The S.E.C.'s Advice For White-Collar Lawyers - NYTimes.com

Note to defense counsel: Do not tap your clients under the table if they say something you don’t like.

Robert Khuzami, the Securities and Exchange Commission’s enforcement chief, gave a sternly worded speech to the criminal law group of the UJA-Federation of New York last week, voicing concerns about how the lawyers conduct themselves. The transcript of the speech was just released.

“None of you, I’m sure, would engage in the types of questionable conduct that I’ll describe tonight,” he told the crowd. “But, as knowledgeable and experienced members of the white-collar bar, I’d like to suggest that you carefully consider these issues so that you can, in the words of the immortal Obi Wan Kenobi, ‘use your powers for good, not evil.’”

Mr. Khuzami said, “Too frequently we see defense counsel behavior that is questionable, or worse,” and it needs to stop.

In addition to the one instance where S.E.C. examiners witnessed toe-tapping, he said other witnesses say “I don’t recall” so many times it “lacks credibility”. In some cases, Khuzami noted that witnesses could not even remember their job responsibilities, he said.

“It is not unreasonable to draw the most negative inferences from the evidence when faced with this kind of implausible testimony,” he said.

He also told the group to be mindful of conflicts. Once, he said, the S.E.C. faced a lawyer who represented himself, the defendant and the principal investor. The investor, he said, testified that he was not concerned that he had handed over most of his savings to a person who had multiple felony convictions.

“My purpose in talking about this topic tonight is not to chill a vigorous defense, or to retaliate against ‘disobedient’ defense counsel,” he said. “But taken too far, to get caught up in the kind of tactics and gamesmanship I’ve discussed will only diminish credibility of counsel and damage your client’s interests. And that is in no one’s interest; not yours, not ours.”