IS THIS STILL JUST DOJ TALK? WHERE ARE THE INDICTMENTS? https://www.justice.gov/usao/justice-101/charging https://www.cohenmilstein.com/update/northwest-biotherapeutics-files-lawsuit-against-major-market-makers-market-manipulation $nwbo u/jhpratt2
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Friday, February 17, 2023 8:56:35 AM
Post# of 568694 GoIS THIS STILL JUST DOJ TALK? WHERE ARE THE INDICTMENTS?
https://www.justice.gov/usao/justice-101/charging
https://www.nytimes.com/2022/02/16/business/short-selling-stock-prices.html
Regulators are looking into whether short sellers improperly influenced stock prices.
Prominent short sellers including Carson Block and Andrew Left are said to have received search warrants as part of an ongoing investigation into possible manipulation of stock prices.
Give this article
Carson Block, the founder of Muddy Waters Research, was the subject of a search warrant.
Carson Block, the founder of Muddy Waters Research, was the subject of a search warrant.Credit...Brendan Mcdermid/Reuters
Matthew GoldsteinEmily Flitter
By Matthew Goldstein and Emily Flitter
Feb. 16, 2022
Some Wall Street investors have made a profession out of exposing companies with shoddy or even fraudulent operations while betting that their share prices will fall. But Justice Department officials have been looking into whether some of these activist investors, known as short sellers, may be taking their tactics too far.
Prominent short sellers including Carson Block and Andrew Left have received search warrants as part of an ongoing investigation into possible manipulation of stock prices, according to two people familiar with the investigation. Details of the investigation were reported earlier by Bloomberg News and The Wall Street Journal.
Mr. Block, the founder of Muddy Waters Research, was served with a search warrant in the fall, according to one person familiar with the investigation. A second person familiar with the investigation said Mr. Left, who runs Citron Research, also had records seized under a search warrant early last year. The people spoke on the condition of anonymity because the details of the investigation were not public.
Subpoenas issued to several investors as part of the inquiry have asked about the sharing of information between activists betting against companies, according to two people familiar with the matter.
ADVERTISEMENT
Continue reading the main story
Subpoenas can be routine requests for information, but search warrants are a sign of a deeper inquiry. They are more specific and frequently involve the seizure of documents and equipment.
Mr. Left declined to comment on Wednesday. He told Bloomberg this month that he was cooperating and had “full faith in the system.” Lawyers for Mr. Block’s firm had no immediate comment.
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A spokesman for the U.S. attorney’s office in Los Angeles, which is leading the investigation, declined to comment. A Securities and Exchange Commission spokesman also declined to comment.
Short selling involves betting that a company’s share price will fall: Investors borrow shares of a company and sell them with the plan to repurchase shares later at a lower price and return them to the lender. Then they pocket the difference.
It is a fairly common practice on Wall Street, and some short sellers will also publish research critical of a company’s operations as part of their bets. Reports distributed by short sellers have prompted regulators to look into companies including the electric-vehicle manufacturers Nikola and Lordstown Motors and the sports betting site DraftKings. William A. Ackman, the billionaire behind Pershing Square Capital Management, famously squared off against two other billionaires — Daniel S. Loeb and Carl C. Icahn — over the dietary supplement maker Herbalife a decade ago.
Editors’ Picks
Regulators Investigate Short Sellers Over Influence on Stock ...https://www.nytimes.com › short-selling-stock-prices
Feb 16, 2022 — Prominent short sellers including Carson Block and Andrew Left are said to have received search warrants as part of an ongoing investigation ...
Justice Department Targets ‘Spoofing’ and ‘Scalping’ in Short Seller Investigation
Muddy Waters’s Carson Block served with a search warrant in the probe of illegal trading tactics
image
Carson Block, the fiery short seller behind Muddy Waters, was served with a search warrant by an FBI agent in October, people familiar with the matter said.
