Parallel Proceedings Problems
There can be no doubt that there are more parallel proceedings being conducted by the SEC and the Department of Justice. The court’s decision in United Sates v. Stringer, CR 03-432-HA (D. Or. 1/9/06) highlights some of the difficulties, however. In Stringer, the U.S. Attorney’s office determined early in an SEC investigation that a criminal prosecution was warranted and elected to work with the SEC staff rather than conduct a separate grand jury investigation. The court found the government’s actions violated the defendants’ right to due process and the Fifth Amendment and were an egregious ploy by criminal prosecutors hiding behind a civil SEC investigation. See also United States v. Scrushy, CR-030-BE-0530-S (N.D. Ab. 4/15/05) (failure to tell witness that SEC testimony was being coordinated with the U.S. attorney’s office resulted in suppression).