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To: slurper who wrote (2573)	6/24/1999 4:14:00 AM
From: hawkeye	Read Replies (1) \| Respond to of 3679

Only Richard Walker knows the answer to your question Slurper: "SEC's New Top Cop Goes on the Record The National Law Journal (p. A01) Monday, May 18, 1998 DEFENSE LAWYERS have a new top cop to contend with at the Securities and Exchange Commission. Richard H. Walker is SEC Chairman Arthur Levitt's choice to replace William R. McLucas, who led the Enforcement Division for almost 10 years. Mr. Walker opted for private practice, joining New York's Cadwalader, Wickersham & Taft, where he practiced for 15 years and rose to partner. In Mr. Walker's first in-depth interview as enforcement chief, he talked with NLJ reporter Karen Donovan, sharing his views on key issues, such as what will count as good cooperation in an SEC investigation and how he will work with criminal prosecutors. [See Page A12.] SEC Is Stretched To Limit--Walker Top cop chats about his agency, his intentions. The National Law Journal (p. A12) Monday, May 18, 1998 Q: Will your experience as general counsel influence how you will proceed as the enforcement chief? A: You tend to review enforcement recommendations very closely as the general counsel. It was my responsibility to make sure that they were very tight and very sound. Also, the general counsel reviews proposals from other operating divisions. That gives us a pretty good understanding of what the commission's policies are. When you're looking at enforcement cases, it's important to make sure that the cases that we bring promote the policies of the commission. Q: Many senior lawyers have recently left the SEC. Defense lawyers complain that the enforcement staff lacks experience. How will you respond to the turnover? A: First of all, we do have a lot of very experienced people who have stayed in the division and are the backbone of the program. And we count on them and rely on them to supervise and to train junior lawyers. We have been affected unquestionably by the strength of the economy. It's very difficult for us to compete for top-quality legal talent when the private sector is enjoying some of the best times ever. We're going to have to enhance existing training programs. Q: What can we expect from Commissioner Laura Unger's ongoing study of the enforcement division? A: She's been taking a careful look to see if there are ways of doing things better, and I think she's nearing the end of her review. I've had some conversations with her, and I think she's going to have some very constructive recommendations. Our resources are sort of stretched to the breaking point. The division has, nationwide, approximately 800 people; and obviously, that number has certainly not seen the kind of growth that corresponds with the markets. Q: Some recent court decisions have faulted the SEC for failing to come up with clear standards on what conduct is prohibited. The D.C. appellate court said that the SEC had "utterly failed to provide a standard" when it charged two accountants with improper professional conduct. How can you strike a balance between articulating clear standards and maintaining flexibility in the enforcement program? A: The framers and the drafters of the federal securities laws recognized, when the laws were enacted, the need to have broad general proscriptions against fraud and fraudulent conduct. It's a difficult balance to strike. You have to give sufficient guidance so that people know how to act responsibly within the industry and know how to do their jobs. At the same time, you can't micro-manage. Historically, we have always sanctioned people who act intentionally or recklessly. In this case, the court asked us to specify whether there were other circumstances which would trigger application of our rule, and the court found that we had not stated with sufficient clarity the circumstances under which our rule would be triggered. Q: Every defense lawyer who comes before the commission knows that his or her client will get credit if they cooperate. What constitutes good cooperation in your eyes? A: First of all, we expect people to tell us the full truth and be fully candid with us--not give us different shades, or tell us the truth incrementally, or fail to tell us something that we subsequently find out. Secondly, they've got to show up and do what we ask them to do within reasonable bounds. Third, it's always good to come in before we find you through a subpoena. People who come in voluntarily and give us information before we find it out ourselves are going to do much better because that's much more valuable to us. It saves us time; it conserves government resources. If you are an issuer or a company and you've found something that's wrong and changed your procedures and you've cleaned house, that's helpful. If you've done an internal investigation, you should be willing to waive your privileges of attorney-client privilege or work product, because we need to be able to test and evaluate the internal investigation. Unless we can see interview notes of the people that were interviewed, unless we can see materials that might otherwise be privileged, we have no way of kicking the tires and making sure that the internal investigation was properly done. Those are the highlights of what we consider to be cooperation. We view it as helping someone on a sliding scale. There are no absolutes."