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Business Crimes Bulletin
Carrots and Sticks: DAG Lisa Monaco Puts Her Stamp on DOJ’S Corporate Criminal Enforcement Policies
Harry Sandick and Hilarie Meyers
Going back many decades, each Deputy Attorney General (DAG) has promulgated revisions to the DOJ’s corporate criminal enforcement policies, leaving behind eponymous policy memos that were carefully studied by defense attorneys. Like her predecessors, Deputy Attorney General Lisa Monaco has been quick to announce a series of revisions to DOJ’s corporate criminal enforcement policies and practices.
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Business Crimes Bulletin
The Great Pandemic Heist: PPP Loan Fraud
Edward T. Kang
In the COVID-19 era, there has been a heist of great value, but it has not gone undetected. Prosecutors have called the heist the largest fraud in U.S. history, with the thieves stealing hundreds of billions of dollars in taxpayer money through fraudulently obtained Paycheck Protection Program (PPP) loans.
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Business Crimes Bulletin
White Collar Crime and Professional Liability Policies
Andrew N. Bourne
Professional liability insurance policies may provide coverage for criminal proceedings, including defense costs incurred defending against criminal indictments. Corporate policyholders, and individuals covered under professional liability policies, should know exactly what type of claims are insured.
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Business Crimes Bulletin
New Fraud Section Chief Talks Corporate Compliance
Andrew Goudsward
After nearly nine years in the private sector, Glenn Leon returned to the U.S. Department of Justice to take over a section that has grown both in staff and in stature as it pursues some of the government’s biggest white-collar cases.
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Business Crimes Bulletin
Pitfalls of the Attorney-Client Privilege
Jonathan S. Feld and Lisa M. Burnett
The attorney-client privilege is a critical component in the legal process but its protection is constantly being challenged in complicated corporate investigations. There are measures that attorneys should, where possible, take steps to mitigate the risk of losing the privilege.
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Business Crimes Bulletin
The Selective Prosecution Defense
Evan T. Barr
This article explores the law on selective prosecution and why, despite the long odds against success, it may still make sense from a defense perspective to assert the claim.
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Business Crimes Bulletin
FTC Looks to Focus On Data Privacy and Competition
Isha Marathe
The Federal Trade Commission, under its current chairperson Lina Khan, has released a flurry of press releases and blogs in recent months signaling at a focused commercial surveillance “crackdown.”
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Business Crimes Bulletin
Former SEC Lawyers Dominate Payouts Under Agency’s Whistleblower Program, Study Finds
Andrew Goudsward
The U.S. Securities and Exchange Commission’s widely hailed whistleblower program has paid millions in recent years to former SEC lawyers who have come to dominate the market for representing tipsters seeking payouts through the program, a new study found.
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Business Crimes Bulletin
Upcoming Webinar
Join Board of Editors member Jacqueline Wolff and David Smith of Manatt, Phelps & Phillips on Oct. 13 as they delve into the new SEC disclosure rules on climate change risks.
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Business Crimes Bulletin
The Regulators Are at the Gates: Significant New AML Legislation Nears Passage
Patrick T. Campbell, Jonathan B. New and Francesca A. Rogo
Over the past few years, Congress and law enforcement have notably increased their scrutiny of companies’ anti-money laundering compliance, and it appears that Congress is not yet finished with its drive for additional legislation and regulation.
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Business Crimes Bulletin
SCOTUS to Hear Cases on Limits of Mail and Wire Fraud Statutes
Robert J. Anello and Richard F. Albert
Federal courts long have struggled to define the limits of the mail and wire fraud statutes, laws famously characterized as the prosecutor’s true love for their vast breadth and catch-all adaptability. After sidestepping opportunities in the past, the U.S. Supreme Court is now wading into two different and controversial manifestations of that flexibility.
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Business Crimes Bulletin
Second Circuit Ruling Offers Ways to Mitigate FCPA Risk Through Corporate Structure
Andrey Spektor
Despite the FCPA’s breadth and its aggressive enforcement, it has largely escaped judicial scrutiny. Individuals and companies are reluctant to test the bounds of the law and risk federal prison or crippling penalties. But one man has refused to fall in line and has almost single-handedly shaped recent FCPA jurisprudence.
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Business Crimes Bulletin
New Securities Suits Up Slightly, Despite Stock Drops
Ross Todd
Given the recent stock market carnage, one might expect that the courts were flooded with a fresh batch of securities suits. Stock drops, after all, are one necessary ingredient of stock drop suits. But according to Cornerstone Research’s mid-year assessment of new filings, the number of new class action securities cases filed in the first half ticked up only slightly compared to the first half of 2021.
