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Business Crimes Bulletin
Conducting Internal Investigations During the COVID-19 Pandemic
Jacqueline C. Wolff, Scott T. Lashway, and Matthew M.K. Stein
In times of crisis, criminal activity — particularly crimes involving theft and fraud — tend to spike. There is no reason to believe that the Covid-19 pandemic and the unrest in the financial markets will be any different. An important difference for company counsel, however, will be in how the malfeasance, negligence or wrongdoing can be investigated.
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Business Crimes Bulletin
Force Majeure and the Doctrine of Impossibility
John Kelly
The COVID-19 pandemic is resulting in landlords and tenants closely reviewing a clause in their lease that was long considered unimportant boilerplate. Yes, we are referring to the “force majeure” provision.
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Business Crimes Bulletin
New Normal Sets In for White-Collar Lawyers in the Virus Era
C. Ryan Barber
In a practice that prizes in-person meetings, virtual communication has become commonplace.
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Business Crimes Bulletin
The Importance of ‘Particulars’ in Criminal Fraud Cases
Elkan Abramowitz and Jonathan Sack
This article discusses the standard for ordering a bill of particulars in the Second Circuit, drawing a comparison with the standard for civil fraud claims, and then describes a recent decision ordering a bill of particulars in the high-profile prosecution growing out of the Theranos blood-testing scandal. The decision in that case highlights the importance of seeking bills of particulars in fraud cases.
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Business Crimes Bulletin
Attorney Proffers: Practical Considerations and Some Law Too
Robert J. Anello and Richard F. Albert
Handled with care, an attorney proffer can provide a critical opportunity to gauge a prosecutor’s reaction while limiting the risk of compromising the client’s potential defense at trial.
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Business Crimes Bulletin
Agency: A New Frontier for FCPA Jurisdiction
Darren LaVerne, Michael Martinez and Eric Rosoff
The Hoskins case highlighted the manner by which the DOJ (and the SEC, which has civil enforcement jurisdiction under the FCPA) can harness the common-law doctrine of agency to expand the reach of the statute.
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Business Crimes Bulletin
Stockholder Derivative Litigation Update
Joseph M. McLaughlin and Shannon K. McGovern
The Delaware Court of Chancery recently addressed a nearly unprecedented issue: the discovery and privilege implications of a special litigation committee’s (SLC) decision to hand over control of a company claim to a stockholder derivative plaintiff who initiated the claim and survived a motion to dismiss.
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Business Crimes Bulletin
SEC Proposes Changes to Accredited Investor Definition
Peter Fass
The definition of “accredited investor” uses income and net worth thresholds to identify natural persons as accredited investors.
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Business Crimes Bulletin
Biometrics and the Fifth Amendment: A New Frontier
Jonathan S. Feld, Jason Ross and Amelia Marquis
When used for work, mobile devices routinely contain employers’ proprietary and confidential data. The struggle between Government requests for access to such data and constitutional protections — including the Government’s ability to compel the turnover of biometric “keys” to unlock mobile devices — create areas of concern.
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Business Crimes Bulletin
When Is a Promise Enough?: Contractual Duties and Insider Trading
Telemachus P. Kasulis
Two criminal appeals before the Second Circuit require the Court of Appeals to decide whether the violation of a fiduciary relationship is required to create insider trading liability or if a breach of contract is sufficient.
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Business Crimes Bulletin
Second Circuit Upholds Title 18 Insider-Trading Conviction Where Title 15 Elements Not Established
Matthew D. Feil and Andrew M. Serrao
Will Prosecutors Take Advantage?
The recent decision in United States v. Blaszczak may signal a change in how prosecutors in the Second Circuit, and perhaps in other jurisdictions, pursue insider-trading cases.
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Business Crimes Bulletin
Business Crimes Hotline
Former Barbados Government Official Convicted on U.S. Money Laundering Charges Following Insurance Company of Barbados FCPA Settlement
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Business Crimes Bulletin
In the Courts
Juliet Gunev
UK Founder of Swiss Asset Management Firm Pleads Guilty in $164 Million Global Securities Fraud Scheme
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Business Crimes Bulletin
Challenge to SEC’s Disgorgement Authority Reaches Supreme Court
Jodi Misher Peikin and Jacob Mermelstein
The U.S. Supreme Court granted certiorari in Liu v. Securities and Exchange Commission to address a question that, until fairly recently, seemed clear: whether the SEC has authority to obtain disgorgement in civil actions to enforce the federal securities laws.