PHOTO: VICTOR J. BLUE/BLOOMBERG NEWS
By Liz Hoffman and Justin Baer
Updated Feb. 16, 2022 2:24 pm ET
Federal prosecutors are investigating whether short sellers conspired to drive down stock prices by sharing damaging research reports ahead of time and engaging in illegal trading tactics, people familiar with the matter said.
The U.S. Justice Department has seized hardware, trading records and private communications in an effort to prove a wide-ranging conspiracy among investors who bet against corporate shares, the people said. One tactic under investigation is “spoofing,” an illegal ploy that involves flooding the market with fake orders in an effort to push a stock price up or down, they said. Another is “scalping,” where activist short sellers cash out their positions without disclosing it.
Carson Block, the fiery short seller behind Muddy Waters, was served with a search warrant by an FBI agent in October, said people familiar with the matter, one of whom added that the warrant extended to Mr. Block’s phones. Federal agents took computers belonging to Andrew Left, another prominent short seller, according to Bloomberg News, which previously reported the existence of an investigation.
Never the most popular camp on Wall Street, short sellers have had an especially bruising few years. Soaring stock markets, even through the pandemic, undercut their bearish bets. They were cast as villains last year by the meme-stock crowd, who delighted in forcing them into steep losses. Some have thrown in the towel altogether.
Still, they can play a crucial role in uncovering corporate frauds. One short seller helped turn up the heat on Enron. Others were early to sound the alarm on the 2008 financial crisis and more recent scandals including at Wirecard AG. Now they may have to defend themselves against a federal investigation, which is being led in part by the U.S. Attorney’s Office in Los Angeles, an office known for prosecuting organized crime rings.
image
Media reports on the investigation have compelled prominent short sellers such as Andrew Left to defend their actions.
PHOTO: BRENDAN MCDERMID/REUTERS
Spoofing is essentially high-speed bluffing, in which one trader dupes others into transacting at artificially high or low prices. A spoofer, for example, might offer to sell a big block of shares at $10 when the last sale was at $10.03. After other sellers rush to match the lower price, the spoofer quickly pivots, canceling his sell order and instead buying at the $10 price he generated with the fake offer. Repeated enough times, spoofing can produce big profits.
The tactic was outlawed in 2010. In 2016 a New Jersey commodities trader was sentenced to three years in prison, the government’s first criminal spoofing case and the beginning of a crackdown. The same year, the trader who was blamed for the 2010 “flash crash,” when the stock market lost and quickly regained almost $1 trillion in value, pleaded guilty to spoofing and was sentenced to a year’s house arrest. By 2020, the Justice Department had charged 20 people with spoofing-related crimes and collected more than $1 billion in fines from banks and other financial institutions.
Media reports on the current investigation have compelled prominent short sellers such as Messrs. Block and Left to defend their actions and highlight their success in uncovering corporate frauds. The investors and their lawyers have said they are confused by the Justice Department’s interest in their investing tactics and suspect the government has seized on academic research they believe has unfairly portrayed activist investors as bad actors who conspire to manipulate markets.
Columbia Law School professor Joshua Mitts, who published a 2020 academic paper entitled “Short and Distort” that was critical of short selling tactics, has been advising the Justice Department in its investigation, people familiar with the matter said.
There’s Nowhere to Hide From Falling Stocks and Bonds. Here’s Why.
YOU MAY ALSO LIKE
There’s Nowhere to Hide From Falling Stocks and Bonds. Here’s Why.
When stock prices sell off like they have so far in 2022, investors typically buy bonds to help stabilize portfolios and reduce losses. But right now, bond prices are falling too, leaving investors with nowhere to hide. WSJ's Dion Rabouin explains. Photo: Brendan McDermid/Reuters
Mr. Mitts has in the past also served as an expert for companies and executives, including Farmland Partners Inc. and Banc of California’s former CEO, that have sued short sellers, alleging they promoted false or misleading research. Shares of Banc of California fell by as much as 31% on Oct. 18, 2016, the day an anonymous analyst published a negative research report online.
