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I’ve got a new post up at Cato at Liberty about the Second Circuit’s sharply worded dismissal of two insider trading convictions, which alas came too late to avoid massive damage to the enterprises and people concerned. Quoting NYT “DealBook”:

The dismissal of the case also raises questions about the November 2010 raids of Level Global and Diamondback Capital Management by the Federal Bureau of Investigation. Soon after the raid on Level Global, the hedge fund, which was started by Mr. Chiasson and David Ganek, shut down, in part because of requests by investors to redeem their money after the raid. Mr. Ganek was never charged with any wrongdoing by federal authorities.

Diamondback, where Mr. Newman was a portfolio manager, continued to operate for another two years, but it decided to close its doors in December 2012 after receiving a wave of investor redemptions.

Mr. Ganek chided the government in a statement on Wednesday. “For the dozens of my high-integrity colleagues at Level Global who lost their jobs and their reputations because the F.B.I. improperly raided our firm in this now-discredited fishing expedition, today’s legal vindication is a reminder how prosecutorial recklessness has real impact on real people,” he said.

Raids, as opposed to subpoenas and other dull ways of obtaining information sought in an investigation, are irresistible to the press — and they greatly reinforce the public impression that there must have been serious wrongdoing at a target enterprise. That in turn can spell doom especially for financial undertakings, whose business will often be built on client and public trust. And if the case subsequently fails to stick by the evidence or the law, well, it’s on to the next prosecution, right?

More from Stephen Bainbridge and from Ira Stoll (more), who unlike many in the press gave skeptical attention to the case throughout its course.

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Three columns to read on the subject: Gene Healy, Glenn Reynolds (linking this site), and Nat Hentoff (like Healy, a Cato colleague) in his syndicated column (thanks for mention). I had a letter to the editor yesterday in the Frederick News-Post drawing connections with local lawmakers (as well as a blog post at Free State Notes with similar themes) and the Arizona Republic quoted me Tuesday on the federal subsidy programs that drive militarization, including transfers to the ever-controversial Maricopa County Sheriff’s Office of Joe Arpaio. Earlier here, here, here, here, here, etc.

P.S. Also quoted on NPR.

I’ve got an update on the fast-developing scandal of evidence destruction at the IRS in my new Cato post (earlier). If not for reading Kim Strassel and her colleagues at the Wall Street Journal, I might not have learned that Lois Lerner’s emails got wiped from her hard drive by forces unknown about 10 days after the letter arrived from House Ways & Means inquiring into targeting of political opponents.

Since the new round of disclosures in the IRS scandal broke a week ago, the WSJ has shown itself willing to dig in a way that many other prestige press institutions have not. “People used to ask how Watergate might have turned out if the press had sided with Nixon instead of against him. Thanks to the work of Strassel and her WSJ colleagues, let’s hope we never find out.”

The Economist covers the story in this commentary. Our tag on evidence spoliation and document retention — lawyers among our readers will be familiar with how very seriously these concepts are taken in the world of litigation — is here.

Welcome readers: Glenn Reynolds/Instapundit.

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“It is a truism that laws tend to be arranged for the benefit of the political class.” Even so, would you expect Connecticut law to provide that private employers must hold open the jobs of full-time elected officials for as much as eight years in case they decide to return? My new blog post at Cato has details.

The Chamber has been tracking this major engine of contingency-fee litigation as it jumps from federal practice to the realm of similar state laws vigorously lobbied for by the plaintiff’s bar. I have an opinion piece in the Baltimore Business Journal on the Maryland version, which 1) nearly passed this year, 2) would go further than the federal law in some vital respects, and 3) has become an issue in a closely watched primary contest.

There’s a lot of amusement about the pair of vultures (real ones) who’ve taken up residence on Washington, D.C.’s K Street. In a new Cato post, I explain what attracts them.

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I’ve got a longer write-up at Cato at Liberty (earlier) on the extraordinary outcome of a federal investigation into larcenous raids on bodegas by Philadelphia narcotics cops pursuant to sales of banned plastic zip-lock bags: U.S. Attorney Zane David Memeger has closed the case without charges, the statute of limitations now having run.

This was a story that really got to me on many levels, as with this passage from the Philadelphia Daily News’s coverage: “Anh Ngo, like the Nams, said that she was never interviewed by investigators about what unfolded in her family grocery store in the Lower Northeast during a 2008 raid. Ngo, 30, said the officers smashed the [security surveillance] cameras with a sledgehammer and stole about $12,000, taking her mom’s diamond ring and emptying their wallets.” They took her mother’s ring! “‘To think that some light was shined on this by the Daily News and then the investigation just died, it’s really very frustrating,’ she said…. ‘[The cops] are living nice off of the money they stole from us.'” Notes one journalist: “The shop owners were all legal immigrants. None had criminal records. Nor had they ever met – they hailed from four corners of the city and spoke different languages.” Yet they told essentially the same stories.