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Business Crimes Bulletin
Using Artificial Intelligence In White-Collar Matters
Robert G. Heim
AI currently is playing a growing role in helping white-collar lawyers and their clients analyze vast amounts of data to uncover insights, connections, and patterns that would be impossible to detect through manual reviews. This article provides an introduction to AI technology and discusses the key regulatory developments practitioners should be aware of as they advise their clients on AI.
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Business Crimes Bulletin
Waiver of Corporate Privilege By An Individual Defendant
Benjamin Rosenberg
Individual employees often act pursuant to advice from their in-house counsel. If named as a defendant in which her action is challenged, the employee may want to assert advice of corporate counsel as a defense. But the privilege belongs to the employer, not the employee, and the employer may refuse to waive the privilege. Can the court abrogate the employer’s privilege over the objection of the employer, and if so under what circumstances?
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Business Crimes Bulletin
White-Collar Enforcement Under the Biden Administration
Nate Robson
After much saber-rattling, the Biden administration’s focus on white-collar corporate compliance is finally coming into focus. Law firms and white-collar compliance experts have long warned the administration’s ramped-up focus was coming, but the pandemic largely nixed any initiatives. A spate of recent settlements coupled with the addition of a new white-collar leader at the U.S. Department of Justice is giving the public a look into what compliance will look like under Biden.
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Business Crimes Bulletin
Efforts to Provide Out-of-State Abortion Travel Benefits Face Rapidly Shifting Legal Landscape
Jessica Mach
Employment attorneys say the breadth of new state laws — and the pace at which they are going into effect — means in-house counsel at companies trying to create workarounds for employees in states with restrictive abortion laws by providing benefits that would allow them to travel out-of-state to access abortion services will need to be on high alert, since keeping up on top of the laws will be key to limiting their exposure to litigation — or even criminal penalties.
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Business Crimes Bulletin
DOJ NFT Insider Trading Indictment Skirts Securities Question, But Litigates Like It Is
Isha Marathe
The question of whether an NFT is a security has come up several times, and United States of America v. Chastain in the Southern District of New York brings the dispute back to the forefront.
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Business Crimes Bulletin
Questions Surround Expanded Government Authority to Seize Russian Assets
Robert J. Anello and Richard F. Albert
The purpose behind the Biden Administration's proposals to seize assets of Russian oligarchs is to punish a specific action by a state actor — Russia’s invasion of Ukraine. The proposals, however, do not appear to be limited to this conduct alone and would outlast Russia’s invasion. In times of war, it at least arguably may be appropriate to pass laws to expand the executive’s authority to address specific hostile conduct. Such laws, however, should end with the conflict.
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Business Crimes Bulletin
The FRCP Rule 9(b) Standard In False Claims Act Cases
Michael A. Sirignano
In recent years, federal circuit courts of appeals have set forth somewhat different standards that civil FCA complaints brought by private citizens, known as relators, must meet to satisfy Rule 9(b) — especially regarding whether representative examples of allegedly fraudulent claims must be included in a complaint.
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Business Crimes Bulletin
Companies Need to Focus On Compliance to Protect Against Aggressive Post COVID-19 White-Collar Prosecution
G. Zachary Terwilliger
Consider another paradox of the post-COVID world: The pandemic that initially disrupted federal prosecution of corporations has now heightened potential exposure in a number of areas. This is especially the case for those organizations that took advantage of government aid or today struggle to navigate snarled global supply chains.
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Business Crimes Bulletin
Climate Change Risk and Disclosure: A New Focus for SEC Enforcement
Jacqueline C. Wolff
Given the massive amount of dollars being poured into ESG funds and the SEC’s renewed focus on both the funds and the companies in the funds, there is no time like the present for companies to engage in an assessment of their climate risks and how these risks and the status of the companies’ ESG goals are being relayed to investors.
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Business Crimes Bulletin
Government Looking Into Insider Trading By Tipping Block Trades
Michael Miller and Daniel Podair
How the government might frame insider trading cases based on allegations of tipping before the execution of block trades in securities.
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Business Crimes Bulletin
Individual Liability and Criminalizing Cybersecurity Response
Jonathan S. Sack and Christopher M. Hurley
To date, cybersecurity has generally been viewed as an organizational responsibility, and data breaches similarly have been treated as organizational weaknesses or failures. Against this backdrop of organizational responsibility, the Department of Justice has brought a noteworthy criminal case against an individual for his personal response to a corporate data breach.
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Business Crimes Bulletin
Repairing the Foreign Agents Registration Act
Harry Sandick and George Carotenuto
In recent years, mostly due to the well-publicized prosecution of Trump campaign manager Paul Manafort, FARA has become more of a focus for federal prosecutors. As a result, white-collar attorneys have been consulted more often about whether particular conduct requires registration under the Act.
