U.S. authorities, as well as defense attorneys, need to ramp up their understanding of complex financial instruments as populist anger puts pressure on the government to bring more business fraud cases, a top U.S. defense lawyer said on Friday.

Mary Jo White, a former U.S. Attorney in Manhattan and now an attorney at law firm Debevoise & Plimpton LLP, said she fears such a frenzied climate could lead to misguided prosecutions or regulatory enforcement actions against defendants -- though she has not seen evidence of that yet.

Both government attorneys and those representing executives caught up in probes need a better understanding of complex financial instruments such as credit default swaps as they work on these cases.

It is a steep learning curve to understand the markets, to understand the instruments, and so if you don't become quite expertised, you may jump to the wrong conclusion, White said at the Reuters Global Financial Regulation Summit in New York.

Lawyers aren't natural experts in trading, she said.

The tough times on Wall Street that have left many traders jobless could be an opportunity both for regulators and prosecutors, as well as law firms, to add this kind of expertise to their staffs, she said.

White led the U.S. Attorney's Office in Manhattan for nine years, departing in January 2002. She is now chair of Debevoise's litigation department, and represents individual and corporate clients in various white-collar criminal and business litigation matters.

In one recent case, she has been hired to represent The Carlyle Group CYL.UL in a probe by the New York attorney general over whether investment firms made improper payments to secure investments from New York state's pension fund. Carlyle has said it has fully cooperated with the investigation.

White told the Reuters summit that amid a populist frenzy in which many people are angry over the troubled economy, she worries that some executives could be accused wrongly in either criminal prosecutions or regulatory enforcement actions.

I have a lot of faith in the enforcement authorities that they really try to do their job right, she said, but she said she worried about the possibility you will end up with a senior executive or a not-so-senior executive being criminally or civilly charged when they really should not be.

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