An agent from the Federal Bureau of Investigation approaches a hedge fund trader as he leaves the office, wanting to ask a few questions. Nervous about saying no to an official, the trader dishes, and information he provides is later used against him.
Steven Feldman, a white collar attorney in New York City, has seen too many clients caught off-guard in such situations. His solution? The Murphy & McGonigle Surprise Law Enforcement Response App.
“The agents are trained to get you to talk,” Feldman said. “There’s no warning of any kind, even though everything you say will be used against you.”
The app features a “Surprise Interview” button, as well as guides for handling a search warrant—think a raid by the FBI—or grand jury subpoena.
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Best practices for responding to someone with a badge who unexpectedly knocks at the door include “do not panic,” “be polite” and “be prepared to assert your rights.”
There is also a proverbial panic button: cell phone numbers for Feldman and three of his colleagues at Murphy & McGonigle, white-collar defense attorneys happy to take on new clients.
Only about 90 people have downloaded the free tool so far, but “M&M Defend” has been viewed in the Apple app store more than 2,300 times since first appearing in April, Feldman said.
The app may have landed at a good time.
After a three-year lull, insider-trading prosecutions appear to be ramping back up. And the U.S. Supreme Court is reviewing a case that may make it easier for authorities to pursue such charges in the future. Meanwhile, the Securities and Exchange Commission continues to examine private fund managers, especially regarding the fees they charge and the valuation of their holdings.
Feldman, a former federal prosecutor in Manhattan focused on securities fraud, said government investigators are trained to get answers to questions within the confines of the law. That can include, he said, statements that exploit the subject’s instinct to be helpful to protect his own interests – which can make him the center of the case.
“People don’t know their rights,” Feldman said. “In some small way this is evening the playing field.”