Jefferson Convicted of Corruption Charges

William-Jefferson-official-photo

William Jefferson, the former nine-term congressman from Louisiana, was found guilty of 11 of 16 corruption charges on Wednesday by a federal jury.

The Jefferson case was most famous for the discovery of $90,000 of cash stuffed in his freezer. Prosecutors said Jefferson planned to use the cash for a bribe. Jefferson’s lawyers said the cash in the freezer proved the ex-lawmaker didn’t use the money as a bribe.

There was also a constitutional battle over the FBI’s raid of his Jefferson’s Congressional office. Ultimately, some of the information seized by the FBI was returned and not used as evidence.

During the six-week trial, prosecutors said that from 2000 to 2005, Mr. Jefferson sought hundreds of thousands of dollars in bribes from a dozen companies involved in oil, communications, sugar and other businesses, often for projects in Africa. Mr. Jefferson used his position as a member of the House Ways and Means trade subcommittee to promote the companies’ ventures without disclosing his own financial stakes in the deals.

The jury deliberated five days before reaching its decision.

Guilty

  • Count 1 18 USC §371. Conspiracy to solicit bribes by a public official and deprive citizens of honest services by wire fraud and violate the Foreign Corrupt Practices Act to advance a telecommunications project sponsored by iGate Inc. of Louisville, Ky.
  • Count 2 18 USC §371. Conspiracy to solicit bribes by a public official and deprive citizens of honest services by wire fraud related to his efforts on behalf of Arkel Sugar, LETH Energy, TDC Overseas, Procura Financial Interests of South Africa and WorldSpace for projects that included a sugar refinery and fertilizer plant in Nigeria, development of marginal oil fields in Nigeria, the sale of garbage-to-energy incinerators in West African nations; the development of satellite educational programming in several West African nations; and a settlement of a dispute regarding oil development rights off the coast of Sao Tome & Principe in West Africa.
  • Count 3 18 USC §201(b)(2)(A). Solicitation of bribes by a public official related to allegations that Jefferson sought payments from iGate Inc. to a firm controlled by his wife, Andrea, in return for his help securing telecommunications projects in Nigeria and Ghana.
  • Count 4 18 USC §201(b)(2)(A). Solicitation of a bribe by a public official related to what the government contends was Jefferson demanding, seeking, receiving, accepting and agreeing to receive things of value from Lori Mody, the Virginia investor who wore a wire to record conversations with the then-congressman.
  • Count 6 18 U.S.C. §1343 and §1346. Deprive citizens of honest services by wire fraud related to a fax from Jefferson to Lori Mody establishing the percentages of ownership in Mody’s company to be given to Mody, Brett Pfeffer, iGate and a company controlled by the Jefferson family.
  • Count 7 18 U.S.C. §1343 and §1346. Deprive citizens of honest services by wire fraud related to a wire transfer of $59,300 fromMody’s bank account to an account held by the ANJ Group, headed by Jefferson’s wife, Andrea.
  • Count 10 18 U.S.C. §1343 and §1346. Deprive citizens of honest services by wire fraud related to a telephone call from Jefferson in Ghana to Vernon Jackson in Louisville, Ky., discussing the progress of meetings with Ghanaian officials.
  • Count 12 18 U.S.C. §1957. Money laundering related to the transfer of a check for $25,015 written from ANJ payable to the Jefferson Committee.
  • Count 13 18 U.S.C. §1957.Money laundering related to the wire transfer of $25,000 from ANJ to iGate.
  • Count 14 18 U.S.C. §1957.Money laundering related to the transfer of a check for $25,000 from an ANJ account made payable to Andrea Jefferson and deposited to an account held by both Andrea and William Jefferson.
  • Count 16 18 U.S.C. §1962(c). Racketeer Influenced Corrupt Organization, pattern of racketeering activity, related to what the government says was Jefferson’s use of his congressional office for illegal activities.

