The Wart

From time to time I am sure you have had a similar experience.  You are out and about, maybe shopping, on the subway, or at a football game, minding your own business, and you look around and your eyes just happen to land on another person.  You notice quickly that the otherwise attractive person has a ugly wart smack dab on their upper lip or on the end of their nose.  You pause for just a moment, perhaps longer than you should, and then look away, maybe to the ground or off to the side.  And then you wonder:  why in the world does that person keep that ugly wart, haven’t we passed the time when one had to suffer with something so unattractive?  Can’t it just be excised, what useful purpose does it serve?  Then I think maybe I’m just not considering everything that I should.

So, yes, here I am back again, pondering the SEC’s trial unit in the home office.  The bane of the SEC Enforcement Unit, butt of jokes in the private bar.  Why in the world does such a dysfunctional, ineffective unit exist?  Maybe, just maybe, I am missing something fundamental, something patently obvious and I just haven’t figured it out yet.  Believe me I have thought about this a lot, probably more often than I should have.  And I still haven’t figured the why.

There are 50 or so attorneys in the SEC’s trial unit in its Home Office (DC office).  They fashion themselves as trial attorneys, though, truth be told, only a small handful have any real jury trial experience at all.  Some prance around espousing how they love to litigate (a few even have hats or shirts bearing such slogans) and will pound witnesses into the ground when a case goes to trial.  The reality is quite different though.  The closest most ever get to trial is to argue a few trial motions, and maybe, if they are lucky, take a few depositions a year.  A while ago, as trial dates would approach, inevitably, the relentless bravado would evaporate into unlimited excuses to settle.  Nowadays, such ridiculous behavior begins even before the investigation is complete.  Most will do virtually anything to avoid trial.   

So, why isn’t this problem fixed?  Surely it could be done and the Director is fully aware of the trial unit problems.  On a regular basis he has to deal with a good portion of  those in that group.  The defense bar talks about it all the time.  And on a personal level, it must really get really annoying and frustrating.  Gibbering away, spouting nonsense, putting forth legal theories that they haven’t thought enough about and litigation strategies that they have no knowledge of or experience with.  On top of that, the common inclination to twist the facts to support their lack of trial interest or to exaggerate the difficulty of the case.  Why doesn’t the Director just say, look here, enough, I don’t want this behavior anymore, and, if in continues, you will soon have to make room for a new Trial Unit head, someone who can get these monkeys to shape up and do a better job, to support an aggressive enforcement position, one that vindicates investors and makes for better markets.  Surely that should be the goal right?

For some reason it’s not, though the reasons aren’t obvious.  Perhaps the Director believes that it just requires too much time and energy to change the culture or structure.  Or maybe, it’s because the Director wants to step on as few toes as possible, lest he be remembered in an unfavorable way.  Perhaps, the Director is looking ahead to his next vocation, one that involves the private sector, where the trial unit set up will work to his advantage.  I don’t know the answer but I don’t see things changing anytime soon, at least not until someone in charge looks at it from the orientation of the public interest and quickly realizes that the Division would function much better if the trial unit were changed, either by folding it into the investigative side or outsourcing real trial work or both.  All circuses eventually have to leave town.

In the meantime, try to think about something that I realized recently or that maybe someone told me a while ago, I can’t remember which.  It’s a way of thinking that I should have adopted long ago.  At bottom, the trial unit attorneys are really not critically important to the success or failure of your case.  They are really just a distraction, a nuisance really, and if you have been doing your job effectively — being thorough and careful, while looking at things objectively — things should work out.  Sure, they can suck up a lot of your time, but only if you let them.  And yes, you should expect them to look closely for holes in cases or try to widen the holes already there.  They have been told that that is an important part of their job and most of the time they don’t have much else to do with their time.  But finding holes in a case is really not that tough to do, and normally, most investigative staff attorneys already know about the holes.  And, most importantly,  whatever the trial unit attorneys say or think doesn’t really matter in the end.  You see, you don’t need to convince them about the merits or your case, you only have to convince the decision makers — the Associate Directors and the Director and then the Commissioners.  Direct most of your time and energy on those interactions.  Don’t waste time on the wart.