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The business of representing snitches may not be pretty — and many lawyers refuse to do it at all — but for Reed Smith’s Marc Powers, it makes for a pretty good niche practice. Powers, a former enforcement branch chief in the New York office of the Securities and Exchange Commission, has represented informers in some of the highest-profile stock scandals of the last decade. In that niche, there’s no one better to represent right now than Powers’ current star client, Douglas Faneuil, the 27-year-old former Merrill Lynch & Co. Inc. stockbroker assistant who is the key witness in the government’s insider trading investigation of style maker Martha Stewart. When Faneuil voluntarily came forward to testify against his former boss, he landed himself and Powers in the spotlight. It’s a place where Powers should feel comfortable by now. In the investigation of former Kidder, Peabody & Co. securities trader Joseph Jett, he represented an aide to Jett who provided information to the SEC. He later counseled a witness in the government’s antitrust probe of U.S. options exchanges. As a former SEC enforcer, Powers is well suited to represent government informants, whether they come forward voluntarily or — more often the case — when forced to by subpoena or brokerage regulations. But it’s his paternalistic instincts and penchant for inviting would-be white-collar criminals into his home for dinners and out for cocktails that sets Powers apart. For example, the weekend before the Martha Stewart scandal broke, he advised Faneuil not to go to the Hamptons or return home. Instead, he arranged a hotel room for Faneuil and sent friends to retrieve some of the young trader’s belongings from his apartment. Powers and his children had Faneuil over for a pasta dinner the next Sunday. Faneuil, who was facing possible felony charges, pleaded guilty to a misdemeanor for accepting gifts to withhold information about Stewart’s sale of her stock in ImClone Systems Inc. Powers’ social graces stem from what he says is a deep sense of compassion. Says Powers: “I know my clients aren’t all model citizens, but show me a New Yorker who wants to hold themselves out [as one].” Not every lawyer is as upbeat about representing government witnesses. For one, representing cooperative witnesses is often much less lucrative than representing the noncooperative targets in a government probe, says Walter Brown, a defense lawyer in the San Francisco office of Palo Alto, Calif.-based Gray Cary Ware & Freidenrich, who represents both kinds of clients. Likewise, Roman Darmer of Washington, D.C.’s Howrey Simon Arnold & White says that he saw many lawyers back away from clients who decided to testify for the government while he was an Assistant U.S. Attorney in the Southern District of New York. “Even if the client is ready, willing and able to collaborate, you’re still relying on the government’s good faith to file that motion,” says Darmer, referring to the formal steps required under the federal sentencing guidelines to cut a witness a break. And then there are defense attorneys who balk at representing “rollovers” on principle. Harold Rosenthal, a criminal lawyer at San Francisco’s Riordan & Rosenthal, represents snitches on occasion — holding his nose all the while. “It’s an ugly thing,” he says. “You have individuals who seem to be friends and have loyalty for one another testify against each other. It’s one of the more nauseating aspects of the law.” Powers has a stronger stomach for the work, but he certainly does not want to be pigeonholed. He represents defendants at least as often as informers. And he also represents some of Reed Smith’s institutional clients on matters before the SEC. At least those kinds of clients don’t expect to meet the lawyer’s kids at Sunday dinner.

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