Not Guilty

  • Count 5 18 U.S.C. §1343 and §1346. Deprive citizens of honest services by wire fraud related to credit card charges by Jefferson from his congressional office totaling $14,885.95 for travel from Washington to Lagos, Nigeria, with the “understanding” iGate would reimburse that charge.
  • Count 8 18 U.S.C. §1343 and §1346. Deprive citizens of honest services by wire fraud related to a fax from Jefferson to Mody attaching various documents, including a letter to then-Nigerian Vice President Atiku Abubakar promoting a telecommunications project.
  • Count 9 18 U.S.C. §1343 and §1346. Deprive citizens of honest services by wire fraud related to a fax from Jefferson to Mody with a copy of a letter from Jefferson to a high-ranking Ghanaian government official seeking a meeting.
  • Count 11 15 U.S.C. §78dd-2(a). Violation of the Foreign Corrupt Practices Act related to Jefferson’s discussion with Mody about possibly bribing Nigerian Vice President Abubakar and other Nigerian officials. Charge includes transfer from Mody of $100,000 (in FBI money) that Jefferson said was intended as a bribe to Nigerian Vice President Abubakar. All but $10,000 was later found in Jefferson’s freezer.
  • Count 15 18 U.S.C. § 15112(c)(1). Obstruction of justice related to Jefferson putting two iGate Inc. faxes into a briefcase while the FBI was searching his house on Aug. 3, 2005.

References:

Respondeat Superior and Compliance

oil tanker

Back in January, a company was found criminally liable for the action of its employees. (Second Circuit Affirms Ionia Management Case.) Under respondeat superior (Latin for “let the master answer”) a company can be held vicariously liable for crimes committed by employees acting within the scope of their employment.

Ionia operates and manages shipping vessels which transport oil to the United States. These ships produce oil-contaminated bilge waste, which they have to store for proper disposal. The Act to Prevent Pollution from Ships, makes it a crime to knowingly dispose of this waste improperly.

Ionia’s engine room crew, under the direction and participation of the Chief Engineers and Second Engineer, routinely discharged oily waste water into the high seas through a “magic hose” designed to bypass the vessel’s Oily Water Separator, which would have cleaned the waste to prepare it for disposal as required by law. Furthermore, the Kriton’s crew made false entries in the ORB to conceal such discharges, and obstructed a federal investigation (a) by hiding the “magic hose” from Coast Guard inspectors during a March 20, 2007, inspection and (b) by lying to Coast Guard officials.

There was some hope that the court would alter the doctrine of respondeat superior and include a good faith defense or limit the doctrine to higher level employees. A company can be brought down by lower level employees violating company policies.

In One Rogue Worker Can Take an Entire Company Down Stanley A. Twardy Jr. and Daniel E. Wenner wrote that “the trial court charged the jury that a corporate defendant could be held criminally responsible for the conduct of a single low-level employee, even if that employee acted in direct contravention of corporate policy and a robust compliance program.”

I didn’t read the case as taking that position and I still don’t.

First, there was a structural problem in the appeal. Ionia did not challenge the jury instruction at trial, so the Second Circuit was limited to a review for plain error.

Second, Ionia took the position that corporate criminal liability can “can only stem from the actions of so-called ‘managerial’ employees.” That contention seems at odds with United States v. Twentieth Century Fox Film Corp., 882 F.2d 656, 660 (2d Cir.1989) In the Second Circuit, “[i]t is settled law that a corporation may be held criminally responsible for [criminal] violations committed by its employees or agents acting within the scope of their authority.” United States v. Twentieth Century Fox Film Corp., 882 F.2d 656, 660 (2d Cir. 1989). Regardless, evidence show that the Chief Engineers specifically directed the deck hands to commit the criminal acts.

Third, the prosecution does not need to prove as a separate element that the corporation lacked effective policies and procedures to deter and detect criminal actions by its employees. “A corporate compliance program may be relevant to whether an employee was acting in the scope of his employment, but it is not a separate element.” The mere existence of contrary company policies is not by itself a defense to criminal liability. Whether a company has an official position on the course of conduct undertaken by its agents is merely one factor to be considered when assessing whether to impose vicarious liability.

