Client representation is front and center of the life of a lawyer and these days representation often includes media strategy and planning. But in one case, media strategy is currently front and center in the retrial of a former executive.
As the retrial of Gregory Reyes, former CEO of Brocade Communications Systems, Inc., begins, the issue of attorney client privilege is part of the prosecution's strategy. The Department of Justice is pushing the court to allow statements made in a press release by Reyes' former counsel, Richard Marmaro. Marmaro's statements were intended to help his client, but the government would like to use the statements as evidence against him.
In the first instance, Marmaro said that his client did not backdate options. But at trial he argued that although backdating did occur, it was not illegal. Also at issue are the files kept on Reyes by the public relations firm that was representing him.
United States Federal District Court Judge Charles Breyer who sits in the Northern District of California presided over the first trial and will also preside over the retrial. The first trial ended in conviction but was thrown out by the Ninth Circuit after it was alleged that the government knowingly made false statements in closing arguments.
The critical issue with regard to waiver is whether Reyes provided information to his lawyer knowing that that information would become public. Reyes' new lawyers have filed a motion to quash the subpoena that was issued to the PR firm, saying the statements made by counsel were necessary and that information received by the PR firm should not have to be produced. They argue counsel was responding to the intensity of media created by the government at the outset of the case.
Judge Breyer has indicated he might well allow Reyes' former attorney Marmaro's quotes and other information from the PR firm into evidence. According to the Judge, "an argument could be made that it's not a confidential communication." If the Judge Breyer allows this into evidence, it could damage the defense case especially when coupled
with the potential testimony that the company's finance department had knowledge of the backdating.
The Securities Lawyer Blog has posted on the recent BofA waiver issue. The development of the law as regards attorney-client privilege is something to watch carefully. The Reyes matter is instructive in the care that must be taken in creating and implementing a media
litigation strategy as well as the use outside of outside firms to support these efforts.
Resources on the Reyes trial and retrial can be found at law.com
Contact the law firm of Gusrae, Kaplan, Nusbaum & Bruno to speak with our experienced securities litigators.
