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For companies suspected of wrongdoing, cooperating with Department of Justice (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. To gain cooperation credit for voluntary self-disclosure, companies are expected to identify all relevant facts relating to the individuals responsible for the alleged misconduct. And as part of demonstrating their cooperation to the government, companies often pressure their employees to submit to interviews, including with DOJ, or risk losing their jobs and/or indemnification of legal fees. Such scenarios, which have become prevalent in today’s corporate enforcement environment, place employees “between the rock and the whirlpool” by arguably coercing their testimony and infringing on their constitutional right against self-incrimination. See, Garrity v. New Jersey, 385 U.S. 493, 498 (1967).
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By Harry Sandick, Anna Blum and Abigail Marion
The Second Circuit's long-anticipated decision in United States v. Blaszczak limits the government’s ability to bring fraud or insider trading prosecutions where the information used to achieve an advantage is regulatory information held by the government. It also brings the Second Circuit in greater alignment with the Supreme Court’s wire fraud jurisprudence.
By Andrey Spektor and Laura S. Perlov
If you use Whatsapp or similar platforms for work-related communications, then you’ve probably heard that regulators are putting an end to that practice. Ephemeral and encrypted messaging, they have noted, evades monitoring and prevents retention. A seldom used doctrine allows prosecutors to charge executives with misdemeanor offenses just for being in the position of power when others commit the misconduct. Rather than take a wait-and-see approach, companies and their leaders would do well to prepare for prosecutors to reach deep into their toolbox.
By Evan T. Barr
Ever since the Honeycutt ruling by the U.S. Supreme Court in 2017 that co-conspirators convicted of federal narcotics violations could not be held jointly and severally liable, courts have grappled with whether it also applied outside the narcotics context, to forfeiture judgments imposed in white-collar cases.
By Maria Dinzeo
General counsel may find themselves pulled into difficult conversations with top executives as the Securities and Exchange Commission tightens its rules on company insiders looking to dump their stock.