I think this case show the importance of a compliance program. Merely having policies in place in not enough to defend the company from criminal liability. Policies alone are not enough to cause employee behavior to conform to policy. Compliance programs need training, procedures and enforcement to be effective.

I am sure it was Ionia’s policy to not dump the untreated bilge water in violation of the law.  They just were not doing enough to prevent it.

References:

Fired for Foiling a Bank Robbery

key

Jim Nicholson was working at a Key Bank branch when a man entered the bank and demanded money. Rather than comply with the robber’s demands, Nicholson tossed his bag to the floor, lunged at the suspect and demanded to see a weapon. The man ran, and Nicholson chased him for several blocks before knocking him down with help from a passerby. Nicholson then held the suspect, Aaron J. Sloan, 29, until police arrived.

Two days later he was fired for violating company policy.

Is this the wrong result?

“Our policies and procedures are in the best interests of public safety and are consistent with industry standards. Money, which is insured, can be replaced. Lives cannot.” – Key Bank spokeswoman Anne Foster

“It really doesn’t matter if you’re a bank teller or a citizen walking down the street. Generally speaking, it’s best to be a good witness. And quite honestly, this is also true for people who are off-duty police officers too.” – Seattle Police Sgt. Sean Whitcomb

The policy clearly makes sense. There is no need for a bank employee to confront and chase a bank robber. Discipline was clearly the response.

The firing does send message to the rest of the KeyBank employees. Don’t do something stupid like confronting a bank robber. Focus on good identification so the police can find the robber. Let the police do their job.

What would have happened if the robber injured or killed Nicholson during the struggle? What is Nicholson injured or killed the robber?

Would a warning or suspension have been a better disciplinary action? Since the bank would presumably covered by insurance, there would have been no loss to the bank. So Nicholson endangered himself for no benefit to the bank. Any action that would encourage others would be reckless and endanger lives.

I think KeyBank did the right thing. But perhaps someone could help him find a new job.

What do you think?

Thanks to some Twitter followers for their thoughts:

  • @ComplianceWeek: I’d dock pay and make him employee of the month. Fired for bravery seems wrong.
  • @JennSteele: Something about the outright firing just sits wrong with me. Maybe it’s my American bent towards vigilantism
  • @Jeffrey_Brandt: Give him a reward before firing him
  • @BillWinterberg: Non-compliant bank teller could have turned out much worse. Bank policies exist for very good reasons.
  • @EthicsArbitrage: That’d be a real problem if carried out consistently. We’d run out of employees. Non-compliance=fired.
  • @DrewCollier: admire his bravery, admonish his disregard to policy. it’s a poor example to others and could get someone killed next time.

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Is the Public Company Accounting Oversight Board Unconstitutional?

pcaob_logo

That question is on the docket for the Supreme Court in October. The Court agreed to rule on the constitutionality of the Public Company Accounting Oversight Board in Free Enterprise Fund v. PCAOB (08-861). The Sarbanes-Oxley Act passed in 2002 created PCAOB as a new government agency to regulate firms that audit the books of publicly traded companies. The key question in the case is whether the Act violated the separation-of-powers doctrine.

This amici brief from a group of law professors says: No, its unconstitutional.

As law professors who have studied and written about the massive accounting and corporate governance scandals that prompted the passage of the Act, we applauded Congress’s decision to establish a new independent regulator to oversee the conduct of the auditors of public companies. We have been concerned, however, that the particular design chosen by Congress accorded the PCAOB substantial discretion and autonomy without imposing constitutionally sufficient accountability. The current economic crisis in the financial markets has raised for us another concern: that Congress may use the design of the PCAOB in creating additional independent financial regulators. Ultimately, we hope that a decision by this Court will prompt Congress to restructure the PCAOB as a regulator that is more accountable and transparent.