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Business Crimes Bulletin
Supreme Court Asked to Assess Per Se Rule Tension in Criminal Antitrust
Robert J. Anello and Richard F. Albert
In recent years, practitioners have observed a tension between criminal enforcement of the broadly written terms of the Sherman Antitrust Act of 1890 and the modern Supreme Court’s notions of statutory interpretation and due process in the criminal law context. A certiorari petition filed in late August in Sanchez et al. v. United States, asks the Supreme Court to address this tension, as embodied in the judge-made per se rule.
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Business Crimes Bulletin
When to Involve a Forensic Accountant in Your White-Collar Criminal Case
Sareena Malik Sawhney
Over the past few years, defense attorneys have been turning to forensic accountants significantly more often in white-collar cases. An experienced and skilled forensic accountant is valuable to the defense team by casting reasonable doubt on the issue of intent and uncovering other evidence in support of innocence or a reduced sentence.
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Business Crimes Bulletin
In The Courts
Juliet Gunev
Maryland Jury Convicts Former Executive on FCPA Charges for Bribing Russian Official to Win Nuclear Fuel Transportation Contracts
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Business Crimes Bulletin
Less Isn’t Always More: 1001(a)(1) Concealment Charges in Voluntary Disclosure Submissions
Paige Ammons and Preston Burton
In any investigation where a client is deposed or interviewed by a government agent, experienced lawyers should be wary of potential false statement liability and likely will have advised their clients of the paramount need to be truthful. Voluntary communications, initiated by a company or individual, with government officials are of a different ilk, however
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Business Crimes Bulletin
Supreme Court’s October Term 2018 Contains Hints of Things to Come
Harry Sandick and Tara Norris
Part Two of a Two-Part Article
In Part One of this article last month, we discussed several of the key business crimes cases from the recently concluded October Term 2018. We resume this discussion in Part Two of our article and offer some concluding thoughts about where the Court may go next in the years to come.
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Business Crimes Bulletin
Insider Trading Policies and Cybersecurity
Michael J. Rivera and Abby I. Yi
Cybersecurity has been a high priority topic for the SEC the past few years. In September 2017, the SEC created a Cyber Unit within its Enforcement Division. This Cyber Unit had over 225 active investigations at the SEC’s 2018 fiscal year end. The SEC has focused in particular on cybersecurity risks facing public companies.
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Business Crimes Bulletin
In the Courts
Juliet Gunev
Maryland’s Largest Ever Ponzi-Scheme: Kevin Merrill Sentenced to 22 Years in Prison for $396 Million Consumer Debt Fraud
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Business Crimes Bulletin
Business Crimes Hotline
Juliet Gunev
Former Keppel Lawyer Who Cooperated with U.S. Government Fined and Sentenced to Probation for His Role in Petrobras Bribery Scheme
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Entertainment Law & Finance
Can Video Game Companies Be Liable for Users’ Money Laundering?
Frank Ready
Criminals are hoping to use video game platforms to score more than just points. By using ill-gotten gains to purchase in-game currency that can then be exchanged for real cash, bad actors have found a way to launder money that is difficult for both gaming providers and the authorities to track.
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Business Crimes Bulletin
It’s Getting Chilly: Federal Courts Continue to Wrestle With Impact of Aggressive DOJ Public Corruption Cases
Joseph F. Savage Jr. and Christopher J.C. Herbert
In an environment of aggressive federal prosecution and regulation both businesses and public officials are challenged to identify the permissible line between proper financial transactions — things like campaign contributions and business entertainment — and unlawful payments. And, in what the First Circuit called a “novel theory of Hobbs Act extortion,” public officials now have to struggle with the scope of permissible advocacy — when does advocacy for constituents become extortion?
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Business Crimes Bulletin
Supreme Court’s October Term 2018 Contains Hints of Things to Come
Harry Sandick and Tara Norris
Part One of a Two-Part Article
In its recently ended October Term 2018, the U.S. Supreme Court decided several notable criminal law decisions that will have a meaningful impact on white-collar practitioners’ work and, importantly, offer clues regarding the movement of the criminal law in subsequent terms. In this two-part article, we review several of the key decisions and consider their implications, both for practitioners in this area and for Court-watchers interested in future Court decisions.