Analyses performed by Mr. Mitts on those companies—prepared in private litigation, not for the Justice Department investigation—show that in the moments around the release of a short seller report, heavy volumes of sell orders are sent to exchanges and then canceled within fractions of a second, according to documents reviewed by The Wall Street Journal. That behavior, Mr. Mitts argues in the documents, is a telltale sign of spoofing.
“We are happy that the Justice Department is looking into this, as we have said for a long time our shareholders were the victims of an orchestrated ‘short-and-distort’ attack,” said Paul Pittman, chief executive of Farmland, whose shares fell 39% the day a Texas short seller accused the company of financial misdeeds in 2018.
Advertisement - Scroll to Continue
Farmland sued both an investment-research firm and a hedge fund, alleging they publicized a false and misleading report. The researcher later issued a public apology, a rare win for a company targeted in such a campaign.
Mr. Block said in a statement: “I’ve been saying for several years that it is critical for all stakeholders in the ecosystem to develop sophisticated data analysis capabilities to detect problematic trading. It’s dangerous to outsource these analyses to non-practitioners.”
Short sellers argue that, at least once, Mr. Mitts’s theories on spoofing didn’t hold up in court. In 2020, a U.K. High Court judge dismissed his findings that short sellers had relied on spoofing to drive down the stock price of Burford Capital Ltd., a litigation-finance firm. Burford had asked the court to force the London Stock Exchange to share confidential trading data on its shares after they dropped sharply; the court declined to issue the order.
It was Mr. Block’s Muddy Waters whose research report on Burford had triggered a 50% drop in the stock.
Julie Steinberg contributed to this article.
Write to Liz Hoffman at [email protected] and Justin Baer at [email protected]
Appeared in the February 17, 2022, print edition as 'U.S. Probes Trading Tactics Of Prominent Short Sellers'.
BREAKING
DOJ Investigates Short-Sellers For Potential Trading Abuses Including ‘Spoofing’ And ‘Scalping’
Sergei KlebnikovForbes Staff
I cover wealth management, money and markets.
Feb 16, 2022,12:03pm EST
TOPLINEThe U.S. Department of Justice is targeting dozens of prominent short-selling investment and research firms in a sweeping federal investigation that has gone on since last year, according to several reports, with prosecutors probing potentially illegal trading tactics.
Atmosphere at the New York Stock Exchange - 2/11/22
The vast DOJ probe has reportedly targeted nearly 30 short-selling firms and three dozen related ... [+]NDZ/STAR MAX/IPX
KEY FACTS
Federal prosecutors have seized hardware, trading records and private communications as part of a broad investigation into whether short-sellers used illegal trading tactics to drive down stock prices by sharing damaging research reports ahead of time, the Wall Street Journal reported on Wednesday.
The Justice Department has been collecting information on nearly 30 short-selling firms, as well as three dozen individuals associated with them, since late last year, Bloomberg similarly reported several weeks ago.
PROMOTED
Several of the illegal trading tactics under investigation, sources told the WSJ, include “spoofing”—essentially flooding the market with fake orders to drive a stock price up or down—and “scalping,” wherein activist shareholders cash out positions without disclosing it.
Several prominent short-sellers have already been caught up in the probe, including Muddy Waters’ Carson Block, who reportedly received an FBI search warrant that extended to his phones last October.
Federal agents in early 2021 also showed up at the home of and seized computers belonging to Andrew Left, the founder of Citron Research, according to Bloomberg, which first reported the vast DOJ investigation earlier this month.
Prominent firms and short-sellers also mentioned in DOJ requests for information include Melvin Capital and founder Gabe Plotkin, researcher Nate Anderson and Hindenburg Research, as well as Sophos Capital Management and Jim Carruthers, among others.