The professors in the brief are: Stephen Bainbridge, Robert Bartlett, William Birdthistle, Timothy Canova, Lawrence Cunningham, James Fanto, Theresa Gabaldon, Lyman Johnson, Roberta Karmel, Donna Nagy, Lydie Pierre-Louis, Adam Pritchard, Margaret Sachs, Gordon Smith, and Kellye Testy.

The Cato Institute and law professors Larry Ribstein and Henry Butler came to the same conclusion.

Historically, the power to remove an official “for cause” was seen as “an impediment to, not an effective grant of, Presidential control.” Morrison v. Olson, 487 U.S. 654, 706 (1988) (Scalia, J., dissenting). But at least traditional independent agencies are subject to this control. That much is settled. Here, the Board is protected from Presidential control by two layers of “for cause” removal statutes—rendering removal effectively impossible.

Also lining up against PCAOB are The Washington Legal Foundation, Mountain States Legal Foundation and American Civil Rights Union.

Reference:

Reasons Why the SEC Wants to Regulate Political Contributions

sec-seal

The SEC has proposed a New Rule on Political Contributions by Certain Investment Advisers to prevent advisers from participating in pay to play practices affecting the management of public pension plans. They had proposed a similar rule in 1999. Many of the comments to that rule said that pay to play was not a problem in the management of public funds.

Now, the SEC thinks that pay to play is a significant problem in the management of public funds by investment advisers. In recent years, the SEC and criminal authorities have brought a number of actions charging investment advisers with participating in pay to play schemes. Here are some of the incidents they cite in the proposed pay to play rule. http://www.sec.gov/rules/proposed/2009/ia-2910.pdf

Alabama

  • The SEC brought a case against the mayor of Birmingham and other defendants, alleging that while the mayor served as president of the County Commission of Jefferson County, he accepted undisclosed cash and benefits through a lobbyist as a conduit from the chairman of a Montgomery, Alabama-based broker-dealer, in return for awarding municipal bond business and swap transactions to the broker-dealer. See SEC v. Larry P. Langford et al., Litigation Release No. 20545 (Apr. 30, 2008).

California

Connecticut

  • Paul J. Silvester, the former Treasurer of the State of Connecticut, agreed to invest $200 million of state pension funds in return for the investment adviser providing consulting contracts valued at approximately $1 million each to two of his friends.SEC v. Paul J. Silvester et al., Litigation Release No. 16759 (Oct. 10, 2000); Litigation Release No. 20027 (Mar. 2, 2007); Litigation Release No. 19583 (Mar. 1, 2006); Litigation Release No. 18461 (Nov. 17, 2003); Litigation Release No. 16834 (Dec. 19, 2000);
  • Sanctions against William A. DiBella, the former Majority Leader of the Connecticut State Senate, and his consulting firm, North Cove Ventures, L.L.C. for their roles in aiding and abetting then Treasurer of the State of Connecticut, Paul J. Silvester in a fraudulent investment scheme.SEC v. William A. DiBella et al., Litigation Release No. 20498 (Mar. 14, 2008). See also
  • A judgment against Ben F. Andrews, Jr. in connection with a fraudulent scheme involving the investment of Connecticut state pension fund money. U.S.. v. Ben F. Andrews, Litigation Release No. 19566 (Feb. 15, 2006);
  • In November 1998, the then-Connecticut Treasurer invested $75 million of the Connecticut state pension fund with Thayer IV. In connection with this investment, Thayer, through Malek, agreed to hire a consultant at the Treasurer’s request. This consultant, who was paid nearly $375,000 by TC Management IV, had no previous involvement with the proposed investment and ultimately performed no meaningful work on the deal. In the Matter of Thayer Capital Partners, TC Equity Partners IV, L.L.C., TC Management Partners IV, L.L.C., and Frederick V. Malek, Investment Advisers Act Release No. 2276 (Aug. 12, 2004);
  • The principal of an investment adviser provided $2 million in consulting contracts to associates of the Connecticut State Treasurer to secure the decision to invest $200 million in state pension funds in his funds. In the Matter of Frederick W. McCarthy, Investment Advisers Act Release No. 2218 (Mar. 5, 2004);
  • An aide to the Connecticut State Treasurer received a $1 million consulting contract from an investment adviser with whom the Treasurer had invested $200 million in Connecticut state pension funds. In the Matter of Lisa A. Thiesfield, Investment Advisers Act Release No. 2186 (Oct. 29, 2003).
  • The indictment of the former mayor of Bridgeport, Connecticut, in connection with his conviction for, among other things, requiring payment from an investment adviser in return for city business. U.S. v. Joseph P. Ganim, 2007 U.S. App. LEXIS 29367 (2d Cir. 2007)

