Some guy named Henry Blodget wrote that “there’s not a doubt in my mind” that Raj Rajaratnam will be convicted of insider training. The fate of the portly hedge fund billionaire has come up in an office straw poll, Blodget wrote on Business Insider.
“The distinctions the defense team is trying to draw between ‘confidential’ information and ‘material non-public’ information seem preposterous,” Blodget went on to assert.
In the name of fairness, Blodget conceded that Courtney Comstock, a Business Insider editor who has attended the trial is impressed with the defense and thinks that “Raj will walk.” But Katya Wachtel, another editor who’s been watching the proceedings in the Southern District of New York, thinks “Raj is toast.”
Isn’t it insensitive to watch the trial as though it were a sporting event, since it could end with Rajaratnam going to prison for a couple of decades? Yes, it is. But it’s human to take pleasure in another person’s troubles, especially if he’s rich.
And Rajaratnam certainly is rich, from the Galleon Hedge Fund LLD that he co-founded and — so U.S. Attorney Preet Bharara contends — from illegally profiting from insider information.
So far, Comstock is impressed with the skill of Rajaratnam’s lawyers in “neutralizing the evidence.” As for the supposed insider information Rajaratnam got from his friends on the inside, Comstock observed, “It might have been wrong for company employees to reveal it, but the information was out there in the semi-public domain. So the prosecution will have to prove that the information that Raj got was more accurate than the information that was out there from other company sources.”
If that sounds confusing, well, that might be good for Rajaratnam. Confused jurors may find it hard to convict — or to reach a verdict at all.
But what, you may ask, qualifies Henry Blodget to hold forth on such matters? Wait, don’t we know that name from somewhere? Of course we do! As a young analyst with Merrill Lynch, he publicly promoted some Internet stocks, even while labeling them “junk,” “toast” and other, unprintable adjectives. He ran afoul of the Securities and Exchange Commission and the New York attorney general’s office, negotiated a deal in which he didn’t admit anything, paid a big fine and agreed to exile from the securities business.
All of which would seem to qualify Blodget to discuss the difference between behavior that’s criminal and behavior that’s shrewd, or greedy, or cynical.
Oh, the New York Attorney General who helped banish Blodget was a guy named Eliot Spitzer. Whatever happened to him?
The Justice Department is taking strong steps to protect the constitutional rights of Muslim Americans because they are being targeted for particular prejudice and abuse, Assistant Attorney General Thomas Perez of the Civil Rights Division said Tuesday.
In comparing the discrimination of Muslim Americans to past discrimination of Catholics, Jews and others, Perez, testifying at a Senate Judiciary constitution, civil rights and human rights subcommittee hearing, attempted to fend off Republican criticism of recent DOJ actions.
Assistant Attorney General Tom Perez testifying before a Senate Judiciary subcommittee today. (Getty)
Perez touted a litany of cases in which the DOJ has sought to defend the rights of Muslims to practice their religion freely and not face discrimination. But a case involving a Muslim teacher who had to quit her job to go on a pilgrimage to Mecca took center stage, as Sen. Lindsey Graham of South Carolina, the panel’s top Republican, pushed Perez about the validity of the case.
The case involves Safoorah Khan, 29, who was a middle school math teacher for nine months in Berkeley, Ill., when she requested three weeks off for the pilgrimage. The school district rejected her request because it said she was essential for end-of-semester school work. She ultimately quit her job and made the pilgrimage. The DOJ filed a lawsuit against the school district, alleging it infringed on her civil rights by compelling her to make a decision between her faith and job.
Graham said the DOJ’s decision to take up the case was “curious.” The Republican said Khan should have been able to find a way to accommodate the school district. He said he would not support a Christian making a request for time off in the school year to attend a three-week pilgrimage to Jerusalem.
“The fact that you took this case up is going to do more damage than good,” Graham said.
Perez defended the DOJ’s decision to file the lawsuit, noting that a similar case was taken up in the George W. Bush administration against a Tennessee hospital that didn’t allow a Muslim medical technician to take three weeks off to attend the pilgrimage.
