Securities fraud plea bargain

By — on / Daily, Negotiation Skills

The Clearinghouse at PON offers hundreds of role simulations, from two-party, single-issue negotiations to complex multi-party exercises. United States v. Dunlop is a four-person, three-issue, two-round exercise between U.S. prosecutors, an executive charged with securities fraud, and defense counsel over the terms of a possible plea bargain; attorney-client interviews are followed by a plea bargain negotiation.


This case is a two-part negotiation involving four parties: a U.S. Attorney, an Assistant U.S. Attorney, a white-collar criminal defense attorney, and a white-collar criminal defendant. The first part of the case involves client interviews: the defense attorney interviews defendant Allen Dunlop, and the Assistant U.S. Attorney interviews the U.S. Attorney to determine their interests and how to represent them. The second part of the case involves a negotiation between the Assistant U.S. Attorney and the defense attorney about the fate of the defendant. An optional third part of the case may be used, in which the Assistant U.S. Attorney and the defense attorney brief their clients on the outcomes.

The case is a negotiation of a plea bargain agreement for a defendant accused of securities fraud. Specifically, the defendant is accused of violating Federal Securities Laws by employing manipulative and deceptive business practices to make his company’s stock (“Moonbeam, Inc.”) look more attractive to investors. The main issues to be decided in plea bargain negotiations are what if any prison time will the defendant serve and in what type of facility, how much of a fine will he have to pay and to whom shall he pay the fine, and whether or not the defendant will have to accept a bar on serving as an officer or director of a public corporation in the future, and for how long will such a bar be effective. In addition to resolving these issues, both sides must deal with the tension between their own interests, the interests of the other side, and the interests of their clients.

Teaching Points/Objectives

This case involves attorney-client interaction. The participants playing the role of Assistant U.S. Attorney and defense attorney have to give their clients a thorough interview and gain their clients’ trust in order to successfully determine their interests. On the other side, the U.S. Attorney and the defendant must decide how much information to give their attorneys so that they negotiate the best outcome.

This case also involves principal-agent tension. The Assistant U.S. Attorney and defense attorney must reconcile the tension between their clients’ interests, their own interests, and the best interest of society.

The case illustrates relationship building. A successful outcome will account for the fact that the U.S. Attorney, the Assistant U.S. Attorney, and defense attorney will have to work together again frequently in the future.

The case provides many opportunities for value creation. Participants should find several options and combinations of agreements that can benefit both sides of the negotiation.


Participant materials include:

  • Confidential Instructions for Defendant Allen Dunlop
  • Confidential Instructions for Dunlop’s Attorney
  • Confidential Instructions for Assistant U.S. Attorney Janet Lee
  • Confidential Instructions for U.S. Attorney Mitch Rubin

Teacher’s package includes:

  • All of the above
  • Teaching note

To purchase this role simulation, click here.

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3 Responses to “Securities fraud plea bargain”

  • Securities A.

    Good article and a great exercise. I would bring financial considerations into the analysis very strongly. The amount of funds defendant has, their reputation, and other ongoing business activities often play a role in how far a defendant takes a matter before settling.

    FINRA Arbitration Attorney

  • Not every person accused of a crime ultimately demands that the government meet the standard. As a practical matter, many defendants opt out of trial without requiring the government to prove its case, instead electing to make a plea bargain with the prosecutor.

    Nice to share…..

    Securities Fraud Attorney

  • nick.henrey n.

    Great topic!
    But personally, in my own opinion, I say forget about who should give who punishment and what should or should have been done. I am not a big fan of the Law and that’s why whether or not Karal.

    Thanks For Sharing..

    Stock Fraud Attorney


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