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The Department of Justice has brought few high-profile criminal cases against individuals arising from the 2008-2009 financial crisis. The department’s cases have tended to charge large financial institutions, not senior officials. A number of the high-profile cases arising from the collapse of mortgage-backed securities have resulted in civil, not criminal, charges and settlements. And the typical sanction has been the payment of substantial (often multi-billion dollar) sums to the government, not imprisonment.
The Justice Department’s white-collar agenda in 2014 was marked by skyrocketing corporate settlements and continued reliance on deferred and non-prosecution agreements, coupled with compliance monitors. Several significant decisions with long-term implications for white-collar cases also were issued by federal courts in 2014. A look at the Justice Department’s approach and these decisions offer a clue as to what to expect in white-collar cases in 2015. [...]
In the last several months, judges of the U.S. District Court for the Southern District of New York have issued a number of rulings on discovery disputes that offer both pragmatic resolution of the dispute at hand and broader, instructive commentary on the scope of permissible discovery. These rulings make clear that Southern District judges are increasingly losing patience with discovery for discovery’s sake. This article discusses several of those opinions.
On December 18, 2014, Morvillo Abramowitz partner Robert J. Anello was quoted in an MSNBC article, “As U.S.-Cuba Tension Thaws, the Fate of a Fugitive is in Question,” which discusses the question of whether or not Assata Shakur, formerly JoAnne Chesimard and the step-aunt of deceased rapper Tupac Shakur, will be extradited back to the U.S. to carry out the remainder of her life sentence. Mr. Anello stated, “It certainly will be easier than when we weren’t talking to Cuba, although it may not be the first order of priority.” He also said, “You will see both countries trying to do things to foster better relations.”
The Barko v. KBR Privilege Battle Continues - 12.17.2014
A high-profile qui tam suit against Kellogg, Brown & Root and Halliburton continues to generate important case law relating to the scope of attorney-client privilege and work product protection given to internal investigations.
In the lawsuit, arising out of alleged false claims to the government under Iraq reconstruction-related contracts, federal judge James S. Gwin in Washington, D.C. held, in March 2014, that internal investigation materials were not protected by the attorney-client privilege because the investigation had been conducted as a matter of regular company policy by internal compliance personnel and as required by federal law. (I wrote about Judge Gwin’s ruling in a blog entitled “When Is An Internal Investigation Not Privileged.”) The defendants appealed the ruling, which led to a unanimous decision three months later in In Re: Kellogg Brown & Root, Inc., No. 14-5055 (D.C. Cir. June 27, 2014), in which the U.S. Court of Appeals for the D.C. Circuit vacated the district court decision, holding that an internal investigation is privileged so long as “one of the significant purposes” of the investigation is to obtain or provide legal advice. The Court of Appeals remanded the case to the District Court for further proceedings. (I discussed the D.C. Circuit’s opinion in “D.C. Circuit Upholds Claim of Corporate Attorney-Client Privilege.”) That ruling is now subject to a petition for certiorari to the Supreme Court. [...]
Law Journal Press recently published new book covers for the treatise White Collar Crime: Business and Regulatory Offenses, to recognize the contribution of partner Robert J. Anello, who became an editor of the treatise in 2012. The treatise has been described as “a fundamental and essential addition to every practitioners bookshelf.”
White-collar criminal practitioners spend much of their time arguing about how prosecutors should exercise their discretion in making charging decisions, often against the backdrop of broad and uncertain criminal statutes. When the Supreme Court grapples with the same issue, however, significant new criminal law doctrine may emerge. That potential became apparent most recently during the oral argument of Yates v. United States, the peculiar case of a fisherman prosecuted for obstruction of justice under the Sarbanes-Oxley Act for throwing undersized fish back into the sea. In this article, we discuss this case, the critical comments the justices directed toward the government regarding its exercise of prosecutorial discretion, and potential judicial remedies.
The government must be very sensitive about all the criticism it has been getting, from Congress, some judges and others, for not prosecuting more individuals for financial crimes. Perhaps in response, senior government officials have given a series of speeches since September declaring the commitment of the Justice Department to such prosecutions.
White-collar defense lawyers know that individuals are investigated and prosecuted all the time, so in some ways the recent speeches don’t tell us very much. But the speeches introduce a few ideas that raise concern that, perhaps, the government’s sensitivity is generating some questionable proposals. [...]
On November 28, 2014, partner and Federal Bar Council President Robert J. Anello presented U.S. Senator Richard Blumenthal, D-Conn., with the Emory Buckner Medal in recognition of his outstanding public service at the Federal Bar Council’s annual Thanksgiving Luncheon at the Waldorf Astoria.
Learned Hand famously opined that “[a]ny one may so arrange his affairs that his taxes shall be as low as possible.” There is, however, a line between legitimate tax avoidance and illegal tax evasion and, in drawing that line, the IRS has long challenged attempts by taxpayers to reduce their tax liability by executing transactions that lack economic substance. In this article, I discuss the increasing focus of the economic substance doctrine on the proportionality between the potential profits to be derived from a transaction and the corresponding tax benefits, as well as the effect this changing focus will have on future cases.
On November 13, 2014, partner Jeremy H. Temkin received AJC Westchester’s Judge Learned Hand Award, the highest honor that AJC presents to outstanding leaders in the legal profession. AJC established the Learned Hand Award to cite leaders in the legal profession for excellence and for their contributions to the legal community.
For more than a century, AJC has been the leading global Jewish advocacy organization. AJC works to enhance the well-being of the Jewish people and to advance human rights and democratic values for all.
Social media websites allow anyone — or more accurately everyone — to communicate and share ideas and opinions with a wide-ranging audience. Websites like Facebook, Twitter, YouTube and LinkedIn provide an extraordinary means for professional and personal networking and self-promotion, and for researching personal and professional contacts. In previous blog posts, I addressed ethical perils for lawyers who access social media websites to research potential jurors and for lawyers who advise clients concerning the propriety of removing potentially incriminating and discoverable material from social media websites. This post addresses yet another category of ethical pitfalls for lawyers who use social media: The risk of violating the ethical rules that govern attorney advertising by using social media for professional self-promotion. [...]
On November 5, 2014, partner and Federal Bar Council President Robert J. Anello gave testimony before the Advisory Committee on Criminal Rules. In his capacity as Federal Bar Council President, Bob commended the Advisory Committee on Criminal Rules for its work developing the amendment to Federal Rule of Criminal Procedure 41. Further, he noted that the Federal Bar Council supports the proposed amendment to Rule 41 and recommends that the Advisory Committee submit the proposed amendment to the Committee on Rules of Practice and Procedure.
One of the axioms of white-collar practice today is that companies, especially public companies, do not litigate against criminal and civil enforcement authorities, except in rare circumstances. In this article, we discuss two trends that may make the already constrained position of companies even more difficult in terms of increased exposure to liability and reduced opportunities to mitigate the terms of settlement.