Four defense lawyers are named in the front-page New York Times article on "insider trading" cases brought by the U.S. attorney in the Southern District of New York, Preet Bharara, and the director of enforcement at the Securities and Exchange Commission, Robert Khuzami. They are:
- Benjamin E. Rosenberg, of Dechert, who represents Noah Freeman
- Craig Carpenito, of Alston and Bird, who represents Donald Longueuil
- Michael Grudberg, of Stillman, Friedman & Shechtman, who represents Jason Pflaum
- Evan Barr, of Steptoe & Johnson, who represents Samir Barai
Of these, Mr. Rosenberg "from 1990 to 1994...was an assistant U.S attorney in the criminal division in the Southern District of New York." Mr. Carpenito, "Prior to joining the U.S. Attorney's Office...served as Senior Counsel at the Securities and Exchange Commission's Enforcement Division in New York City." Mr. Barr "was Chief of the Major Crimes Unit at the US Attorney's Office for the Southern District of New York." Mr. Grudberg is the only one who doesn't seem to be a former official of either the SEC or the U.S. attorney's office.
I'm all for private-sector job creation, and some of our favorite private-sector lawyers are veterans of either the U.S. attorney's office or the SEC. Still, for Mr. Khuzami to denounce "greed" and for Mr. Bharara to denounce "something verging on a corrupt business model" is a little bit rich in this situation. What's "insider trading," after all, but the impropriety of using personal connections to get some advantage that isn't available to the general public? And what does a client hope for when hiring a former government official to represent him before the former official's former colleagues in government? Sure, maybe what these lawyers are advertising by listing their former government jobs so prominently on their Web sites is the fine legal training and trial experience they obtained in government. But couldn't some of the perceived value that allows them to bill at hundreds of dollars an hour also be the perception that they have inside knowledge of the workings of government offices and of the people who enforce the laws?
I'm not here defended those charged with crimes, nor am I recommending that those who work in government take lifetime vows of poverty or be prevented from leaving to work in the private sector. Even so, it's hard to escape the question of whether a law enforcement system that more or less forces those who can afford it to pay tens of thousands of dollars in legal fees to the former colleagues of the law enforcement officials to negotiate with the existing law enforcement officials, who are themselves perhaps thinking about eventually going to join their former colleagues at higher-paying law firm jobs is itself "something verging on a corrupt business model."