X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Senior U.S. District Judge D. Lowell Jensen didn’t get through questioning a fourth prospective juror Tuesday before the issue came up. Looking for 16 people to sit for a trial involving allegations of financial fraud at a publicly traded company, Jensen, of the Northern District of California, asked Michelle Burton if she could be fair to the defendant. No, Burton said. “Given the nature of the charges in this case, it may not be possible to be impartial.” Today begins a new trial in an old criminal case involving the former Media Vision Technology Inc., and whether it inflated its financial picture by improperly recognizing revenue. Five former executives have struck plea bargains with the government, leaving former Chief Financial Officer Steven Allan as the lone defendant. Last year, a jury hung on the charges against Allan. But with a daily drumbeat of ugly accounting revelations, Fifth Amendment pledges and shrinking stock prices, it’s a whole new world for white-collar defense attorneys. “It makes me very, very nervous and very scared to have my client going to trial at this time,” Allan’s lawyer, New Orleans-based Arthur Lemann III, told the 69-person jury pool. Lemann was careful in his questioning, making each person in the jury box agree that they were “not going to be overwhelmed by what’s going on, and this publicity” about Enron, Arthur Andersen, WorldCom and a high-profile speech by the president Tuesday calling for stiffer penalties against corporate executives who commit financial crimes. In 1994, a newspaper columnist called into question Media Vision’s reported sales, and the company began a long slide into bankruptcy. It was eventually forced to restate its earnings, and the stock became worthless after trading as high as $46.50 a share. In 1998, several executives were indicted on mail and wire fraud charges related to the scheme. Some were also sued by the Securities and Exchange Commission for insider trading. The case was one of the earliest examples of Silicon Valley financial shenanigans that the U.S. attorney has pursued more aggressively in recent years. Leslie Caldwell, the former head of the Securities Fraud Unit in San Francisco, now leads the Justice Department investigation into Enron Corp., but the office has continued with a string of indictments. Allan is being prosecuted this time by assistant U.S. Attorneys John Hemann and Miles Ehrlich. Any anti-corporate sentiment helps them, but in Lemann they’ll have a worthy foe. Lemann, who sports a gold chain across his belly looped through a buttonhole in his vest, is the author of “Hail to the Dragon Slayer,” a book about his exploits as a Southern defense attorney. The book comes with dust jacket endorsements from two other notable characters, James Carville and Gerry Spence. Lemann has represented grave robbers, reputed mob figures, rave promoters charged under federal “crackhouse” laws, and recently an ex-felon whose ties to a local judge are under investigation. He brought two cousins with him to help him try to win Allan’s acquittal. Normally, finding jurors to sit in white-collar criminal cases is a tricky proposition anyway. A rule of thumb is that defense attorneys want jurors skeptical of authority, and therefore the government. But some may see corporate executives as authority figures themselves. Mix in a climate where many have taken a huge hit in the stock market, and the task starts to seem nearly impossible. “Given the executive bashing that is going on these days and the empathy with law enforcement since Sept. 11, a defense attorney going to trial in a criminal revenue recognition case will have to be worried about how jurors would react,” said O’Melveny & Myers partner Daniel Bookin, a white-collar defense specialist. Walter Brown Jr., a partner at Gray Cary Ware & Freidenrich, said lawyers should seek sophisticated jurors who can look at a case without emotional interference. He also would use voir dire to quiz the jury pool on its experience with the stock market. On Tuesday, some jurors were queried about just that. But Brown, like others, says the public is absolutely looking at corporate executives with a jaundiced eye. “I think there’s a recognition that there is an unprecedented level of distrust in the capital markets and distrust in the executives of publicly traded companies, and in the financial statements of publicly traded companies,” Brown said.

This content has been archived. It is available exclusively through our partner LexisNexis®.

To view this content, please continue to Lexis Advance®.

Not a Lexis Advance® Subscriber? Subscribe Now

Why am I seeing this?

LexisNexis® is now the exclusive third party online distributor of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® customers will be able to access and use ALM's content by subscribing to the LexisNexis® services via Lexis Advance®. This includes content from the National Law Journal®, The American Lawyer®, Law Technology News®, The New York Law Journal® and Corporate Counsel®, as well as ALM's other newspapers, directories, legal treatises, published and unpublished court opinions, and other sources of legal information.

ALM's content plays a significant role in your work and research, and now through this alliance LexisNexis® will bring you access to an even more comprehensive collection of legal content.

For questions call 1-877-256-2472 or contact us at [email protected]

 
 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.