Mimesis Law
22 July 2019

Sneaky Preet

June 23, 2015 (Mimesis Law) — Before United States Attorney for the Southern District of New York was disgraced by his subordinate’s handling of the Reason subpoena, his “legacy” as avenging angel of white collar crime had already been tainted by the Second Circuit’s reversal of insider trading charges against two hedge fund guys, Todd Newman and Anthony Chiasson.

For those not following any criminal case without obvious blood, the circuit held that insider trading didn’t travel downstream, and that information that eventually found its way into people’s heads who weren’t party to the initial improper disclosure could not be found criminally liable.  It was both a huge decision, and a crushing blow for Preet Bharara, second only to being upstaged at Harvard Law School by Mindy Kaling.

After the circuit refused to reconsider, the question was whether Preet would petition the Supreme Court for certiorari.  A tough question for sure, but Preet was certainly up to the task. Or maybe not.

On Monday, June 15, 2015, Justice Ruth Bader Ginsburg received an application via the Clerk’s Office that had been hand-delivered from Solicitor General Donald B. Verrilli, Jr. on behalf of U.S. Attorney Preet Bharara.   It requested a 30-day extension (Original submission was due on July 2, 2015) to file for certiorari in the Newman/Chiasson insider trading case.  She would grant the extension the following day.

Making hard calls is what one does as United States Attorney, and Preet certainly had plenty of experience with these sorts of cases. Why would he need more time?

The reason cited for the delay was the need to, “complete consultation with interested agencies and components.”  Another reason could be that all of the attorneys who prosecuted the high profile cases have left the SDNY and are now in private practice.  This case has been ongoing for nearly five years, has been argued in a jury trial, appealed to the 2nd Circuit, overturned at the 2nd Circuit and considered by the entire 2nd Circuit (en banc).  There should be enough information to put together a brief or something by this point.

Or something.  At least an affirmative statement of intent, even if he couldn’t manage to get his assistants to cobble something together in time to meet the deadline because they were too busy sending out subpoenas for nasty blog comments or getting gag orders so no one would know about the threat of woodchippers, ubiquitous in the Southern District of New York.

And what did the lawyers for Newman and Chiasson have to say about this?

The fact is, the government did NOT tell them that they were going to ask for an extension.  Council for both Anthony Chiasson, Greg Morvillo, and Todd Newman, Stephen Fishbein, found out about the extension request when contacted by a reporter for a comment on Wednesday.  Finally, they received (were served) the application for extension by regular mail on June 18, two days after Justice Ginsberg had approved of the extension.

Wut?  The request for an extension was hand-delivered to Justice Ginsburg, but put in the regular mail to the defense lawyers? Can they do that?

Under Supreme Court Rule 29.3, one party to a case is expected to notify the other party in a similar manner as it notified the court … so the government should have reached out to defendants and said “Hey we are asking for an extension.”  This would allow the defense a chance at rebuttal, or to agree.  That rule was even updated on April 29, 2013 to state that, “electronic transmission of documents to other parties at the time of filing is now required …”

The rule, however, contains a word that, on its surface, provides an escape for the sort of shoddy, disingenuous gamesmanship played here.

 Ordinarily, service on a party must be by a manner at least as expeditious as the manner used to file the document with the Court.

The inclusion of “ordinarily” is to accommodate emergency applications, life and death stuff where an order must be signed immediately, service on the opposing party notwithstanding, because they can’t unkill someone for bad service.  There was no emergency here. Not even a tiny bit.

The request for an extension of time to decide whether to file a petition should have been accompanied by an affidavit of service, which should have make clear that while the request was being hand-delivered to the court, it was being sent by regular mail to the adversaries.  This is a big red flag, and Justice Ginsburg should have checked to make sure the government was on the up and up. Whether she did is unclear.

Some judges get seriously bent out of shape about such games. Others shrug and mutter “meh,” not being particularly upset by flagrant shenanigans, at least when it’s perpetrated by the government. Whether that’s the case for RBG or she just didn’t bother to check for service is unknown.  What is known is that the government pulled a shrewd one and got away with it.

Stephen Fishbein, sent a letter to the Supreme Court expressing his concern over the government’s sneaky extension and stated that had he known about it, he would have opposed it.  In his letter, Fishbein stated that if the government was so concerned about how the 2nd Circuit’s decision had derailed their ability to prosecute insider trading cases, as has been reported widely, then they should have been, ‘eager to file its petition for a writ of certiorari promptly.’  Game on!

Fishbein asked the Clerk of the Court to note that they oppose the extension, for whatever that is worth now, and that they would prefer the government not use this covert method of seeking future extensions.  Simply sticking to the existing rules should resolve the latter issue.

The opportunity is there for Justice Ginsburg to nunc pro tunc her signature off the request for an extension, get pissed at Preet and refuse to be played by the government in its effort to ignore the rules, circumvent adversary counsel and sneak through their request without opposition.  Or perhaps admonish the government not to play fast and loose next time, but let this dishonesty stand untouched. Or do nothing.

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