Expert Witness Blog

Securities expert witnesses may consult and testify on securities regulation, securities fraud, and the securities industry. This month the SEC charged Wall Street traders Thomas Gonnella and Ryan King with a fraudulent “parking” scheme in which one trader temporarily placed securities in the other’s trading book. Gonnella arranged for King, who worked at a different firm, to purchase several securities with the understanding that Gonnella would repurchase them at a profit for King’s firm.

The alleged round-trip trades caused Gonnella’s firm to lose approximately $174,000. The SEC’s Enforcement Division alleges that after Gonnella’s supervisor began inquiring about the trades, Gonnella and King took steps to evade detection by interposing an interdealer broker in subsequent transactions and communicating by cell phone to avoid having conversations recorded by their firms. Gonnella and King were eventually fired by their firms for the misconduct.

SEC Press Release 2014-24 …King, who has cooperated with the SEC investigation, agreed to settle the charges by disgorging his profits and being barred from the securities industry. Any additional financial penalties will be determined at a later date. The Enforcement Division’s litigation against Gonnella continues in a proceeding before an administrative law judge.

In recent years, psychiatrists have been asked to consult on security clearance eligibility. In The Psychiatrist in the Security Clearance Process, psychiatry expert witness Brian Crowley, MD, DLFAPA, writes:

Psychiatrists are asked to participate in the security clearance process in either of two ways….

In the second scenario, a psychiatrist is asked to perform an independent psychiatric evaluation for an individual he has not met, addressing the issue of eligibility to obtain or to hold a security clearance. The evaluation may be requested either by a government agency or by an individual; in the latter case, he/she is usually represented by an attorney. Such an evaluation should be performed by a psychiatrist with considerable experience working at the interface of psychiatry and the law. While this is a forensic psychiatric procedure, in my view it does not require that the psychiatrist has taken a forensic fellowship – when I started working at the psychiatry/law interface there were no such fellowships – but it does take one who has deep knowledge and appreciation for how the law undergirds all psychiatric practice.

Hazardous waste expert witnesses may write reports and testify on hazardous waste sites, the Resource Conservation and Recovery Act (RCRA), and hazardous waste mapping. In the news, whistle-blower Donna Busche was fired from her position as manager of environmental and nuclear safety at the Hanford Nuclear Reservation waste treatment plant construction site. Hanford, located on the Columbia River in the state of Washington, ranks as the most polluted nuclear weapons production site in the US. The Columbia is the fourth largest river in the United States and drains into the Pacific. Hanford was a top secret project in the 1940s with the task of building the atomic bomb. Decades of plutonium production for US nuclear weapons have resulted in cleanup costs estimated at $2B/year. (Below is a Hanford exposure map,)

Ms. Busche worked for URS Corp., which is assisting in building a $12B plant to convert nuclear waste into glass but construction of the plant itself has been stopped due to safety concerns. Busche and others have filed complaints with the federal government over design and safety of the facility.

At http://www.whistleblowers.gov/, the US Department of Labor describes whistleblower protection programs.

On his blog, insurance claims expert witness and “Claims Coach” Kevin M. Quinley CPCU, AIC, ARM, RPA writes Risk Managers: Use These 8 Tips for Better Meetings with Underwriters.

The risk manager’s ability to procure insurance coverage and to do so on the best financial terns depends in large part on the discretion of the insurance underwriter. Underwriters are the insurance company gatekeepers. They decide whether or not to offer coverage terms and, if so, at what price.

Meet with Underwriter

In recent years, psychiatrists have been asked to consult in the security clearance process. In The Psychiatrist in the Security Clearance Process, psychiatry expert witness Brian Crowley, MD, DLFAPA, writes:

Psychiatrists are asked to participate in the security clearance process in either of two ways. First, treating psychiatrists are occasionally asked to give a professional opinion as to whether or not a patient, or former patient, is suitable for a security clearance. The doctor will receive a call or a fax from a federal investigator, usually asking to meet briefly with the doctor, and stating he has a release signed by the patient. Typically only one question is asked:

Does the person under investigation have a condition that could impair his or her judgment, reliability, or ability to properly safeguard classified national security information?