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Business Crimes Bulletin
SEC’s Reboot on Waiver Requests in Enforcement Settlements
Robert J. Anello and Richard F. Albert
SEC Chairman Jay Clayton recently announced a change in how the SEC will consider requests for waivers of certain serious collateral consequences that would otherwise result from settlement of an SEC enforcement action. These collateral consequences, often referred to as “bad actor” or “bad boy” provisions, can vary greatly and may disqualify an entity from conducting certain business or utilizing certain means to offer securities.
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Business Crimes Bulletin
Business Crimes Hotline
Juliet Gunev
Canadian Clean Fuel Technology Company and Former CEO Pay $4.1 Million to Settle China Related FCPA Case
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Business Crimes Bulletin
In the Courts
Juliet Gunev
New York Brokerage and Two Executives Ordered to Pay $1.58 Million for Misleading Investors In High-Yield Securities Case
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Business Crimes Bulletin
Immigration Form I-9: A Form That Can Have Severe Consequences
Marjorie J. Peerce, Dennis Burke and Maya Salah
This article addresses the history of Form I-9 and current initiatives underway by DHS.
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Business Crimes Bulletin
Crowdfunding, Reg D and Reg A
Jacqueline C. Wolff and Brian S. Korn
The New Routes for Access to Capital and the Potential Legal and Regulatory Risks
Although the business community lauded the arrival of new crowdfunding laws, the enforcement community has had a different take on them. As stated in 2017 by then Deputy Attorney General Rod Rosenstein: “The potential downside of crowdfunding is that it occurs outside the watchful eye of a regulated banking and financial industry. Unregulated websites therefore provide a platform for criminals to defraud potential investors.”
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Business Crimes Bulletin
“Mismarking”: Developments in Valuation Fraud
Telemachus P. Kasulis
As the DOJ expands its mismarking inquiries beyond stocks and bonds and into areas like private equity, recent cases illuminate the increasing need for robust internal controls designed to eliminate the incentives for an employee or manager to overvalue assets.
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Business Crimes Bulletin
In the Courts
Juliet Gunev
New Developments In Och-Ziff FCPA Settlement As Brooklyn Judge Grants Victim Status to Former Investors In Restitution Claim over Lost African Mining Venture
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Business Crimes Bulletin
Business Crimes Hotline
Juliet Gunev
Former Cognizant Technology COO Settles FCPA Case In Relation to India Office Construction Project
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Business Crimes Bulletin
‘Mixed Messages’: DOJ Efforts to Dismiss Qui Tam Actions
Jonathan S. Feld and Katie J. Welch
Despite the historical trend of reduced government involvement in qui tam actions, the government is sending “mixed messages” regarding its view of FCA relators.
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Business Crimes Bulletin
They’re Baaaaack. Disclosure-Based 14(A) Claims Making a Ghostly Return
Johanna Fricano
Following the Delaware Chancery Court’s ruling in In re Trulia, Inc. that effectively closed the door to 14(a) disclosure-based settlements in Delaware state court, federal courts saw an influx of 14(a) “merger objection” litigation. More often than not, these suits are quickly dismissed following the company’s issuance of a supplemental proxy with additional disclosures and the parties negotiate a mootness fee. The transaction closes and all parties move on — or so we thought. An emerging trend suggests that exposure to 14(a) claims may coming back from the near dead.
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Business Crimes Bulletin
Epstein Saga Puts Spotlight on Crime Victim’s Rights Act
Robert J. Anello and Richard F. Albert
The significance of the Crime Victims’ Rights Act (CVRA), which is intended to guarantee crime victims a role in federal criminal proceedings, has been highlighted in the case of Jeffrey E. Epstein, the financier accused of sexually trafficking underage girls. Because the government’s noncompliance with the CVRA in negotiating Epstein’s plea deal in 2008 led to Alexander R. Acosta losing his cabinet position as Secretary of Labor, practitioners can expect prosecutors and judges to be more focused on the CVRA going forward.