KEY BACKGROUND:
Short-sellers have rarely been a popular group of investors on Wall Street. Especially during the meme-stock mania of early 2021, the likes of Plotkin’s Melvin Capital were among those vilified by the army of retail traders and the Reddit “Wall Street Bets” crowd, who were driving up the price of stocks like GameStop and AMC Entertainment. The meme-stock crowd took pleasure in causing steep losses for short-sellers, forcing some to call it quits altogether (Andrew Left said after the GameStop craze that Citron would no longer publish short-selling research, for instance). On the flip side, however, short-sellers can still be important in uncovering corporate scandals (Enron or Wirecard AG, for example), not to mention several like Michael J. Burry, who helped warn of the impending financial crisis in 2008.
WHAT TO WATCH FOR:
The DOJ has yet to accuse any individuals or firms of wrongdoing, and opening a probe doesn’t necessarily mean anyone will face charges.
CRUCIAL QUOTE:
“It’s very tough to defend yourself when you haven’t been accused of anything,” Left told Bloomberg earlier this month. “I’m cooperating and I have full faith in the system and the First Amendment.”
FURTHER READING:
Two Senior Federal Reserve Staffers Made Trades Amid Central Bank’s 2020 Stimulus (Forbes)
Sergei Klebnikov
Follow
I am a staff writer at Forbes covering wealth management, money and markets. Previously, I worked on the breaking news and wealth teams at... Read More
0
Regulators are looking into whether short sellers improperly influenced stock prices.
Prominent short sellers including Carson Block and Andrew Left are said to have received search warrants as part of an ongoing investigation into possible manipulation of stock prices.
Give this article
Carson Block, the founder of Muddy Waters Research, was the subject of a search warrant.
Carson Block, the founder of Muddy Waters Research, was the subject of a search warrant.Credit...Brendan Mcdermid/Reuters
Matthew GoldsteinEmily Flitter
By Matthew Goldstein and Emily Flitter
Feb. 16, 2022
Some Wall Street investors have made a profession out of exposing companies with shoddy or even fraudulent operations while betting that their share prices will fall. But Justice Department officials have been looking into whether some of these activist investors, known as short sellers, may be taking their tactics too far.
Prominent short sellers including Carson Block and Andrew Left have received search warrants as part of an ongoing investigation into possible manipulation of stock prices, according to two people familiar with the investigation. Details of the investigation were reported earlier by Bloomberg News and The Wall Street Journal.
Mr. Block, the founder of Muddy Waters Research, was served with a search warrant in the fall, according to one person familiar with the investigation. A second person familiar with the investigation said Mr. Left, who runs Citron Research, also had records seized under a search warrant early last year. The people spoke on the condition of anonymity because the details of the investigation were not public.
Subpoenas issued to several investors as part of the inquiry have asked about the sharing of information between activists betting against companies, according to two people familiar with the matter.
ADVERTISEMENT
Continue reading the main story
Subpoenas can be routine requests for information, but search warrants are a sign of a deeper inquiry. They are more specific and frequently involve the seizure of documents and equipment.
Mr. Left declined to comment on Wednesday. He told Bloomberg this month that he was cooperating and had “full faith in the system.” Lawyers for Mr. Block’s firm had no immediate comment.
Dig deeper into the moment.
Special offer: Subscribe for $1 a week for the first year.
A spokesman for the U.S. attorney’s office in Los Angeles, which is leading the investigation, declined to comment. A Securities and Exchange Commission spokesman also declined to comment.
Short selling involves betting that a company’s share price will fall: Investors borrow shares of a company and sell them with the plan to repurchase shares later at a lower price and return them to the lender. Then they pocket the difference.
It is a fairly common practice on Wall Street, and some short sellers will also publish research critical of a company’s operations as part of their bets. Reports distributed by short sellers have prompted regulators to look into companies including the electric-vehicle manufacturers Nikola and Lordstown Motors and the sports betting site DraftKings. William A. Ackman, the billionaire behind Pershing Square Capital Management, famously squared off against two other billionaires — Daniel S. Loeb and Carl C. Icahn — over the dietary supplement maker Herbalife a decade ago.