“I’m very proud of the work we’re doing in that case,” the Assistant Attorney General said.
But Graham wasn’t impressed.
“Well they were wrong too,” the senator said.
Perez’s testimony comes less than three weeks after Rep. Peter King (R-N.Y.) chairman of the House Homeland Security Committee, held a hearing on Islamic radicalization, drawing a firestorm of controversy. Spectators, members of the media and television cameras filled a packed Senate hearing room on Tuesday looking for a similar display.
Sen. Richard Durbin (D-Ill.), chairman of the panel holding Tuesday’s hearing, told CNN that his hearing wasn’t a response to King’s hearing. Remarks and questions from Democratic senators on Tuesday focused on the protection of Muslim Americans.
“We must condemn anti-Muslim bigotry and make it clear that we won’t tolerate religious discrimination in our communities,” Durbin said at the hearing. “We can protect our nation and still protect the fundamental freedoms of our Bill of Rights.”
Republican senators said they support protecting the constitutional rights of Muslim Americans. But they said they also endorse strong efforts to combat homegrown terrorism.
“The only way to stop terrorists is to recognize where they’re coming from,” Sen. Jon Kyl (R-Ariz.) said. “Political correctness cannot stand in the way of identifying those who would do us harm nor can we ignore the First Amendment protections.”
Graham asked Perez whether radicalization is on the rise in the United States. The Assistant Attorney General said it was hard for him to say.
The DOJ has come under fire from Republicans, Democrats and the Muslim-American community for its handling of terrorism cases involving U.S. citizens. Last month, the American Civil Liberties Union and the Council on American-Islamic Relations filed suit against the FBI claiming the agency improperly targeted Muslims for surveillance.
FBI Director Robert Mueller told House members this month that the FBI attempts to be as open as it can about its actions in terrorism investigations. But sometimes the bureau can’t give details about the subjects of its investigations and the methods employed because it is classified information, he said.
Despite these issues, Mueller said his agency has a “very good relationship” with Muslim Americans.
On Tuesday, Perez said the DOJ is working to ensure that the rights of Muslim Americans are protected.
“We will continue to use every available tool in our law enforcement arsenal to transform this headwind of intolerance into a tailwind of inclusion and opportunity,” Perez said.
The Assistant Attorney General said the DOJ has a long history of protecting the civil rights of Muslim Americans, praising the work of R. Alexander Acosta, a U.S. Attorney and Assistant Attorney General for the Civil Rights Division during the George W. Bush administration.
Acosta, who also testified Tuesday, said protecting the rights of Muslim Americans is a bipartisan issue.
“Muslim Americans should take comfort in knowing the effort to protect religious liberties has been ongoing since 9-11, has transcended the partisan divide and I hope continues to transcend the partisan divide,” Acosta said.
Federal prosecutors in Colorado are seeking the death penalty against two inmates accused of killing other convicts in the “Supermax” federal prison, marking the first time in a decade that the Colorado U.S. Attorney’s office has pursued the death penalty.
U.S. Attorney John Walsh will seek the death penalty for Richard Santiago, 51, and Gary Douglas Watland, 48, according to The Denver Post. Santiago is accused of beating and kicking an inmate to death in 2005, while Watland is charged with stabbing a prisoner to death in 2008.
The Supermax, formally known as the administrative maximum security facility at Florence, houses some of the worst of the worst of federal prisoners. Among its residents are several terrorists, Theodore Kaczynski, the “Unabomber,” and Robert Hanssen, an FBI agent turned traitor.
Colorado federal prosecutors last sought the death penalty against cousins William and Rudy Sablan, who were accused of stabbing their cellmate, then removing his organs and putting them on display to warn other inmates, The Post said. Jurors in separate trials sentenced them to life in prison instead.
Philip James Degnan is about to become a very busy man.