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Business Crimes Bulletin
Business Crimes Hotline
Juliet Gunev
Microsoft and Hungarian Subsidiary Agree to Pay $25 Million to Resolve FCPA Investigations in Hungary, Saudi Arabia, Turkey and Thailand
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Business Crimes Bulletin
In The Courts
Juliet Gunev
Maryland Jury Convicts Former CEO of Israeli Company for Role In $145 Million Binary Options Fraud
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Business Crimes Bulletin
Compliance Officers: Recent Regulatory Guidance and Enforcement Actions and Mitigating the Risk of Personal Liability
Patrick Campbell, Jonathan New and Madison Gaudreau
This article explores legal developments over the past year that may impact compliance officer personal liability.
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Business Crimes Bulletin
Insider Trading Rules Still Not Clear
John C. Coffee Jr.
It has been nearly 60 years since the SEC first clearly prohibited insider trading. You would think that would be long enough for the doctrinal rules to have become reasonably clear. Think again!
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Business Crimes Bulletin
Tech Companies Snapping Up White-Collar Lawyers
Xiumei Dong
As Silicon Valley technology companies face increasing government scrutiny, experienced white-collar practitioners are becoming hot commodities among the law firms seeking to represent tech-focused clients.
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Business Crimes Bulletin
Business Crimes Hotline
Juliet Gunev
Walmart and Brazillian Subsidiary Reach $282 Million Settlement with the DOJ and SEC to Resolve FCPA Investigations
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Business Crimes Bulletin
In the Courts
Juliet Gunev
Platinum Partners’ Executives Convicted Over $150 Million Bond Scheme; Acquitted on Billion Dollar Fraud Allegations
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Business Crimes Bulletin
The International Encryption Debate: Privacy Versus Big Brother
Robert J. Anello and Richard F. Albert
Although increased reliance on technology such as emails and texts has provided greater opportunity to gather evidence of criminal activity, law enforcement agencies around the world complain that encryption technologies make it difficult to catch criminals and terrorists and therefore should be restricted.
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Business Crimes Bulletin
Carnival Execs May Face Criminal Charges Over Compliance Failures
Sue Reisinger
Once again a company has felt the pain that comes when it is caught violating an agreement with the Department of Justice. After taking a tongue lashing from a federal judge for repeatedly violating the law, Carnival Corp. executives have until autumn to hire a chief compliance officer and begin meaningful compliance reforms at the world’s largest cruise line.
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Business Crimes Bulletin
The Yates Memo is Here to Stay: Signs of Increasing Efforts to Hold Individuals Criminally Liable for Corporate Wrongdoing
Carolyn H. Kendall and Yune D. Emeritz
It is axiomatic that companies cannot do wrong without the actions of individuals. However, the trend over the past few decades, with a few exceptions, has been that individuals generally were not prosecuted for their roles in corporate wrongdoing that harmed the public welfare. However, there appears to be a recent escalation in prosecutions of corporate executives.
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Business Crimes Bulletin
How to Respond to a Search Warrant
Marjorie Peerce and Mark S. Kokanovich
Imagine you are in-house counsel, working on a transactional document, when you receive a breathless call from a manager at one of your warehouses that a search warrant is being executed on the premises. What do you do?
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Business Crimes Bulletin
DOJ Corporate Enforcement Guidelines Are Placing Individual Defendants Between a Rock and a Whirlpool
David S. Krakoff, Bradley A. Marcus and Nadav Ariel
For companies suspected of wrongdoing, cooperating with DOJ investigations and self-disclosing their misconduct often appears to be their only option to avoid prosecution and reduce large financial penalties. But, these benefits often come at a price, especially to company employees who are caught in the middle.
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Business Crimes Bulletin
Carrot Replaces Stick: Corporate Crime Enforcement In the Trump Administration
Joseph F. Savage, Jr. and Marielle Sanchez
Elections have consequences, and the election of President Trump has resulted in a significant shift in law enforcement priorities. Corporate enforcement activity is at lows not seen in decades, despite an overall increase in federal criminal cases. This is a product of a change in priorities, both in terms of types of offenses and types of offender. So, for the time being, there will be almost unprecedented opportunity to achieve favorable resolutions for corporate clients.
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Business Crimes Bulletin
Judicial Skepticism Mounts Over the Use and Reach of Appellate Waivers
Harry Sandick and Danielle Quinn
A defendant who pleads guilty is usually required to waive a host of constitutional and statutory rights, such as the right to a jury trial, the right to confront and cross-examine adverse witnesses, the right to testify and present evidence. However, many defendants are also required to waive their right to appeal in order to receive a favorable plea agreement with the government.
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