How to Make the SEC Disgorge Exculpatory Evidence
In the post-Enron world, the SEC is ratcheting-up the stakes in many of its cases. With millions of dollars in increased funding and hundreds of additional staff, it is bringing more cases, seeking harsher penalties, and generally litigating more aggressively. If recent press releases are indicative, it is also increasingly coordinating its civil enforcement activities with criminal investigations by the Department of Justice. As one SEC district administrator stated in a recent newspaper interview: "People are looking for heads. And we're going after them."
No More 'Free Pass' for Foreign Citizens
When a US company settles a criminal antitrust case by pleading guilty, the Justice Department (DOJ) now usually requires that at least one executive receive a prison sentence. But what about foreign companies? In the past, DOJ often prosecuted foreign companies, but not foreign executives. Prosecution of foreign executives raised questions of diplomacy, since the United States until recently was the only nation that made antitrust violations a crime. Then there was the practical problem of how to arrest a foreign citizen overseas. Besides, the Bureau of Prisons (BOP) policy was to deport non-violent, non-US citizens instead of housing them at US taxpayers' expense, and the Immigration and Naturalization Service (INS) barred foreign felons from the country.
The War on Judicial Sentencing Discretion
The face of federal sentencing law, policy and practice has changed dramatically over the past year ' not just for individual criminal defendants, but for corporations as well. Sentencing laws that were stiff before have now become even more onerous, and the opportunities for leniency under the new regime are scarce. This article discusses the legislative and policy changes that specifically impact sentencing for corporations.
In the Courts
Important rulings of interest to you and your practice.
Tougher Penalties, More Prosecutions
Although the McCain-Feingold Campaign Reform Act took effect almost 18 months ago, little attention has been paid to changes it made in the enforcement of federal campaign finance law, including big penalties for violations and sentencing guidelines that mandate incarceration for most criminal convictions. Notably, the Act ' Campaign P.L. 107-155, officially called the Bipartisan Campaign Reform Act of 2002 (BCRA) ' has increased the risk of criminal prosecution as well as the penalties.
Can You? Should You? Must You?
As general counsel of a small public company, you discover that, for 2 years, a department head approved sending false invoices to customers, resulting in profits of at least $2 million. Although it stopped a year ago and is well concealed, the practice was intentional, and a half-dozen current employees were involved. You fear that the false invoices constitute at least mail and wire fraud. Moreover, if the victims find out, they might sue. What do you do?
