John Carney, a partner in Baker Hostetler's New York office and co-leader of the firm's national White Collar Defense and Corporate Investigations group, was quoted in the November 5, 2009, Forbes.com article, "Feds' New Insider Trading Target: Lawyers."
According to the article, two of the 14 defendants arrested in the government's latest Galleon Group-related insider trading bust are New York lawyers who allegedly accepted cash to funnel information on three 2007 corporate acquisitions to a one-time employee of the hedge fund. Galleon's founder, Raj Rajaratnam, was arrested on separate insider trading charges last month, according to the article.
"The U.S. Securities and Exchange Commission and Department of Justice are continuing their attack on gatekeepers of corporate secret—such as accountants, auditors and attorney—so this is not unexpected," said Carney, a former federal securities fraud prosecutor.
Carney said that prosecuting an attorney for divulging non-public information concerning a client can be problematic because lawyers' communications with clients are considered privileged. "It's actually kind of complicated for the government to investigate in a way that doesn't trounce on attorney-client privilege, which might cause some of the evidence to be suppressed," Carney said.
The article also included a link to a 2007 article co-authored by Carney and Baker Hostetler partner Jimmy Fokas, "Insider Trading: Why More Attorneys Are Being Charged and What Companies Should Do to Prevent It."