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The Clock Is Ticking
In the aftermath of the financial crisis, government regulatory agencies, such as the Securities and Exchange Commission (SEC), have aggressively pursued civil enforcement actions to combat financial fraud. Although these agencies already have many tools at their disposal, and clear advantages over private litigants, they have nevertheless pushed the envelope on their enforcement powers. However, their efforts to extend their ability to seek monetary penalties and fines outside of relevant limitations periods have been recently rebuffed by the courts. By doing so, courts have preserved an important safeguard against government overreach.
The Supreme Court of the United States, in Gabelli v. SEC, 133 S.Ct. 1216 (2013), and the District Court for the Southern District of New York, in SEC v. Straub (Straub II), No. 11 Civ. 9645 (RJS), 2016 WL 5793398 (S.D.N.Y. Sep. 30, 2016), rejected tolling arguments long used by government agencies to buy more time under the catch-all limitations period contained in 28 U.S.C. § 2462. Section 2462 provides that the government has five years to bring a civil enforcement action for violations that otherwise have no specific time limit. In Gabelli, the Supreme Court ruled that the equitable toll that prevents limitations periods for fraud-based claims from beginning to run until the plaintiff discovers the fraud — commonly known as the “discovery rule” — is unavailable in actions governed by § 2462, primarily because the equitable considerations underlying this tolling doctrine are inapplicable in the civil enforcement context. In Straub II, the district court ruled that § 2462's statutory text and legislative history foreclosed the SEC's argument that a defendant's presence outside bought the SEC more time to commence a civil enforcement action.
The DOJ's Corporate Enforcement Policy: One Year Later
The DOJ's Criminal Division issued three declinations since the issuance of the revised CEP a year ago. Review of these cases gives insight into DOJ's implementation of the new policy in practice.
The DOJ's New Parameters for Evaluating Corporate Compliance Programs
The parameters set forth in the DOJ's memorandum have implications not only for the government's evaluation of compliance programs in the context of criminal charging decisions, but also for how defense counsel structure their conference-room advocacy seeking declinations or lesser sanctions in both criminal and civil investigations.
Use of Deferred Prosecution Agreements In White Collar Investigations
This article discusses the practical and policy reasons for the use of DPAs and NPAs in white-collar criminal investigations, and considers the NDAA's new reporting provision and its relationship with other efforts to enhance transparency in DOJ decision-making.
Bankruptcy Sales: Finding a Diamond In the Rough
There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.
A Lawyer's System for Active Reading
Active reading comprises many daily tasks lawyers engage in, including highlighting, annotating, note taking, comparing and searching texts. It demands more than flipping or turning pages.