Abstract

In this study we try to explore the concept of Confidential Informants in a holistic context. The main focus of the research is on Confidential Informants and its Pros and Cons. The research also analyzes many aspects of Confidential Informants and tries to gauge its effect on Pros and Cons.

TABLE OF CONTENTS

Abstract1

Introduction3

Description and Analysis4

Use of informants and the use of trusted third parties (infiltrators) as part of prosecution5

Definitions6

Conditions of the guarantee of confidentiality / secrecy6

Extent and Consequences of the Guarantee7

Procedure8

Pros and Cons9

Goodfellas9

Conclusion10

Works Cited12

Pros and Cons of Confidential Informants

Introduction

Confidential informants are crucial to detecting and prosecuting corporate wrongdoing. Threats of retaliation and harm to reputation serve, however, as strong disincentives to corporate employees who consider stepping forward.

While individuals who report misconduct to the government can generally rely on the “informant's privilege” to preserve their anonymity if they do not testify, no similar privilege shields the identities of informants who speak to private plaintiffs or their counsel. As plaintiffs' law firms—particularly in securities cases subject to heightened pleading standards—have hired professional investigators and significantly expanded their pre- and post-filing investigations, the proper treatment of such private confidential informants has become increasingly important. Striking the proper balance between protecting informants' identities and fair disclosure to defendants now has significant consequences for plaintiffs, defendants, private litigation as a means of enforcing the nation's laws, the legal system's commitment to broad discovery, and informants' ability to perform their civic duty without professional martyrdom. The competing interests in shielding and disclosing informants' identities arise at three distinct stages of civil litigation:

(1) At the pleading stage, when informants' statements are used to

establish the legal sufficiency of a claim and defend against a motion to dismiss, particularly in securities cases subject to the heightened pleading standards imposed by the Private Securities Litigation Reform Act of 1995 (“PSLRA”) and Rule 9(b) of the Federal Rules of Civil Procedure.

(2) During discovery, when defendants' interrogatories often specifically request disclosure of plaintiffs' confidential informants.

(3) On a motion for summary judgment or at trial, when an informant's testimony is proffered to a judge or jury for use in determining the merits of the controversy.

This paper analyzes courts' treatment of confidential informants at each of these three stages. One of the parts evaluates confidential informants' value in enforcement actions and informants' need for anonymity.

Description and Analysis

At the pleading stage, courts shield informants' names but require that plaintiffs provide some identifying information. Slight differences in courts' formulations of what information must be disclosed, however, significantly affect the protection that informants receive. In camera review of witness statements and supporting documentation provides one mechanism, proposed infra, for insuring that meritorious securities fraud cases proceed while protecting defendants from unsupported claims. At the trial stage, the rule is simply stated: testifying informants must be named. Finally, the most difficult issues in balancing the competing interests in anonymity and disclosure present themselves during the discovery stage (Fitzgerald, 83).

Securities fraud cases on point have reached inconsistent results, and have generally failed to consider ...