Response to our Reader Survey predicting outcomes in the Dewey LeBoeuf trial was less than robust—just a couple dozen of you registered your views. But the trend in our admittedly small sample is clear: In Megaphone Mark Slackmeyer’s timeless words, “That’s Guilty! Guilty, Guilty, Guilty!!”
About 80% of respondents opined that former Firm Chair Steven Davis would plead to or be found guilty of all or some of the charges he faces. Davis is the manager against whom we’ve seen the least evidence so far of knowledge or complicity (though I wouldn’t say we’ve seen none, and we still have a long ways to go). About 90% of respondents believed that former CFO Joel Sanders would plead to or be found guilty of some or all of the charges. And (count ‘em) 100% of you think former Executive Director Stephen DiCarmine is headed for the Big House.
The differences among your assessments of the defendants' chances are interesting because it bears remembering that Sanders is a CPA as well as a lawyer, and was in charge of the accounting function at the firm. The upper-middle managers who have pleaded guilty appear to be saying that Sanders signed off (figuratively, if not literally) on the bad things they admit being a part of, though only some have testified so far. If I were handicapping the Race to Rikers at this point, I’d have put Sanders in the lead. (And no, I don’t think any of these guys will literally spend time in Rikers Island if convicted; they seem more likely destined for some minimum-security facility. Readers familiar with the New York prison system may have more sophisticated guesses than mine.)
Judging from the daily news reports, the skilled and aggressive defense lawyers are making a few points here and there, but they don’t seem to be racking up the kind of score needed to win over the jury. The prosecution is methodically presenting a fairly textbook case of accounting fraud; it may not be flashy, but it seems to be getting the job done. Whether the People will inject some emotional oomph at some point remains to be seen. The direct victims of the fraud were the bank and other financial institutions that loaned the Dewey firm the lost money--not the most sympathetic victims you ever saw. But thousands of Dewey employees lost their jobs in a depressed economy as a result of the piggery of a fairly sizeable cadre of partners (most of whom were not part of the criminal conspiracy alleged in the pending trial) who demanded too much and provided too little in return, and that was enabled by the accounting fraud the prosecution is presenting.
One thing we’re not seeing is anyone who had the courage or the vision to call out the nonsense while it was going on. That’s interesting—even Enron had Sherron Watkins. It bears considering why, so far was we can tell, no one at Dewey said a word. What was it about this place that stifled, or lulled, any hint of dissent?
I’ll report further as time and interest dictate.