Legal News

Eastern District of NY?s Benton Campbell: ?The More Things Change . . .?

By Dan Slater

Benton Campbell, U.S. attorney for the Eastern District of New York, at a press conference on Thursday on the Bear Stearns matter. Photo: AP

While his office is partying on with the auction-rate securities investigations, the EDNY’s Benton Campbell took some time out to travel to Arlington to speak at the ABA’s securities fraud conference. The WSJ’s Evan Perez was on the scene.

The financial industry turmoil battering global markets has elicited comparisons to economic downturns that happen only every few decades. But the federal investigations seeking to unearth the root of the troubles are uncovering issues that are not that rare at all, according to the EDNY’s Benton Campbell.

He told lawyers in the audience that the issues his Brooklyn office is encountering at companies under investigation include instances of material misrepresentation, insider trading, and valuation discrepancies.

“The more things change the more they stay the same,” he says. Campbell was a senior official in the DOJ’s corporate fraud crackdown and what he’s seeing now reminds him of the investigation of Enron. “We’ve seen much of this before.”

Still, Campbell said prosecutors are being careful to differentiate fraud from the natural market downturn. There’s nothing illegal about making market bets which turn out to be wrong, he noted.

Given the recent headlines, a standing-room audience packed the room for a panel called The Subprime Meltdown: Reactions and Action at the SEC and DOJ, featuring Gil Soffer from the Deputy Attorney General’s office, Lisa Monaco, deputy chief of staff to FBI director Robert Mueller, and Andrew Calamari, the SEC’s associate regional director in New York. By comparison, options backdating is a scandal that is so-last year it seems. A competing panel called Options Backdating: Beyond the Apex of the Pyramid, drew sparse attendance. All three similarly drew parallels between the current crisis and previous probes, notably Enron.

Full post as published by Law Blog - WSJ.com on October 02, 2008 (boomark / email).