Editors’ Picks
Regulators Investigate Short Sellers Over Influence on Stock ...https://www.nytimes.com › short-selling-stock-prices
Feb 16, 2022 — Prominent short sellers including Carson Block and Andrew Left are said to have received search warrants as part of an ongoing investigation ...
Justice Department Targets ‘Spoofing’ and ‘Scalping’ in Short Seller Investigation
Muddy Waters’s Carson Block served with a search warrant in the probe of illegal trading tactics
image
Carson Block, the fiery short seller behind Muddy Waters, was served with a search warrant by an FBI agent in October, people familiar with the matter said.
PHOTO: VICTOR J. BLUE/BLOOMBERG NEWS
By Liz Hoffman and Justin Baer
Updated Feb. 16, 2022 2:24 pm ET
Federal prosecutors are investigating whether short sellers conspired to drive down stock prices by sharing damaging research reports ahead of time and engaging in illegal trading tactics, people familiar with the matter said.
The U.S. Justice Department has seized hardware, trading records and private communications in an effort to prove a wide-ranging conspiracy among investors who bet against corporate shares, the people said. One tactic under investigation is “spoofing,” an illegal ploy that involves flooding the market with fake orders in an effort to push a stock price up or down, they said. Another is “scalping,” where activist short sellers cash out their positions without disclosing it.
Carson Block, the fiery short seller behind Muddy Waters, was served with a search warrant by an FBI agent in October, said people familiar with the matter, one of whom added that the warrant extended to Mr. Block’s phones. Federal agents took computers belonging to Andrew Left, another prominent short seller, according to Bloomberg News, which previously reported the existence of an investigation.
Never the most popular camp on Wall Street, short sellers have had an especially bruising few years. Soaring stock markets, even through the pandemic, undercut their bearish bets. They were cast as villains last year by the meme-stock crowd, who delighted in forcing them into steep losses. Some have thrown in the towel altogether.
Still, they can play a crucial role in uncovering corporate frauds. One short seller helped turn up the heat on Enron. Others were early to sound the alarm on the 2008 financial crisis and more recent scandals including at Wirecard AG. Now they may have to defend themselves against a federal investigation, which is being led in part by the U.S. Attorney’s Office in Los Angeles, an office known for prosecuting organized crime rings.
image
Media reports on the investigation have compelled prominent short sellers such as Andrew Left to defend their actions.
PHOTO: BRENDAN MCDERMID/REUTERS
Spoofing is essentially high-speed bluffing, in which one trader dupes others into transacting at artificially high or low prices. A spoofer, for example, might offer to sell a big block of shares at $10 when the last sale was at $10.03. After other sellers rush to match the lower price, the spoofer quickly pivots, canceling his sell order and instead buying at the $10 price he generated with the fake offer. Repeated enough times, spoofing can produce big profits.
The tactic was outlawed in 2010. In 2016 a New Jersey commodities trader was sentenced to three years in prison, the government’s first criminal spoofing case and the beginning of a crackdown. The same year, the trader who was blamed for the 2010 “flash crash,” when the stock market lost and quickly regained almost $1 trillion in value, pleaded guilty to spoofing and was sentenced to a year’s house arrest. By 2020, the Justice Department had charged 20 people with spoofing-related crimes and collected more than $1 billion in fines from banks and other financial institutions.
Media reports on the current investigation have compelled prominent short sellers such as Messrs. Block and Left to defend their actions and highlight their success in uncovering corporate frauds. The investors and their lawyers have said they are confused by the Justice Department’s interest in their investing tactics and suspect the government has seized on academic research they believe has unfairly portrayed activist investors as bad actors who conspire to manipulate markets.
Columbia Law School professor Joshua Mitts, who published a 2020 academic paper entitled “Short and Distort” that was critical of short selling tactics, has been advising the Justice Department in its investigation, people familiar with the matter said.
There’s Nowhere to Hide From Falling Stocks and Bonds. Here’s Why.
YOU MAY ALSO LIKE
There’s Nowhere to Hide From Falling Stocks and Bonds. Here’s Why.
