Every securities and white collar criminal defense attorney is aware of the problems in dealing with the SEC when there is a potential criminal proceeding. The existence of a potential indictment for the actions that the SEC is investigating is a significant problem. Your client settles the SEC case, cooperates with the SEC, and then gets indicted.
Most of us assume that the SEC is giving all of our client's information to the US Attorney, and proceed accordingly. However, even the best laid defense plans can backfire.
While turning over information to the US Attorney is probably perfectly legal, it is unseemly, and certainly unfair. Truth on the Market, a new blog by a group of law professors, addresses the issue and a related issue of "perjury traps" where the SEC and the DOJ get together before the SEC takes a witnesses testimony, to set the witness up.
After all, an obstruction or perjury case is much easier to prove than the underlying crime, so why not set the defendant up for a lay-up?
