Managing Partner Jonathan Gardner and Chief Investigative Officer Amy Greenbaum are authors of the insightful article “Securities Class Action: Confidential Witness Checklist” published by LexisNexis, a comprehensive roadmap detailing the best practices for ethically and effectively developing and managing confidential witnesses (CWs) in a securities fraud case.

In the guide, Jonathan and Amy assert that that the foundation of any successful Section 10(b) securities fraud case lies in a rigorous and strategic investigation.  At the heart of this process is the development of credible CWs who can provide critical insight into the alleged misconduct from inside the company.  Properly identifying, interviewing, and managing CWs can significantly strengthen the pleading of falsity, scienter, and loss causation—core elements of a Section 10(b) claim.  But developing CWs is also fraught with risk if not handled with care, discretion, and full compliance with legal and ethical obligations.  Investigative missteps can jeopardize the integrity of the case or compromise a CW’s willingness to participate.  As such, investigators and securities litigators must adhere to best practices at every stage of the investigation to ensure reliability, consistency, and accuracy.  The following checklist provides a comprehensive roadmap for conducting investigations and working with CWs effectively.