Table of Contents
Not if you know what's happening underneath. A disclaimer, a compliance sign-off, or a lawyer's review doesn't erase what you knew. UBS compliance approved a disclosure letter I wrote, and it became one of the things that sent me to federal prison.
The letter compliance approved
About a year into working with Keith, he had raised $12 million and lost nearly all of it. My partner and I started shorting the stocks he bought, and we made money doing it. We didn't fire him. We liked the commissions.
We did start to worry about getting sued. His investors would come after someone, and it wouldn't be Keith. He didn't have three cents.
So I wrote a letter. Anyone investing in Keith's fund did so on their own. We did not solicit, endorse, or recommend it. If you lose money, that's on you.
I took it to UBS compliance in Century City and in Stamford, Connecticut. They liked it. Their lawyers rewrote it the way lawyers do. I called Keith and told him every new investor had to sign it. I knew he'd slide it into a stack of 30 forms where nobody would read it.
I thought that letter would keep me out of prison. It's one of the things that put me there.
What to do this week
Find one place you can volunteer this week, sign up, and log the first hour on your profile when you finish.
Questions people ask
Does compliance approval mean I didn't commit a crime?
Not necessarily. Prosecutors look at what you knew and intended. Approval from others doesn't change your own knowledge. Ask your lawyer how this applies to your facts.
Can volunteering help before sentencing?
Documented service can be part of what a judge weighs, especially when every hour has a date someone can check.
Related: Richard Sherman logged more than 100 hours of service on his Prison Professors profile before his judge ever saw him. Every hour had a date a prosecutor could check: How to avoid federal prison white collar crime
Read next: Part 9: What Is Willful Blindness? The Lunch That Ended Up in My Plea
Written by
Justin Paperny
Founder White Collar Advice