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Business Crimes Bulletin
SCOTUS Hears Arguments In Doctors’ Good Faith Defense to Prescribing Controlled Substances
By Robert J. Anello and Richard F. Albert
When is a doctor a doctor and when is a doctor a drug dealer? In early March, the U.S. Supreme Court heard oral argument in two consolidated cases — Ruan v. United States and Kahn v. United States — to address where that line is drawn.
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Business Crimes Bulletin
Strategies for Advising Foreign Clients As DOJ Pursues Extraterritorial Criminal Cases
Emil Bove
This article addresses some issues to consider, including foreign arrest procedures, contesting extradition, and engaging with prosecutors before a defendant arrives in the United States.
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Business Crimes Bulletin
Crypto Executive Order ‘Both a Landmark and a Question Mark’
Andrew Goudsward
The Biden administration released its long awaited executive order on cryptocurrency, directing a range of federal agencies to study and assess a litany of issues related to digital assets, including cybersecurity, money laundering and climate impact.
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Business Crimes Bulletin
The FTC Gets Into the College Athlete NIL Game
Nicole Demas, L. Andrew Tseng and Sean P. McConnell
As national champions are crowned in men’s and women’s basketball, hundreds of thousands of college athletes are entering the influencer marketplace for the first time and now find themselves attractive candidates in the fast growing influencer marketing arena. With influencer marketing potentially providing a 5x return on investment, many brands are eager to get into the industry, but it doesn’t come without risks as the FTC Commissioner is taking a closer look at the use of influencers for marketing.
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Business Crimes Bulletin
First Dark Web Insider Trading Case Shows Government Active In Policing Tech
Ian McGinley
In a first of its kind prosecution, the Southern District of New York brought an insider trading case against defendant for selling inside information on the Dark Web. The SEC also brought a civil regulatory action against the defendant for the same conduct. In a rare move, however, SDNY and SEC charged this same conduct under different insider trading statutes. This difference underscores the legal complexities involved when the origin of inside information in the digital world is unknown.
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Business Crimes Bulletin
Second Circuit ‘Connolly’ Ruling Shows Limits of Mail and Wire Fraud Statutes
Elkan Abramowitz and Jonathan Sack
The Connolly decision draws attention to the limits of the mail/wire fraud statutes — laws that are quite expansive but can also be stretched too far when applied to conduct in financial markets, especially markets tied to opaque rules and practices.
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Business Crimes Bulletin
Inside Cryptocurrency Pump-and-Dump Schemes
Jonathan Bick
Cryptocurrency pump-and-dump schemes (CPDs) are becoming increasingly prevalent. As in the case of traditional “pump and dump” schemes, CPDs lead to short-term trading perturbations — exaggerated increases and/or decreases in prices, volume, or volatility.
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Business Crimes Bulletin
The DOJ Goes Phishing: The Rise of False Claims Act Cybersecurity Litigation
Annie Railton, James Gatta, Jud Welle and Emily Notini
While the DOJ Civil Cyber-Fraud Initiative is still in its early stages and cybersecurity regulations are evolving, whistleblower plaintiffs have already begun leveraging the FCA to pursue alleged noncompliance with government cybersecurity requirements.
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Business Crimes Bulletin
Examining the SEC’s Rulemaking Process
Jonathan S. Sack and Penina Moisa
SEC Chair Gary Gensler's agenda raises important questions of both substance and process, including the technical, but very important, matter of SEC rulemaking: What is required for the Commission to create new rules, or change well-established rules? The answers to these questions, in turn, may determine what can realistically be accomplished given timing and political constraints.
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Business Crimes Bulletin
DOJ 2021 Fraud Section Report Shows COVID Effect Dissipating
Kevin Muhlendorf
Although billed as an annual look-back, the U.S. Department of Justice Criminal Division’s Fraud Section annual report provides important insight for individuals, entities, and their lawyers as to where the Fraud Section is setting its sights for 2022 and beyond.
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Business Crimes Bulletin
Mail and Wire Fraud Post 'Kelly v. United States'
Elkan Abramowitz and Jonathan S. Sack
This article discusses the holding by the U.S. Supreme Court Kelly v. U.S. and explains its impact on subsequent cases and concludes with a discussion of the “right to control” theory of mail and wire fraud, which has been challenged in light of the Kelly decision.
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Business Crimes Bulletin
Anti-Bullying and Corporate Responsibility
Michael W. Peregrine
As boards implement anti-bullying policies to protect against a toxic management-to-employee workplace environment, they should also consider extending similar protection to the vital interactions between the general counsel and the CEO.
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Business Crimes Bulletin
Insurance Fraud Remains Key Area of Government Focus
Michael A. Sirignano
During the past year, there were important government reports examining the defrauding of health insurance programs, new trends and government initiatives relating to fraud, and insurance fraud cases involving significant numbers of defendants. When added together, it is not difficult to understand why insurance fraud remains such a key area of focus for government officials, carriers and attorneys.