When stock prices sell off like they have so far in 2022, investors typically buy bonds to help stabilize portfolios and reduce losses. But right now, bond prices are falling too, leaving investors with nowhere to hide. WSJ's Dion Rabouin explains. Photo: Brendan McDermid/Reuters
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Mr. Mitts has in the past also served as an expert for companies and executives, including Farmland Partners Inc. and Banc of California’s former CEO, that have sued short sellers, alleging they promoted false or misleading research. Shares of Banc of California fell by as much as 31% on Oct. 18, 2016, the day an anonymous analyst published a negative research report online.
Analyses performed by Mr. Mitts on those companies—prepared in private litigation, not for the Justice Department investigation—show that in the moments around the release of a short seller report, heavy volumes of sell orders are sent to exchanges and then canceled within fractions of a second, according to documents reviewed by The Wall Street Journal. That behavior, Mr. Mitts argues in the documents, is a telltale sign of spoofing.
“We are happy that the Justice Department is looking into this, as we have said for a long time our shareholders were the victims of an orchestrated ‘short-and-distort’ attack,” said Paul Pittman, chief executive of Farmland, whose shares fell 39% the day a Texas short seller accused the company of financial misdeeds in 2018.
Advertisement - Scroll to Continue
Farmland sued both an investment-research firm and a hedge fund, alleging they publicized a false and misleading report. The researcher later issued a public apology, a rare win for a company targeted in such a campaign.
Mr. Block said in a statement: “I’ve been saying for several years that it is critical for all stakeholders in the ecosystem to develop sophisticated data analysis capabilities to detect problematic trading. It’s dangerous to outsource these analyses to non-practitioners.”
Short sellers argue that, at least once, Mr. Mitts’s theories on spoofing didn’t hold up in court. In 2020, a U.K. High Court judge dismissed his findings that short sellers had relied on spoofing to drive down the stock price of Burford Capital Ltd., a litigation-finance firm. Burford had asked the court to force the London Stock Exchange to share confidential trading data on its shares after they dropped sharply; the court declined to issue the order.
It was Mr. Block’s Muddy Waters whose research report on Burford had triggered a 50% drop in the stock.
Julie Steinberg contributed to this article.
Write to Liz Hoffman at [email protected] and Justin Baer at [email protected]
Appeared in the February 17, 2022, print edition as 'U.S. Probes Trading Tactics Of Prominent Short Sellers'.
BREAKING
DOJ Investigates Short-Sellers For Potential Trading Abuses Including ‘Spoofing’ And ‘Scalping’
Sergei KlebnikovForbes Staff
I cover wealth management, money and markets.
Feb 16, 2022,12:03pm EST
TOPLINEThe U.S. Department of Justice is targeting dozens of prominent short-selling investment and research firms in a sweeping federal investigation that has gone on since last year, according to several reports, with prosecutors probing potentially illegal trading tactics.
Atmosphere at the New York Stock Exchange - 2/11/22
The vast DOJ probe has reportedly targeted nearly 30 short-selling firms and three dozen related ... [+]NDZ/STAR MAX/IPX
KEY FACTS
Federal prosecutors have seized hardware, trading records and private communications as part of a broad investigation into whether short-sellers used illegal trading tactics to drive down stock prices by sharing damaging research reports ahead of time, the Wall Street Journal reported on Wednesday.
The Justice Department has been collecting information on nearly 30 short-selling firms, as well as three dozen individuals associated with them, since late last year, Bloomberg similarly reported several weeks ago.
PROMOTED
Several of the illegal trading tactics under investigation, sources told the WSJ, include “spoofing”—essentially flooding the market with fake orders to drive a stock price up or down—and “scalping,” wherein activist shareholders cash out positions without disclosing it.
Several prominent short-sellers have already been caught up in the probe, including Muddy Waters’ Carson Block, who reportedly received an FBI search warrant that extended to his phones last October.
Federal agents in early 2021 also showed up at the home of and seized computers belonging to Andrew Left, the founder of Citron Research, according to Bloomberg, which first reported the vast DOJ investigation earlier this month.
