When The Subpoena Has Your Name On It

When Dennis Levine suspected that the feds had arrived at his office to slap him with a subpoena, the Drexel Burnham Lambert investment banker slipped out, dashed home, and hopped into his BMW. For hours, he circled Manhattan hoping to outrun his pursuers. While driving around, he learned from a news story that the government had charged him with insider trading.

Levine had something to hide, of course. And once he "faced reality," he says, he pleaded guilty in 1986 and landed in jail. But many business people served with subpoenas are not even suspected of wrongdoing. Rather, they are being sought as witnesses or to supply documents in civil or regulatory cases. Often, the government is gathering such data to assess whether a wrong has been committed and by whom. Assuming you did nothing illegal, if you stay calm, avoid common mistakes, and hook up with a skilled attorney, you'll likely get through the situation unscathed.

You should prepare for a subpoena as soon as you learn of an investigation that could sweep you in. In the wake of such scandals as Salomon Brothers and Bank of Credit & Commerce International, scores of bankers, traders, and others are getting subpoenas from all kinds of governmental authorities. Subpoenas require recipients to testify before legal bodies or to turn over files.

Rule No. 1: Stay on your best behavior, says Whitney Adams, a former Justice Dept. prosecutor who specializes in white-collar criminal defense. "Recognize that your conduct, even after the event in question, will be put under a microscope," she says.

That means resist the temptation to houseclean. In fact, Adams advises managers who expect a subpoena to be extra careful to keep records and even files that they normally would discard. Under the corporate sentencing guidelines, punishment can be enhanced for the "negligent failure" to preserve documents, she says.

Destroying records, moreover, creates a risk that prosecutors will charge you with obstruction of justice. Or they could use the act as evidence of a "consciousness of guilt," says lawyer Stanley Arkin, a partner at Chadbourne & Parke.

The safest strategy is to hire a lawyer. "Many people assume that because you call a lawyer, it's an admission of guilt. But if you don't, you could handle things the wrong way," says Harvey L. Pitt, a former Securities & Exchange Commission general counsel.

Don't just hire a big name or someone with experience. It's just as key to pick someone you can trust--and someone who cares about your case no matter how small. Start by interviewing attorneys, Pitt says.

DON'T PRY. Try to stay as well-informed as possible about the government's probe. But leave the actual fact-finding to your attorney.

Otherwise, you might unwittingly say something to prosecutors or others that later could be used against you. Typically, defense lawyers will contact prosecutors and ask them directly what they're probing and how you figure in, if at all.

Some lawyers will even volunteer their clients' cooperation in order to convince prosecutors that no crime exists or that they suspect the wrong person. If successful, the tactic can head off a subpoena and even an indictment, lawyers claim.

If you do get a subpoena, refrain from contacting others in the same situation. They may be cooperating with the government and tape-recording conversations that could be misconstrued. Also, avoid confiding in friends. Despite their loyalty, they can be forced to appear in court on the government's behalf. One lawyer recalls a client who got drunk and confessed "his story" to his best friend--whom the feds subpoenaed. Says the lawyer: "There was nothing the friend could do."

TELL YOUR BOSS. Keeping completely mum isn't advisable when the subpoena is job-related. It's best to tell your employer immediately. Some companies, including securities firms, have policies that require the disclosure of subpoenas, and failure to do so could result in disciplinary action.

Still, it's risky to bare your soul to the company's attorneys. While conversations with in-house lawyers are deemed confidential under the attorney-client privilege, the privilege belongs to the employer, not you. And the company is free to waive it.

If the subpoena is part of a high-profile case or the subject of ongoing press attention, you or your lawyer should consider talking to the press. "In the minds of the reading public, the getting of a subpoena means that you're guilty," says one public-relations expert. Presenting your side will help put the event in perspective. You can also emphasize to reporters that you haven't been convicted of any misdeeds.

Getting subpoenaed will never be pleasant. But keeping informed and dealing with the facts will help smooth the process. Panicking and fleeing was just one more way in which Dennis Levine set a poor example.


Getting subpoenaed can be a harrowing experience. You

may be ordered to turn over documents to a regulatory or

law enforcement agency or testify in court. Here's how to

make the process easier:

-- Take extra precautions to hold on to documents to prevent

possible obstruction-of-justice charges

-- Hire an experienced attorney who cares about your

case--no matter how small--and one whom you can trust

-- Consider volunteering data to guide prosecutors in the

right direction

-- Tell your boss about the subpoena if it is job-related


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