The local press, specifically the Philadelphia Daily News, did everything one could reasonably wish to bring the story to light. In fact reporters Barbara Laker and Wendy Ruderman won a Pulitzer Prize for their investigation, “Tainted Justice,” and in March published a book on the scandal. The paper’s coverage of the dropping of charges has been likewise hard-hitting, including video of a bodega raid. In the end, none of it seemed to have worked in obtaining justice for the store owners.

I go on in the Cato piece to ask a few other questions about whether laws banning common items like mini-zip-lock bags are really a good idea given that they readily allow police to obtain search warrants against unsuspecting businesses; and whether we insist that store owners like these organize to defend their interests in the political process because the legal process will afford them no protection. Read it here.

And one other question: If we told these immigrant store owners that the American legal system works, would they believe us?

P.S. Internal police department discipline? The local Fraternal Order of Police union, according to its president, has been “standing behind the officers from the minute it happened.” Some don’t expect much:

“This is no big deal,” [the president of the police union lodge] said. “They’ll be handed some discipline and we’ll probably win in arbitration. . . . I don’t see anyone losing their jobs.”

On the other hand

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Unpaid internships are standard practice at the White House, on Capitol Hill, and in political campaigns. Should they be banned for private-sector employers? I answer “no” in a new U.S. News “Debate Club” also featuring a contribution by Dan Rothschild of R Street Institute as well as contributions by three advocates of a ban. Excerpt of mine:

With eyes wide open, students with many options have long sought out voluntary unpaid internships because they’re an arrangement that can rationally benefit both sides.

In an Auburn University working paper last month (via), four economists reported on a study that found internship experience was associated with a 14 percent increase in the rate at which prospective employers request interviews of job seekers. As a predictor of the rate of callbacks, an internship on the resume actually worked much better than a business degree itself.

Yet class-action lawyers and labor activists now attack internships as — in the trendy, elastic new term — “wage theft.” These same lawyers and activists go to court demanding millions of dollars retrospectively over arrangements both sides understood perfectly well at the time to be unpaid — and think shakedowns like these should *not* be called “theft.” …

In modern America, it’s never more than a short jump from “this set-up isn’t for everyone” to “let’s ban it.”

I go on to discuss the sclerosis of the European job market, especially when it comes to youth employment, and observe that the “campaign against internships is part of a wider campaign against low-pay work options in general — call it a campaign to get rid of any stepping stones in the stream that aren’t sturdy enough to support a whole family.” And I note the curious contrast with higher education pointed out by my colleague Andrew Coulson: “Paying to Learn Nothing = Legal. Paying Nothing to Learn = Illegal.” Earlier coverage here. And adapted with additional material into a longer Cato version here.

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Last week the Department of Justice announced a deal with Toyota in which the Japanese automaker would fork over $1.2 billion and place itself under supervision for allegedly not being forthcoming enough with information at the height of the 2009-2010 panic over claims of unintended acceleration in its cars. The acceleration claims themselves had turned out to be almost entirely bogus, and were refuted in a report from the federal government’s own expert agency, NHTSA. Instead, the prosecution relied on a single count of wire fraud: Toyota had supposedly given regulators, Congress and the public an erroneously positive view of its safety efforts. It should therefore have to “forfeit” a huge sum supposedly related to the volume of business it did over a relevant period.

I’ve got an opinion piece in Monday’s Wall Street Journal (unpaywalled Cato version here, related Cato post here) about this whole appalling affair, which should frighten other businesses that might face draconian charges in future not just for compliance infractions, but more broadly for defending their products in the court of public opinion. Meanwhile, the Justice Department’s grandstanding and demagogic press release goes to some lengths to leave the impression “that unintended acceleration is some mysterious phenomenon of auto design unrelated to flooring the accelerator.” Someone here is irresponsibly misleading the motoring public and withholding vital safety information, but it’s not Toyota.

A few related links: NHTSA unintended acceleration report, Car & Driver’s coverage, and my 2010 opinion piece. And Holman Jenkins at the WSJ (paywalled) compares the still-unfolding story of ignition problems at GM, also discussed by Paul Barrett at Business Week.

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A bill introduced by three members of the New York Senate would require parents of schoolchildren to attend four workshops aimed at sharpening their “parenting skills,” as a condition for their kids’ advancing to the seventh grade. I’ve got details in a new post at Cato at Liberty (& Patheos’s Terry Firma).

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Super Bowl ads in review

by Walter Olson on February 3, 2014

A Georgia lawyer aired an ad bizarre enough that it’s made the rounds of the legal sites:

More from Lowering the Bar (“As Rolling Stone suggests, it is a little problematic that the ad depicts him desecrating a grave and smashing a grave marker, even if he does it with a flaming sledgehammer named after his dead brother and to a badass metal soundtrack.”)