Prominent firms and short-sellers also mentioned in DOJ requests for information include Melvin Capital and founder Gabe Plotkin, researcher Nate Anderson and Hindenburg Research, as well as Sophos Capital Management and Jim Carruthers, among others.
KEY BACKGROUND:
Short-sellers have rarely been a popular group of investors on Wall Street. Especially during the meme-stock mania of early 2021, the likes of Plotkin’s Melvin Capital were among those vilified by the army of retail traders and the Reddit “Wall Street Bets” crowd, who were driving up the price of stocks like GameStop and AMC Entertainment. The meme-stock crowd took pleasure in causing steep losses for short-sellers, forcing some to call it quits altogether (Andrew Left said after the GameStop craze that Citron would no longer publish short-selling research, for instance). On the flip side, however, short-sellers can still be important in uncovering corporate scandals (Enron or Wirecard AG, for example), not to mention several like Michael J. Burry, who helped warn of the impending financial crisis in 2008.
WHAT TO WATCH FOR:
The DOJ has yet to accuse any individuals or firms of wrongdoing, and opening a probe doesn’t necessarily mean anyone will face charges.
CRUCIAL QUOTE:
“It’s very tough to defend yourself when you haven’t been accused of anything,” Left told Bloomberg earlier this month. “I’m cooperating and I have full faith in the system and the First Amendment.”
FURTHER READING:
Two Senior Federal Reserve Staffers Made Trades Amid Central Bank’s 2020 Stimulus (Forbes)
Sergei Klebnikov
Follow
I am a staff writer at Forbes covering wealth management, money and markets. Previously, I worked on the breaking news and wealth teams at... Read More
After the prosecutor studies the information from investigators and the information they gather from talking with the individuals involved, the prosecutor decides whether to present the case to the grand jury. When a person is indicted, they are given formal notice that it is believed that they committed a crime. The indictment contains the basic information that informs the person of the charges against them.
For potential felony charges, a prosecutor will present the evidence to an impartial group of citizens called a grand jury. Witnesses may be called to testify, evidence is shown to the grand jury, and an outline of the case is presented to the grand jury members. The grand jury listens to the prosecutor and witnesses, and then votes in secret on whether they believe that enough evidence exists to charge the person with a crime. A grand jury may decide not to charge an individual based upon the evidence, no indictment would come from the grand jury. All proceedings and statements made before a grand jury are sealed, meaning that only the people in the room have knowledge about who said what about whom. The grand jury is a constitutional requirement for certain types of crimes (meaning it is written in the United States Constitution) so that a group of citizens who do not know the defendant can make an unbiased decision about the evidence before voting to charge an individual with a crime.
Grand juries are made up of approximately 16-23 members. Their proceedings can only be attended by specific persons. For example, witnesses who are compelled to testify before the grand jury are not allowed to have an attorney present. At least twelve jurors must concur in order to issue an indictment.
The federal courthouse in Minneapolis is one of the venues for the District of Minnesota.
The federal courthouse in Minneapolis is one of the venues for the District of Minnesota.
States are not required to charge by use of a grand jury. Many do, but the Supreme Court has interpreted the Constitution to only require the federal government to use grand juries for all felony crimes (federal misdemeanor charges do not have to come from the federal grand jury).
After the defendant is charged, they can either hire an attorney or if they are indigent they may choose to be represented by an attorney provided by the Government — a public defender — at no or minimal charge. The defendant’s attorney is referred to as the defense attorney. The defendant's attorney assists the defendant in understanding the law and the facts of the case, and represents the defendant just as the prosecutor will represent the Government.
Venue
The location where the trial is held is called the venue, and federal cases are tried in a United States District Court. There are 94 district courts in the United States including the District of Columbia and territories. Many states have more than one district court so the venue will depend on where you live in the state. Within each district, there may be several courthouse locations. Click here to see if you can find the one closest to your neighborhood.
Investigation
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