Florida

  • A partner at Lazard Freres & Co. was found liable for conspiracy and wire fraud for fraudulently paying $40,000 through an intermediary to Fulton County’s independent financial adviser to secure an assurance that Lazard would be selected for the Fulton County underwriting contract. United States v. Poirier, 321 F.3d 1024 (11th Cir.), cert. denied sub nom., deVegter v. United States, 540 U.S. 874 (2003)

Georgia

  • A broker-dealer, two of its officers and a city official were involved in a scheme to defraud the City of Atlanta in connection with the purchase and sale of certain securities while providing substantial, undisclosed monetary benefits to the city’s investment officer who was authorized to select a broker-dealer for the transactions. See In the Matter of Pryor, McClendon, Counts & Co., Inc. et al., Securities Act Release No. 7673 (Apr. 29, 1999); Securities Act Release No. 8062 (Feb. 6, 2002); Exchange Act Release No. 48095 (June 26, 2003); Securities Act Release No. 8245 (June 26, 2003); Securities Act Release No. 8246 (June 26, 2003).

Illinois

New Mexico

  • An investment adviser was barred from association with any broker, dealer or investment adviser for paying kickbacks to the Treasurer of the State of New Mexico. In the Matter of Kent D. Nelson, Investment Advisers Act Release No. 2765 (Aug. 1, 2008);  I
  • Conviction of the former treasurer of New Mexico for requiring that a friend be hired by an investment manager in return for accepting a proposal from the manager for government business.
  • Conviction for attempted extortion of the former treasurer of New Mexico’s successor for requiring that a friend be hired by an investment manager at a high salary in return for the former treasurer’s willingness to accept a proposal from the manager for government businessU.S. v. Vigil, 523 F. 3d 1258 (10th Cir. 2008)

New York

  • The deputy comptroller and a “placement agent” engaged in corruption and securities fraud for selling access to management of public funds in return for kickbacks and other payments for personal and political gain. SEC v. Henry Morris, et al, Litigation Release No. 21036 (May 12, 2009).

North Carolina

  • Alleged pay to play activities involving North Carolina’s state treasurer. Moore Defends Pension System, by Rick Rothacker & David Ingram for the Charlotte Observer (Feb. 25, 2007) (discussing )

Ohio

  • Reginald Fields, Four More Convicted in Pension Case: Ex-Board Members Took Gifts from Firm, CLEVELAND PLAIN DEALER (Sept. 20, 2006) (addressing pay to play activities of members of the Ohio Teachers Retirement System).

Pennsylvania

That is a big list of bad behavior is short period of time.

Maybe the SEC has a point.

Although I am not sure if the proposed SEC rule will stop it.

Hollywood and the FCPA

rescue-dawn

With the guilty verdict in the case of handbag magnate Frederic Bourke and while waiting for the verdict in the Jefferson corruption case, we can turn to Hollywood for the next FCPA trial. The U.S. Attorney’s office charged a Hollywood producer with paying bribes to a foreign official.

Gerald and Patricia Green are accused of paying a Thai official $1.8 million between 2002 and 2006 in order to obtain $14 million worth of contracts. Prosecutors claim the couple paid off Juthamas Siriwan, the former governor of the Tourism Authority of Thailand, which puts on Bangkok’s international film festival. Gerald Green was the producer of Werner Herzog’s Resuce Dawn along with a dozen other movies.

