“Knock-Knock.”“Who’s There?”

“The Feds.”

J. Mitchell LittleScheef & Stone, LLP

Purpose of This Discussion

To provide you with tools to prevent things from getting worse when your client is “bumped” by a federal agency like the SEC, FBI, CFTC, etc.

To remind you of Rule #1: “If you look like food, things will try to eat you.”

To remind you of the civil/criminal overlap and how that affects your O-O-D-A loop.

To understand the “origin story” of your client’s problem and how that affects outcome.

Types of “Bumps”

Phone Call with Lawyers Only Phone Interview Informal Request for Documents Subpoena Request for OTR Call-In Raid

“What are my clients’ rights?”

Tools of the Trade

Witnesses (Prepare and control) Allegiances (Win friends and influence people) Tempo (Fast or Slow?) Electronic Documents (Pace of production, rolling

vs. dump) Rights (5th Amendment)

“If you look like food, things will try to eat you.”

Criminal/Civil Overlap

Every single SEC case has a criminal referral. Not true with CFTC.

FBI moves very slowly. Secret Service does not. When do you plead the 5th and why or why not? What are some signs larger forces are at work? What depth are you competent to swim in?

Could You Play with the Government?

Why is Origin Significant?

How did you get here, or, more importantly, who got you here?

Is there an informant/whistleblower? Is there a complainant/victim? Negative news coverage? Did you do something public (filing, statement)? How did they see you? Did you choose the wrong friend/business partner?

Examples of Origin Stories

Investor Complaint (Gurgainers) Angry Ex-wife (anonymous) Internet message board (Revelation Forex) Google Hits (various) Bad business partner walk-back (various) Bad sales lead (various) Sister agency investigation/triage (various) Undercover (Prosper Oil and Gas) Angry ex-employee (various)

What Are Possible Outcomes?

Nothing Protracted Investigation Termination Letter Business Modifications Receivership Prison Settlement/Sanctions Conduct-Based Injunction and Disgorgement Protracted Litigation Successful/Unsuccessful Jury Verdict A Suicidal Client and His Unpaid Lawyer/Law Firm