Degnan, an Assistant U.S. Attorney for the District of New Jersey, was appointed today executive director of the New Jersey Commission of Investigation. The commission, established in 1968, is an independent state agency that investigates organized crime and public corruption in the Garden State. Degnan succeeds Alan A. Rockoff, who last month announced his intention to retire after serving eight years as the commission’s leader. Degnan will assume the helm of the commsission on May 9.
Degnan, 40, has served as an Assistant U.S. Attorney in Newark, N.J. since 2004 and was most recently assigned to the office’s National Security Unit. He also served as coordinator of an inter-agency Counterproliferation Working Group. Degnan, who also served as law clerks to two of the state’s judges and was in private practice, is a graduate of Davidson College and earned his law degree from Seton Hall University Law School in Newark
A Massachusetts man on Monday pleaded guilty to possessing a deadly toxin and threatening a federal prosecutor, the Boston Globe reported.
Michael Crooker, who has a lengthy criminal record, pleaded guilty to one count of mailing a letter containing a threat to injure a U.S. officer or employee and one count of possessing the toxin ricin without the required registration, the newspaper reported.
In 2004, Crooker attempted to send through the mail what appeared to be a homemade firearm silencer. After federal agents intercepted the package they raided his home in June 2004. During a search of his apartment, the agents found an apparent weapons lab that included several dangerous chemicals that could be used to make powerful explosives, according to the Globe. The discovery prompted the evacuation of the 50 residents living in Crooker’s apartment complex, the newspaper reported.
Upset by his arrest and agents’ raid of him home, Crooker in July 2004 sent a threatening letter to the Assistant U.S. Attorney handling his case in which he referenced Oklahoma City bomber Timothy McVeigh. Crooker wrote, “As Martyr McVeigh’s T-shirt says: ‘The Tree of Liberty must be refreshed from time to time by blood of patriots and tyrants.’ ’’ Crooker continued, “Bring on your [expletive] and I’ll bring on mine.’’
Crooker, who is scheduled to be sentenced June 20, faces up to 15 years in prison, and $500,000 in fines. Under the plea agreement, it will be recommended that Crooker serve the maximum 15-year sentence.
Sen. Charles Grassley (R-Iowa) on Monday said he was not happy with the Justice Department’s response to his queries about a Bureau of Alcohol, Tobacco, Firearms and Explosives policy that allowed guns to fall into the hands of Mexican drug cartels.
In a letter to acting ATF Director Kenneth Melson, Grassley wrote that a letter he received from Assistant Attorney General Ronald Weich of the DOJ Office of Legislative Affairs “was not an adequate response” to his questions about gun smuggling. Grassley, the top Republican on the Senate Judiciary Committee, said he wants Melson to respond to questions he asked the Director on March 4 about whether ATF operations contributed to the shooting of Immigration and Customs Enforcement Special Agent Jaime Zapata, who was killed in Mexico in February.
Weich wrote in his March 8 letter to Grassley that he directed the senator’s letter to DOJ acting Inspector General Cynthia Schnedar, who is investigating the ATF policy. In a letter to Kevin Perkins, the head of the Integrity Committee of the Council of Inspectors General on Integrity and Efficiency, Grassley wrote that Schnedar shouldn’t conduct the probe because acting inspectors general are caretakers and may not have the tools to conduct thorough investigations.
The Justice Department is under pressure to provide all information about its gun smuggling investigations. Rep. Darrell Issa (R-Calif.), chairman of the House Oversight and Government Reform Committee, has started his own probe. And Mexican officials have opened their own criminal investigation into the same subject.
The law firm of Latham & Watkins LLP named former Assistant Attorney General Alice Fisher the managing partner of its D.C. office, the Washington Business Journal reported Monday.
Fisher has been at the firm since she resigned as the Assistant Attorney General for the Justice Department Criminal Division in 2008. She replaces Eric Bernthal as the managing partner at the D.C. office. Berenthal will stay at Latham & Watkins.