Richard Cassin of the FCPA Blog is providing coverage, including an insight to trial strategy:

Prosecutors plan to introduce into evidence a Thai anti-bribery statute that applies to public officials (here). That law — even if it’s rarely enforced — probably blocks the Greens from raising the local-law affirmative defense. The FCPA allows otherwise prohibited payments if the “payment, gift, offer, or promise of anything of value that was made, was lawful under the written laws and regulations of the foreign official’s” country. 15 U.S.C. §§ 78dd-1(c)(1), 78dd-2(c)(1) and 78dd-3(c)(1). The defense is rarely available because most countries, like Thailand, have anti-corruption laws.

The trial starts today in California. Patricia Green is represented by Marilyn Bednarski of Pasadena’s Kaye, McLane & Bednarski. Gerald Green is represented by Jerome Mooney of L.A.’s Weston, Garrou, Walters & Mooney.

References:

New SEC Rule on Political Contributions by Certain Investment Advisers

sec-seal

The SEC has just published the text of the proposed rule on political contributions by investment advisers. SEC voted unanimously to propose this rule at its July 22nd Open Meeting.

http://www.sec.gov/rules/proposed/2009/ia-2910.pdf

The proposed rule is intended to curtail “pay to play” practices by investment advisers that seek to manage money for state and local governments.

The new proposed rule has four primary aspects:

1. Restricting Political Contributions

An investment adviser who makes a political contribution to an elected official in a position to influence the selection of the adviser would be barred for two years from providing advisory services for compensation, either directly or through a fund.

The contribution prohibition would also apply to certain executives and employees of the  investment adviser.

Additionally, the range of restricted officials would include political incumbents and candidates for a position that can influence the selection of an adviser.

There is a de minimis exception that permits contributions of up to $250 per election per candidate if the contributor is entitled to vote for the candidate.

2. Banning Solicitation of Contributions

The proposed rule also would prohibit an adviser from coordinating, or asking another person or political action committee to:

  1. Make a contribution to an elected official (or candidate) who can influence the selection of the adviser.
  2. Make a payment to a political party of the state or locality where the adviser is seeking to provide advisory services to the government.

3. Restricting Indirect Contributions and Solicitations

There would be prohibition on engaging in pay to play conduct indirectly, if that conduct would violate the rule if the adviser did it directly. That would include directing or funding contributions through third parties such as spouses, lawyers or companies affiliated with the adviser.

4. Banning Third-Party Solicitors

There is prohibition on paying a third party, such as a placement agent, to solicit a government client on behalf of the investment adviser.

Compliance, Van Halen and Brown M&M’s

You may have heard the story about Van Halen’s banning of brown M&M’s from its dressing room. I chalked it up to the pampered life of rock stars. (Especially, when compared to the more mundane life of a chief compliance officer.)

I just listened to the latest episode of  This American Life which revealed that the provision was not about pampering. It was about compliance.  Host Ira Glass talked with John Flansburgh (from the band They Might Be Giants) and he explained why the M&M clause was actually an ingenious business strategy. They recounted an except from David Lee Roth’s autobiography, Crazy from the Heat:

Van Halen was the first band to take huge productions into tertiary, third-level markets. We’d pull up with nine eighteen-wheeler trucks, full of gear, where the standard was three trucks, max. And there were many, many technical errors — whether it was the girders couldn’t support the weight, or the flooring would sink in, or the doors weren’t big enough to move the gear through.The contract rider read like a version of the Chinese Yellow Pages because there was so much equipment, and so many human beings to make it function. So just as a little test, in the technical aspect of the rider, it would say “Article 148: There will be fifteen amperage voltage sockets at twenty-foot spaces, evenly, providing nineteen amperes . . .” This kind of thing. And article number 126, in the middle of nowhere, was: “There will be no brown M&M’s in the backstage area, upon pain of forfeiture of the show, with full compensation.”

