a moment to:
a) wish everyone a happy Chanukah and belated warm wishes for Thanksgiving
b) welcome Miriam Baer from Brooklyn Law School, who will be visiting us here at Prawfs for the next month (at least). Miriam's been a regular guest here, and I'm delighted to publicly congratulate her and fellow Prawfs guest, Robin Effron, on being voted tenure by her colleagues recently--knowing them both well, I can say that the achievement was both richly deserved and overdetermined;
c) welcome back Bill Araiza and Darren Rosenblum who joined us in November and who will linger for a while, I hope;
d) thank our friends at Pepperdine (particularly Michael Helfand) for hosting the upcoming Prawfsfest!, which is being revived after a year hiatus;
e) signal that, in deference to longstanding tradition, there will be a AALS happy hour and I'll share information as it is acquired; and ...
f) inform readers that I'll be putting the schedule for guest bloggers together over the coming weeks and if you're a prawf -- or wish to recommend someone you know (who is a prawf ) -- and would like to come do a month long stint between January and June 2014, you should let me know at your soonest convenience. Thanks!