June 29, 2006

In the KPMG case, federal judge Lewis Kaplan has blown a great big hole in the Justice Department's policy (as outlined in the now-notorious Thompson memorandum, Sec. VI) of arm-twisting corporations under investigation into withholding legal support from their accused employees:

"Those who commit crimes - regardless of whether they wear white or blue collars - must be brought to justice. The government, however, has let its zeal get in the way of its judgment. It has violated the Constitution it is sworn to defend."

Tom Kirkendall has links to several leading commentators, while Prof. Oesterle (via Bainbridge) challenges the idea that the unfairness involved rises to the level of unconstitutionality. White Collar Crime Prof discusses the D&O insurance implications. More: Larry Ribstein weighs in, predicting that the opinion will stand as "a landmark".