White-Collar Crime: Not in our town, not this time

Check out the NYT special section today, DealB%k, about the future of white-shoe law firms, especially the terrific full-page graphic White-Collar World on page 4 by Guilbert Gates (under the direction of the reporter, Peter Lattman). The excerpt at left shows about 20 percent of the fascinating diagram of “big trouble lawyers” and the scoundrels (or the accused but acquitted) financiers they defended. (Aside: only two women are in the former group, only one — Martha Stewart — in the latter.)

Since I devour Style’s wedding pages for any mention of brides or grooms from Princeton,  I pounced upon this with similar intent and found, yes, one person that I knew from the late 1980s. Well, I didn’t actually know him, because he never would talk to me, but I delivered papers to Jay Regan at Princeton/Newport’s third-floor office on Spring Street, corner of Witherspoon.

It was during the 1980s insider trading scandal, when then attorney general Rudy Giuliani was going after “everyone and his brother,” including Richard Milliken and Martin Segal. (For an in-depth account of one of those trials, see this Money-CNN piece. Michael Powell detailed Giuliani’s excesses in a 2007 New York Times article) . Regan and Princeton/Newport got caught up in the prosecution. Powell wrote:

In 1987, about 50 armed marshals raided and locked down the investment firm Princeton/Newport Partners. A federal appellate court overturned that racketeering conviction, but the firm remained shuttered. “We were in the wrong place at the wrong time,” said financier Jay Regan, a principal at Princeton/Newport. “It’s strange to be sacrificed on someone’s altar.”

It was a very tense time around that office on Spring Street. When you deliver papers for U.S. 1 — and every staff member was a deliverer in the early years — you taste the vibes in an office as soon as you open the door. For that route I went first to the three-story building on Palmer Square, then in and out of the retail shops along Nassau and Witherspoon, chit chatting with the real estate people and the hoagie people — but when I opened the Princeton/Newport door — immediate shut down, icy cold. Initially I didn’t know what was wrong. Shy folks, I thought. Then I read the papers and realized what was going on.

I never got to do the Diane Henriques thing (Henriques is the NYT financial reporter who wrote the book on Bernie Madoff). I never did get to interview Jay Regan, the little fish caught in the Millken pool; it was a NYT and WSJ story. Thanks in part to big trouble” lawyer Theodore V. Wells Jr. of Paul, Weiss, Rifkind, Wharton, Garrison (headshot in the excerpt above), all but a few of the charges were dropped. It cost Regan six years of litigation; he is now general managing partner at Harbourton Enterprises on Hulfish Street.

Postscript I:  Diane B. Henriques is keynoting the Mercer Institute’s Executive Leadership Summit on Tuesday, October 9.

Postscript II: I can’t help but compare this account of the White-Collar World with The New Jim Crow, as exposed by Michelle Alexander. Untold millions are spent on defending against charges of white collar crime. Very little, reports Alexander, is spent on defending African Americans snared in the legal quagmire of required minimum sentences. For instance, statistics show showed that black teenagers disproportionately represented in the juvenile justice system in New Jersey.

Since the survey was done in 2004, some efforts have been made to correct the problem of how black juveniles are treated differently from white juveniles, but overall, I believe, this is a scandalous state and national problem. So do others in Princeton who are working, not just to raise everyone’s consciousness, but to actually change the system. I’ll be posting blogs about their work at Not in Our Town Princeton, and you’ll be hearing more about it from various sources in the coming months. It will be the topic for Continuing Conversations on Race on Monday, October 1, 7:30 p.m., at the Princeton Public Library. In the meantime, mention this post and get a discount on the Michelle Alexander book at Labyrinth Books.

Not everyone indicted for white collar crime is a criminal in our town. The same is true for those accused of other crimes, but not everyone has the money for the good lawyer. This results in a new caste system that can be far more damaging to African Americans than the indignity of separate drinking fountains


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