Spencer Gottlieb

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The U.S. Supreme Court has recognized “the reality that criminal justice today is for the most part a system of pleas, not a system of trials.” This is as true for defendants facing charges of robbery and extortion as for those charged with tax evasion, embezzlement, or securities fraud. Indeed, research has previously shown that nearly 97% of all federal convictions are secured through plea agreements—not jury verdicts.

Against this context, it is noteworthy that the Court recently declined to resolve a lingering circuit split involving the right of defendants to have their counsel seek such plea agreements. Specifically, the Court was asked to consider whether a defense attorney’s failure to pursue a plea agreement on behalf of a client could constitute ineffective assistance of counsel. The Sixth Amendment affords criminal defendants the right “to have the assistance of counsel” for their defense, which the Supreme Court has interpreted to mean effective counsel.

In Davis v. United States, Justices Ketanji Brown Jackson and Sonya Sotomayor took the rare step of issuing a written dissent of the Court’s denial of certiorari. Both justices are former criminal law attorneys—Justice Jackson was once an assistant public defender in Washington, D.C., and Justice Sotomayor was an assistant district attorney in Manhattan. As a result of the Court’s denial of certiorari, the ongoing circuit split means that an attorney’s failure to pursue a plea agreement may constitute ineffective assistance of counsel in violation of the defendant’s Constitutional rights, but only in certain states.…

Continue Reading Supreme Court Declines to Resolve Circuit Split Regarding Ineffective Assistance of Counsel

The DOJ recently garnered a win in its spoofing case against two precious metals traders who prosecutors alleged had engaged in widespread market manipulation and fraud through a practice known as “spoofing.” But the verdict is also in on the DOJ’s novel attempt utilize racketeering charges against traders accused of spoofing: the jury found the defendants not guilty of the alleged RICO violations. While the case highlights the DOJ’s continued crackdown on market manipulation schemes, it also illustrates the limits of the government’s reach.

Background

The DOJ’s case against the traders dates back to 2019, when prosecutors unveiled sweeping charges alleging that the traders had engaged in thousands of deceptive trading sequences for gold, silver, platinum, and palladium futures contracts between May 2008 and August 2016.  The DOJ alleged that by engaging in these practices, the traders violated the Commodity Exchange Act’s anti-spoofing provisions, which prohibit disruptive trading practices, including “bidding or offering with the intent to cancel the bid or offer before execution.” 

However, in addition to the usual spoofing and other financial crime-related offenses, the indictment charged the traders with a racketeering conspiracy.  When the indictment became public back in 2019, commentators predicted that the DOJ’s inclusion of RICO charges could make the government’s case simpler to prove.  Instead of convincing the jury through a complicated series of orders, cancellations, price movements, and trades (i.e., the typical evidence used to establish a pattern of spoofing), the path to conviction under the RICO Act was supposed to be more straightforward.  In this case, the indictment alleged that “the defendants and their co-conspirators were members of an enterprise—namely, the precious metals desk at [the bank]—and conducted the affairs of the desk through a pattern of racketeering activity, specifically, wire fraud affecting a financial institution and bank fraud.”…

Continue Reading DOJ Secures Spoofing Conviction, but Loses on Novel RICO Charges

On January 20, 2022, the U.S. Supreme Court held in an 8-1 opinion in Hemphill v. New York that Darrell Hemphill did not “open the door” to the admission of out-of-court third-party testimony by making it “arguably relevant to his theory of defense.” The Court further held that the admission of such testimony violated Hemphill’s rights under the Sixth Amendment’s Confrontation Clause. The opinion will have practical significance for defense attorneys and prosecutors preparing for trial.  See Supreme Court to Weigh Protections Under Confrontation Clause.
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Continue Reading U.S. Supreme Court Rejects Argument That Defendant “Opened the Door” to Evidence That Violated Confrontation Clause

The Sixth Amendment’s Confrontation Clause provides criminal defendants with the right to “confront”—i.e., cross-examine—the witnesses against them.  But can a criminal defendant “open the door” to the admission of evidence otherwise barred by the Confrontation Clause?  The U.S. Supreme Court will address that question in Hemphill v. New York, scheduled for oral argument next month.  The outcome of that case may significantly expand when prosecutors at all levels, from local district attorneys’ offices to DOJ Main Justice, can overcome defendants’ right to exclude absent-witness testimony.

Darrell Hemphill was convicted of murder in New York after another man was unsuccessfully prosecuted for the same crime.  Hemphill argued at trial that the first suspect committed the crime.  That was enough for the trial court, and ultimately New York’s highest court, to determine he had opened the door for the prosecution to introduce evidence rebutting Hemphill’s claim—specifically, an out-of-court statement by the first man that he did not possess the type of gun responsible for the murder.

Federal and state rules of evidence like New York’s typically allow a party to introduce rebuttal testimony like this—even if it could not do so originally—if the opposing party puts the issue into play.  But Hemphill argues that the Confrontation Clause is a separate safeguard that cannot be overcome simply by opening the door.  Under Hemphill’s theory, the first man’s statement should not have been admitted, even after Hemphill implicated him for the crime, unless the man could also be cross-examined at trial.
Continue Reading Supreme Court to Weigh Protections Under Confrontation Clause

On July 19, 2021, CME Group Inc. (the CME), the parent company of derivatives exchanges including the Chicago Mercantile Exchange and New York Mercantile Exchange, issued a Market Regulation Advisory Notice amending prior guidance on prohibited disruptive trading practices. The CME’s amended Advisory Notice RA2107-5 (Advisory Notice), took effect on August 2, 2021, and impacts…