Juror Dismissal During Deliberations
You've endured the roller coaster of a white-collar trial and hold out hope that protracted jury deliberations may presage an acquittal. But then the trial judge dismisses, for refusal to deliberate, a juror who may favor your client, installs an alternate and directs that deliberations begin anew. A guilty verdict and prison sentence ensue. It can happen; it did recently. In this age of protracted financial fraud and public corruption trials, it raises interesting cautionary issues for the white-collar defense lawyer.
In the Courts
Recent rulings of interest to you and your practice.
What to Do When an Audit Committee Complaint Arrives
Much attention has been paid to the requirements of the Sarbanes-Oxley Act (SOX) and the stock exchanges and Nasdaq that issuers establish procedures under which their audit committees can receive complaints, including anonymous complaints. Various service providers now offer issuers solutions in this area, including procedures to submit complaints through hotlines and e-mail addresses maintained by the service providers. But none of the Sarbanes-Oxley Act, the rules or the extensive commentary about establishing complaint procedures addresses what the audit committee is required to do with a complaint when one is received. This article briefly discusses some considerations in dealing with such a complaint.
Liability of U.S. Companies for Alleged Bribery By Foreign Subsidiaries
The Foreign Corrupt Practices Act (FCPA) provides two avenues by which a U.S. concern can be prosecuted for improper payments to foreign officials: the anti-bribery provisions, and the books-and-records and internal-control provisions. Somewhat unclear, however, is the kind of involvement in a foreign subsidiary a U.S. parent must have such that it might be exposed to criminal or civil enforcement. This article explores liability for misconduct of foreign subsidiaries and what preventive measures a parent can take.
Drug and Medical Device Manufacturers
Following a guilty plea last year by a major pharmaceutical company, Associate Attorney General Robert McCallum declared that "[t]he Department of Justice is committed to rooting out and prosecuting health care fraud. It is of paramount importance that the Department use every legal tool at its disposal to assure the health and safety of the consumers of America's health care system." The tools -- the variety of different criminal statutes and theories used to prosecute drug and device manufacturers -- are so diverse as to defy easy summary.
The Unchanged Agenda
The call for improved corporate ethics has been thoroughly embraced by the worlds of business and public policy -- so much so that the recent invalidation of the federal sentencing guidelines, which allowed corporations to mitigate their sentences, will not slow the campaign's momentum. Rather, the guidelines' new advisory status should focus companies more on the overriding need to build an ethical culture, and less on rote, process-oriented compliance. This change in focus will underscore the guidelines' core strength: They are more than just legal procedure -- they articulate best practices in business ethics, which companies can put to constructive use.
Supreme Court Overturns Arthur Andersen Conviction
The ruling was swift and unanimous. On May 31, 2005, the Supreme Court reversed the conviction of the late accounting firm, Arthur Andersen LLP (Andersen), under the federal witness tampering statute, 18 U.S.C. ' 1512(b)(2), in a key case arising from one of the most significant corporate scandals in American history. <i>Arthur Andersen LLP v. United States</i>, 544 U.S. -- (2005) (full text of the opinion can be downloaded at www.supremecourtus. gov/opinions/04pdf/04-368.pdf). The result was unsurprising given the antagonistic questions the Justices posed to the government at oral argument. The Court overturned Andersen's conviction on the narrow grounds that the jury instructions failed to convey properly the elements of a crime under ' 1512(b)(2), and remanded for a possible new trial. The decision clarified the limits of ' 1512(b)(2) while leaving at least one important question unresolved. Perhaps more importantly, it may force a more narrow reading of the Sarbanes-Oxley Act with respect to document retention.
In The Courts
Recent rulings of importance to you and your practice.