Meanwhile, over at Cato at Liberty, I’ve got a commentary on the Coca-Cola ad with at least a tangential relation to language law, the legacy of Teddy Roosevelt’s Progressives, and the gracefulness of being good winners regarding the success of English assimilation.

Suing over a study

by Walter Olson on January 7, 2014

I’ve got a short piece in the January Reason on the story (covered earlier here and here) of the lawyer who decided to sue a scientific journal publisher and the authors of a clinical report because the findings in the article made it harder for him to win personal injury lawsuits.

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I’ve got a new op-ed for Bloomberg View (first time I’ve appeared there) calling last week’s venture in presidential clemency “mingy and belated” and, if aimed at prison overcrowding, “like trying to bail out Lake Michigan with a paint can.” On Thursday President Obama commuted the sentences of eight inmates caught up in the crack cocaine sentencing fury, all of whom had already served at least 15 years for what were often relatively peripheral involvement in the drug trade. Clarence Aaron, for example, was serving three life sentences without possibility of parole for a first-time nonviolent offense. Many advocates from all political viewpoints pushed for Aaron’s release, among them Debra Saunders who wrote dozens of columns on his case in the San Francisco Chronicle over the past 12 years (Also in Minneapolis Star-Tribune and other papers, and AP roundup of opinion columns; & Scott Greenfield, Pardon Power).

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I’ve now got a guest column at PointOfLaw.com on the Securities and Exchange Commission’s proposed rule (earlier) requiring public companies to calculate and make public the ratio between chief executive officer (CEO) pay and the pay of a median worker. For companies with international operations in particular, the calculation may be quite difficult (it might depend on assumed exchange rates, for example, to say nothing of noncash benefits) and it might also depend on the ability to gather in one place certain types of data whose export is forbidden by some privacy-sensitive foreign laws. And all for what, aside from stoking demagogy? Or was that the point of the Dodd-Frank mandate that the SEC is now implementing?

I have fond memories of launching Point of Law during my years at the Manhattan Institute, and I was its primary writer for many years, so it is especially rewarding to contribute a guest column there. Under the leadership of MI’s Jim Copland, the site (and MI in general) has become especially active in corporate governance, shareholder and SEC controversies.

I’ve got a new piece at Reason.com expanding on my earlier reports on the new pilot program by which Facebook will give Maryland school officials a dedicated channel with which to seek takedown of posts and other material that in their view contributes to the problem of “cyber-bullying.” I think the program represents a disturbing step toward a wider government role as arbiter of what is allowed to be said in social media, the more so as it will be difficult or impossible to know whether takedown decisions at Facebook’s discretion are an entirely neutral application of the service’s “Community Standards” or are swayed in part by the wish to keep government bodies happy. I quote various press accounts, some affording additional insight into the existing and proposed takedown process, as well as commentary by Scott Greenfield, TechDirt, and the Daily Caller in which I’m quoted. Some additional commentary: Joy Pullmann/Heartland, Josh Blackman. More: Instalanched, thanks Glenn Reynolds.

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The Maryland high court recently declined an invitation to discard the common-law rule against server liability in a case where a patron of a Gaithersburg craft brewery got on the road and caused a fatal accident. Washington Post columnist Robert McCartney wrote in favor of the wider liability rule, and I responded in a letter to the editor just posted at the newspaper.

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Having to watch what bad government has done to my home city of Detroit is a bit like Princess Leia having to watch her home planet destroyed. The fate of the Motor City, writes John Steele Gordon, is America’s “greatest urban disaster that didn’t involve nature or war.” But wait: here’s distinguished New York Times columnist Paul Krugman to inform us that it’s not “fundamentally a tale of fiscal irresponsibility … For the most part, it’s just one of those things that happens now and then in an ever-changing economy.” Just one of those things! I reply — with a hat tip to Cole Porter — at Cato at Liberty. (& George Leef (“A tornado is ‘just one of those things’ because is has no human cause. When a city goes bankrupt, it has many human causes”), Ed Driscoll)

P.S. On the role of long-serving mayor Coleman Young, see pp. 12-13 of this Ed Glaeser/Andrei Shleifer paper (PDF). And here’s a HuffPo tag on Detroit corruption.

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In my new CNN.com piece I argue that we shouldn’t let anger over the Zimmerman acquittal shred the rights of criminal defendants: “awarding new powers to prosecutors will likely mean that more black people will end up behind bars.” [CNN](& Steele; thanks for Instalanche to Glenn Reynolds)

P.S. Some may wonder whether a toughening of hate crime laws might be an exception to the general rule that minorities have much to fear from a broadening of grounds for prosecution. Leaving aside whether the hate crime issue has any relation to the Martin/Zimmerman case (few lawyers believe Zimmerman could be found guilty of a hate crime, and when the FBI investigated him last summer it found no evidence of racial motivation; more on this from Michelle Meyer), per FBI statistics for 2011, blacks are actually overrepresented among persons charged with hate crimes, at 21 percent compared with 14 percent of general U.S. population.

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