By Linda Laderman
Legal News
Current public debate about wealth in America is not unique to the 2016 election cycle, according to Wayne State University Law Professor Peter J. Henning.
“There has always been an egalitarian strain in America,” Henning said. “Nobody is for great wealth. Nobody stands up there and says we have to make the rich richer.”
A former senior attorney in the Division of Enforcement at the Securities and Exchange Commission and at the Department of Justice, Henning teaches courses on white collar crime, constitutional law and attorney ethics. He also writes the “White Collar Watch” column for The New York Times DealBook section, where he parses insider trading cases, corporate fraud, and market manipulation.
Henning said he’s not surprised that Hillary Clinton’s speeches about Wall Street banks, Bernie Sanders’s claim that the “system is rigged” in favor of the very wealthy and Donald Trump’s refusal to release his income tax returns were called into question during the primary elections.
“I don’t think wealth has ever really left the scene, but it’s a bigger issue this time around,” Henning said. “In part, it is the outsized pay that hedge fund managers and other financial executives receive. There will be reports that a CEO got a pay cut to only $20 million, which is so far beyond what almost anyone will make that it is difficult to see there being much financial discipline in the system.”
Some very wealthy people., he said, “are planning to spend large amounts in the next election, like Sheldon Adelson, and that creates fear of buying an election. So it’s easy to go after the wealthy because of the perception of power and wealth.”
Asked about the contention by some that Wall Street is rigged, Henning said a market that is actually fixed would give those who run the banks the capacity to accurately predict the outcome of the risks they take, resulting in an assured level of profits.
“I’m not sure there is any substantiation to the claim, especially when a number of big banks and Wall Street firms collapsed in 2008. But it’s part of the broader perception, fed by insider trading cases and the like, that large financial institutions are impervious to change or real oversight,” Henning said. “Making Wall Street into a punching bag is easy. It’s red meat for the electorate.”
When Henning graduated from Georgetown University’s Law Center in 1985, he didn’t have a specific plan to pursue the field of white collar law, but has “stayed with it because he finds it endlessly interesting.”
Said Henning: “Unlike a more common crime, such as drunk driving in which the issues are almost always the same, white collar cases have so many variables that it’s really the case that no two are alike. And with greater attention in the Justice Department and the media, white collar crime has become a much better recognized area of inquiry because of the unique issues it raises that are different from other types of criminal cases such as traditional common law offenses like murder and larceny.”
In a recent “White Collar Watch” column, Henning wrote about the Dean Foods insider trading scandal that threatened to permanently taint pro golfer Phil Mickelson.
Henning noted that the case “has all the ingredients to put the spotlight back on insider trading: a flawed corporate director accused of repeatedly leaking information to a high-rolling Las Vegas gambler that helped him realize about $40 million in gains and losses avoided, and passing along a tip about an impending corporate spinoff that helped a near-legendary professional golfer repay nearly a million dollars lost on bets.”
Notwithstanding the colorful characters that emerge in real life circumstances like the Mickelson situation, Henning said he has no immediate plans to parlay his work into a novel, because “the truth is much better than fiction, at least in this area.”
“But I am exploring a possible book project related to a Foreign Corrupt Practices Act case that ended in 2012 with charges against all 22 defendants being dismissed after two failed trials in Washington, D.C.,” he said. “It involves an undercover sting operation, and presents interesting questions on how to investigate and prosecute white collar crime, especially when a cooperating witness is involved who has a rather sordid background. We’ll see if I can find a publisher.”
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