But for what? Is this a “chilling effect” strategy? Or something more? Gambling Subpoenas on Wall St.
The Justice Department has issued subpoenas to at least four Wall Street investment banks as part of a widening investigation into the multibillion-dollar online gambling industry, according to people briefed on the investigation.
The subpoenas were issued to firms that had underwritten the initial public offerings of some of the most popular online gambling sites that operate abroad. [...]
[...] Unable to go directly after the casinos, which are based overseas, they have sought to prosecute the operationsâ€™ American partners, marketing arms and now, possibly, investors.
The prosecutors may be emboldened by a law signed by President Bush last October that explicitly defined the illegality of running an Internet casino. Even before that law, the Unlawful Internet Gambling Enforcement Act, was adopted, the government said that Internet gambling was illegal under a 1961 provision.
[...] â€œIt appears that the Department of Justice is waging a war of intimidation against Internet gambling,â€ said I. Nelson Rose, a professor of law at Whittier Law School in Costa Mesa, Calif., who is an expert on Internet gambling law.
Another lawyer, Lawrence G. Walters of Altamonte Springs, Fla., said the development was disconcerting because the prevailing wisdom had been that investment in a company that is legal and licensed in its jurisdiction was not grounds for prosecution.
â€œIt would be the first time that that kind of liability has been imposed,â€ Mr. Walters said.
But he cautioned that the subpoenas could be part of a government fact-finding effort and might not signal a plan to prosecute banks.