Fisher has been at Latham & Watkins for 10 years, spending two prior stints at the firm from 1996 to 2001 and 2003 to 2005. At the firm, Fisher has handled white-collar criminal matters, including Foreign Corrupt Practices Act cases.
“Washington may be one of the most interesting business environments in the country: clients are often not only looking for the high-level legal advice and depth of expertise that they’ve come to expect from Latham globally, but also particular expertise to address regulatory and other government-facing concerns,” Fisher told the Washington Business Journal.
Fisher worked on various high-profile matters while she served in the public sector.
After becoming Assistant Attorney General in 2005, she oversaw the investigation into former lobbyist Jack Abramoff. From 2001 to 2003, Fisher was a Deputy Assistant Attorney General in the Criminal Division, serving under then-Assistant Attorney General Michael Chertoff and working on terrorism matters.
Prior to joining Latham & Watkins in 1996, Fisher aided Republicans in the Senate’s probe into the Whitewater controversy involving then-President Bill Clinton.
The FBI tapped a former Army pilot who was portrayed in the 2001 film “Black Hawk Down” to lead its Denver office, The Denver Post reported Monday.
James F. Yacone (FBI)
James F. Yacone joined the FBI in 1995 after serving eight years in the Army. He piloted a UH-60 Black Hawk helicopter for a mission in Somalia in 1993, earning him a Silver Star and inspiring a book and the film.
Yacone was a FBI Critical Incident Response Group section chief before his appointment as the Special Agent in Charge of the FBI Denver Division. He worked on hostage and other crisis matters across the county as a leader in the FBI Critical Incident Response Group.
From 2007 to 2009, Yacone was an Assistant Special Agent in Charge of the FBI Richmond Division National Security Branch after spending a year as the head of the FBI’s Aviation and Surveillance Branch.
He started at the FBI Philadelphia Division in 1995 as a Special Agent and went on to serve in the FBI’s Critical Incident Response Group, rising to Supervisory Special Agent and then Unit Chief.
Yacone succeeds James Davis, who was tapped in January to head the Colorado Department of Public Safety.
For the second time in less than a week, Richard Scrushy (federal prisoner No. 24463-001) is in the news, and in a way that really hits close to home.
Scrushy, it will be remembered, was a co-founder of HealthSouth, the big provider of rehabilitative services for in-patient care. He was charged with a multibillion-dollar accounting fraud in connection with the company and was acquitted in 2005. But he couldn’t stay out of trouble, being convicted two years later in an unrelated political-bribery case.
We reported briefly on U.S. v. Scrushy last week, in a rather unlikely context, the insider-trading trial of Raj Rajaratnam, the billionaire high-roller founder of the Galleon Group LLD hedge fund. We noted that an essay on Westlaw News & Insight and Reuters Legal outlined reasons that Rajaratnam might be encouraged by Scrushy’s acquittal.
Scrushy had the deep pockets to spend a pile on his defense in U.S. District Court for the District of Alabama, just as Rajaratnam is able to do on his defense in U.S. District Court for the Southern District of New York. Scrushy’s prosecutors relied on a lot of people who had already pleaded guilty and were cooperating, just as the SDNY prosecutors are doing. Scrushy had an FBI wire to overcome, while Rajaratnam’s defense is faced with a bunch of wiretaps.
The lesson in Scrushy’s acquittal in the HealthSouth criminal trial was that “even seemingly powerful government cases can go off track,” the essay argued.
Okay. But Scrushy was still found liable in a civil trial and ordered to pay $2.87 billion to HealthSouth shareholders. That’s a lot of money, even for a guy who was once able to afford all the boy toys he wanted.
And so came one more indignity. As Scrushy languished in a federal prison in Beaumont, Tex., where he is serving seven years for the political-bribery conviction, there was gigantic yard sale at his estate in Birmingham, Ala., where his belongings were auctioned off to pay at least a portion of the $2.87 billion, as The New York Times reported.
The event was well attended. As The Times observed: “Some came for vindication and others as voyeurs, but most were there for the values.”