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Business Crimes Bulletin
Fourth Circuit: Shareholders Face High Bar In Demonstrating Scienter
Michael W. Mitchell and Edward Roche
A recent Fourth Circuit decision held that shareholders must meet a high bar in demonstrating scienter to avoid early dismissal of the case. The decision also shows the fact-intensive approach courts use to distinguish fraudulent statements from those that, even if mistaken, were made innocently.
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Business Crimes Bulletin
Biden Administration Corporate Enforcement Policies More Symbolism than Effective Reform
Robert J. Anello and Richard F. Albert
By undoing some of the higher profile policy changes of the prior administration that many perceived as business-friendly, the current administration has served notice on the business and financial community of a return to practices characteristic of a more aggressive enforcement regime.
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Business Crimes Bulletin
With ‘Great Resignation’, Corporations Need to Prepare for the Great Investigation
Veeral Gosalia
Major crisis events, such as political uprisings or financial downturns, are typically followed by an increase in fraud in the business sector and heightened risk to corporate IP and other sensitive information. Anecdotally, this seems to be proving out again in the recent and ongoing fallout from the pandemic. Even before this Great Resignation movement, corporations across the globe were reporting increases in suspicious activity, data leakage, IP theft and other data risks stemming from departing employees and remote workers.
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Business Crimes Bulletin
Potential Criminal and Civil Penalties of Digital Asset Exchanges
Nola B. Heller and Samson Enzer
This article discusses the potential criminal and civil penalties that companies can face if their employees engage in insider trading in digital assets, and suggests several measures that exchanges can take to reduce their exposure from such risks.
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Business Crimes Bulletin
Feds Jumping Into Corporate Privacy and Cybersecurity Enforcement
David Saunders and Julian L. André
The past 12 months have seen a steady drumbeat of action by federal law enforcement and regulatory agencies of which in-house counsel should take note. Whether new guidance, regulation, investigations, or enforcement activity, the message is clear: The federal government is paying close attention to how companies are handling and protecting their data — especially consumer and sensitive data.
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Business Crimes Bulletin
Can A Private Citizen Perform An Official Act?
Harry Sandick and George Fleming
This article discusses the importance of the “official act” requirement established in McDonnell v. United States, and how its logic should lead to a parallel requirement that private citizens should not be chargeable with the commission of official acts as part of a scheme to deprive the public of honest services.
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Business Crimes Bulletin
Being Selective: How Companies May Best Protect Privilege When Cooperating With a Government Investigation
Jonathan B. New, Patrick T. Campbell and Francesca Rogo
This article explores a key consideration for companies under government investigation: whether voluntary disclosure of privileged information in an effort to obtain cooperation credit waives the privilege vis-à-vis third parties in subsequent litigation.
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Business Crimes Bulletin
Implications of Second Circuit Ruling on Fugitive Disentitlement
Elkan Abramowitz and Jonathan S. Sack
Historically, the “fugitive disentitlement” doctrine has foreclosed challenges to criminal charges by a defendant who does not physically submit to a U.S. court’s jurisdiction. As a consequence, to make even threshold challenges to an indictment, a defendant who lives abroad must leave home, waive the right to oppose extradition, and risk pre-trial detention in the United States.
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Business Crimes Bulletin
Disclosure of Investigations: Whether and When for Public Companies
Jacqueline C. Wolff and Karin M. Bell
You should be thinking about disclosure long before you even hear from a whistleblower, specifically, in terms of setting up policies and procedures governing how to handle the information flow from the investigative side of the house to the disclosure side.
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Business Crimes Bulletin
Smoke & Mirrors: The New York Cannabis Law’s Illusory Lease Mandate
Marjorie J. Peerce, Michael P. Robotti and Kamera Boyd
New York’s recently enacted cannabis law, the Marijuana Regulation and Taxation of 2021 (MRTA), created a maze of new legal requirements. These provisions affect not only cannabis companies, but also the companies that conduct business with them.
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Business Crimes Bulletin
As Federal Antitrust Prosecutions Rise, Potential Criminal Pitfalls Loom for HR Professionals
Laily Sheybani
The Biden administration seeks to position itself as one that will crack down on employers’ attempts to limit their employees’ mobility and pay through allegedly non-competitive measures.
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Business Crimes Bulletin
Why Are Courts Making Cybersecurity Forensics Reports Not Privileged?
David P. Saunders
Internal corporate investigations can be, and frequently are, privileged. However, it is difficult to square that concept with the recent spate of federal court opinions that have concluded that cybersecurity forensic reports generally are not privileged.
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