Can it be true?
Corporations are fed up with voluntarily disclosing wrongdoing to the government?
And they may be ready to challenge the Justice Department and the Securities and Exchange Commission (SEC)?
In court?
We’ve been hearing this now for a number of months.
And so has David Krakoff.
Krakoff is a partner at BuckleySandler in Washington, D.C.
“The sense that I’m getting from talking to clients and companies – they are today considering in a more substantial way than before whether or not to go to trial and also whether or not to make a voluntary disclosure,” Krakoff told Corporate Crime Reporter in an interview last week.
“More companies are considering – voluntary disclosure may not get you what you want at all.”
“The implications of voluntary disclosure are extensive in a company. There is the impact on morale when you have to work with the government.”
But if you don’t disclose, under the whistleblower provisions of Dodd-Frank, an employee can blow the whistle and cash in.
“We haven’t seen the full implications of the whistleblower provisions,” Krakoff said. “I know from what I read there have been many whistleblower reports. But I don’t think we have seen yet the full implications of what Dodd-Frank means.”
“But I don’t disagree about the other side of the coin. They may not think they are getting that much for disclosure, but can they afford not to disclose?”
And while corporations are seriously questioning whether to defend themselves in court against the SEC and the Justice Department, individual executives are not hesitating.
“We are going to see more and more trials of executives,” Krakoff said. “We have seen these trials now over the last two or three years. And individual executives are more willing to take on the government. And their companies have been willing to support their defenses. So, we are going to see more trials in the future.”
Krakoff knows of what he speaks.
He recently represented John Mushriqui in the Africa Sting case.
“We are extremely pleased that the Department of Justice has decided to do the right thing by moving to dismiss the indictment against our client John Mushriqui, ending his two year nightmare,” Krakoff said last month. “We recognize that this was a difficult decision given the substantial resources that the government invested in this case. It’s really hard to take on the government, but when you believe in your innocence and fight for your freedom, these cases can be won. Ultimately, the system worked for John Mushriqui. John can start the rest of his life today with his good name intact.”
And he’s currently representing Mark A. Jackson, former Chief Executive Officer of Noble Corp. against FCPA charges brought by the SEC.
“We unequivocally deny the SEC’s baseless allegations,” Krakoff said in a prepared statement last month. “Mr. Jackson will vigorously defend himself in court where the evidence will show what the SEC already knows, that at all times Mr. Jackson acted in good faith at Noble. He looks forward to clearing his good name in this proceeding.”
Early in his career, Krakoff worked at big law firms – Skadden Arps and Mayer Brown among them.
But he joined BuckleySandler in 2010 and likes the smaller firm feel.
“BuckleySandler is known as one of the leading firms in the country representing financial services companies,” Krakoff said. “Andy Sandler and Ben Klubes started the firm in 2009 with Jerry Buckley when Andy and Ben left Skadden Arps with their financial services practice.”
“I had worked with Ben and Andy back at Skadden 20 years ago. That’s how we came together.”
“There is a substantial amount of litigation in the financial services industry. When the firm was formed, Andy and Ben wanted to have a substantial white collar practice.”
“Sam Buffone, head of the white collar group at Ropes & Gray, joined the firm in 2010. I joined with my colleagues from Mayer Brown several months later.”
“We have a substantial and wide ranging white collar practice that involves a lot more than the traditional criminal matters.”
“Many of our cases involve enforcement in the financial services industry that is either administrative or in federal court.”
“We started with 30 to 35 lawyers in 2009. We are all big firm refugees. We are people from Skadden Arps, from Wilmer, from Goodwin Procter, from Mayer Brown, from Ropes & Gray. And I think the reason is that clients want the best lawyers to do their work.”
“And the names of firms are less important today than they were in the past. Clients really want the top lawyers to provide legal services to them. You don’t have to be in a firm of 1,500 lawyers in order to do that. That’s our stock in trade. We try and provide superior services. And we have a more non-traditional law firm. It’s not as hierarchical. We know all of our partners. The partners meet every week. We are very involved in all of our matters.”
“We have a very strong esprit de corps. So, you can provide top legal services, but also have the kind of comraderie that is so important to every lawyer in the practice of law. And that level of comraderie is something that clients like. And it allows us to provide better services to our clients. As a firm, we get to know our clients. And we listen to them. We learn from them.”
“As a firm that is very focused on financial services and white collar, we can quickly demonstrate our expertise to clients in both of those very important parts of our law firm.”
[For the complete q/a transcript of the Interview with David Krakoff, see 26 Corporate Crime Reporter 11(13), March 12, 2012, print edition only.]