The National Law Journal on Monday published its list of most influential lawyers, including several former Justice Department attorneys and federal prosecutors.
Among the honored attorneys is Carolyn B. Lamm, currently a partner at White & Case LLP. She previously worked under the Attorney General’s Program for Honor Law Graduates and served as a trial attorney in the Fraud Section of the Civil Division before being named Assistant Director of the Commercial Litigation Branch of Civil Division.
In addition, Dan Webb, now a partner at Winston & Strawn LLP, served as the U.S. Attorney for the Northern District of Illinois. Webb headed the Chicago-based district in the mid-1980s.
Meanwhile, Ted Ullyot served as chief of staff to Attorney General Alberto Gonzales in 2005.
Another DOJ alum is Abbe Lowell. Currently a partner at McDermott Will & Emery, Lowell served at DOJ from 1977 to 1981 as a Special Assistant U.S. Attorney, Special Assistant to the Deputy Attorney General and Special Assistant to the Attorney General.
Richard Marmaro also made the list. Now a partner at Skadden, Arps, Slate, Meagher & Flom LLP, Marmaro previously was on the faculty of the Attorney General’s Advocacy Institute at DOJ, where he helped train Assistant U.S. Attorneys. He also served as an Assistant U.S. Attorney in the Central District of California. During his tenure he worked as an Assistant Chief of the Criminal Division.
The final former DOJ official who made the list was Reid Weingarten. The Steptoe & Johnson LLP partner previously served as a trial attorney for the Public Integrity Section at DOJ.
The full list:
Alternate Dispute Resolution
- Carolyn Lamm | White & Case LLP
- David Rivkin | Debevoise & Plimpton LLP
- John Trotter | JAMS
Finance And Capital Markets
- Joseph Kaufman | Simpson Thacher & Bartlett LLP
- William Sweet | Skadden, Arps, Slate, Meagher & Flom LLP
- Richard Truesdell | Davis Polk & Wardwell LLP
Government Affairs
- Robert Bauer | White House Counsel
- Thomas Hale Boggs Jr. | Patton Boggs LLP
- Joel Jankowsky | Akin Gump Strauss Hauer & Feld LLP
- Lisa Rickard | U.S. Chamber Institute For Legal Reform
Healthcare
- Elizabeth Fowler | White House’s National Economic Council
- Douglas Hastings | Epstein Becker & Green PC
- Eric Zimmerman | McDermott Will & Emery
In-House Attorneys For Private Companies
- Alberto Mora | Mars Inc.
- Jonathan Oviatt | Mayo Clinic
- Theodore (Ted) Ullyot | Facebook Inc.
Law Firm Leadership
- Eric Friedman | Skadden, Arps, Slate, Meagher & Flom LLP
- John Quinn | Quinn Emanuel Urquhart & Sullivan LLP
- Dan Webb | Winston & Strawn LLP
Media And Entertainment
- Dale Cendali | Kirkland & Ellis LLP
- Bertram Fields | Greenberg Glusker Fields Claman & Machtinger LLP
- Schuyler Moore | Stroock & Stroock & Lavan LLP
Real Estate
- Martin Edelman | Paul, Hastings, Janofsky & Walker LLP
- Jonathan Mechanic | Fried, Frank, Harris, Shriver & Jacobson LLP
- Jeffrey Steiner | DLA Piper
Trusts And Estates
- Dennis Belcher | McGuireWoods LLP
- Carol Harrington | McDermott Will & Emery
- Pam Schneider | Gadsden Schneider & Woodward
White-Collar Defense
- Robert Cary and Brendan Sullivan Jr. | Williams & Connolly LLP
- Abbe Lowell | McDermott Will & Emery
- Richard Marmaro | Skadden, Arps, Slate, Meagher & Flom LLP
- Reid Weingarten | Steptoe & Johnson LLP
- Theodore Wells Jr. | Paul, Weiss, Rifkind, Wharton & Garrison LLP
This post has been updated.