So, when I would walk backstage, if I saw a brown M&M in that bowl . . . well, line-check the entire production. Guaranteed you’re going to arrive at a technical error. They didn’t read the contract. Guaranteed you’d run into a problem. Sometimes it would threaten to just destroy the whole show. Something like, literally, life-threatening.

Van Halen used the candy as a warning flag for an indication that something may be wrong. I see some lessons to be learned.

Update:

Diamond Dave talking about Brown M&Ms.

Brown M&Ms from Van Halen on Vimeo.

(via NPR Music’s The Record: The Truth About Van Halen And Those Brown M&Ms by Jacob Ganz

References:

Top Ten Mistakes Lawyers Make with Social Media

social-media-expert

Lawyers and law firms are rapidly adopting social media to market themselves and connect with peers. These are new tools. We are all trying to figure out how to use them. Just to make it more difficult, the tools themselves are rapidly evolving as we are learning how to use them.

Some lawyers are doing a great job using them. Some are doing a terrible job.

I thought I would share my thoughts on the mistakes I see.

10. Blocking access. Social media provides a rich source of information about clients, potential clients, opposing counsel, witnesses and other parties. It easy to get around the block with a mobile device or home access. Blocking is just an annoyance. It’s not an effective policy.

9. Failing to have a social media policy. People in your law firm are using social media. They may only using if for personal purposes. But if they identify your firm as their employer, what they do has an effect on the image of your firm.

8. Ignoring Facebook as a recruiting tool. “You do better fishin’ where the fish are.” Many summer associates are creating groups on their own. Your firm would be better off if they administered the group.

7. Not giving authorship to blog posts. The attorneys writing the story should get credit for the story. This gives an attorney an extra incentive to contribute and showcases their skills.

6. Not linking. A blog is much more useful to its readers and its authors if it links to other relevant information. There is no reason not to link to primary source material like statutes and regulations online. Link to other news sources, websites and blogs. Yes people will leave leave your site through those links. But they are more likely to come back if your site is the better source of information.

5. Failing to understand ethical limitations. The bar regulators have barely dealt with web 1.0, never mind the additional issues around web 2.0. Keep in mind that most social media activities can be considered advertising.

4. Abandoning without notice. Nothing lasts forever. If you started a blog and are not posting any more. Put a post saying you’ve stopped or are on hiatus. (This is what I did for my old KM Space blog.)

3. Failing to leverage LinkedIn. You should have a profile in LinkedIn that has at least as much information as the bio on your firm’s site. You should also be leveraging LinkedIn to stay up to date with the movement of your clients and former client contacts. LinkedIn is a great source of information for CRM systems.

2. Posting information about clients. As with any advertising, make sure you get written consent from clients before posting any information about your work with them.

1. Not using social media. The biggest mistake most lawyers are making with social media is not using these tools.  They are here to stay. Get used to it.

What mistakes to you see being made?

Image is from Hugh MacLeod of Gapingvoid – “cartoons drawn on the back of business cards”: you’re a social media specialist?

National Data Privacy Law Proposed

Image by Johnny Grim (CC BY-NC-ND 2.0)

With a multitude of states trying to protect their citizens when it comes to breaches of personal data security, it is becoming increasingly difficult to manage compliance with this patchwork of laws.  The Data Accountability and Trust Act (H.R. 2221) proposed in Congress proposed to preempt state laws and make regulation of data security a matter of federal regulation.

If passed in its current form, the procedure and time frame for notifications in the event of data breach would be standardized instead of the differing requirements from state to state. It would also required the Federal Trade Commission to regulate the security practices around personal data.

The most controversial part seems to be the provisions around information brokers (companies that gather personal information about people that are not their customers to sell to third parties.)  It would require these brokers to establish reasonable procedures to verify the accuracy of the personal information it collects. They would also have to provide consumers with access to that information.

Although it is still working its way through the system, it has already been forwarded by the subcommittee to the full House Energy and Commerce Committee.

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