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For all the complexities inherent to securities enforcement litigation, the law of available remedies has been comparatively simple. There are monetary penalties, there are officer-and-director (or other) bars, and there is “disgorgement.” And while penalties are frequently pursued by the Securities and Exchange Commission’s enforcement Staff, and imposed by judges, based on an opaque hash of factors ranging from the seriousness of the offense to the defendant’s personal character and circumstances, demands for the disgorgement of ill-gotten gains traditionally have been straightforward in both theory and application. Because disgorgement ostensibly is not intended to be punitive, and its principal purpose is to prevent culpable defendants from retaining the financial benefits of their transgressions, disgorgement-related fights between the SEC and litigants historically have centered on fixing, and then forfeiting, the amounts actually received by defendants through their own wrongdoing. [...]
The Supreme Court’s February 25 decision in Kaley v. United States creates a significant hurdle for white-collar defendants seeking to retain qualified counsel to defend against the government’s allegations. Ruling that defendants cannot, prior to trial, challenge a grand jury’s probable cause determination that allows the government to bar a defendant’s access to assets linked to the alleged crime, the Court’s decision, according to the dissent, allows the government “to initiate a prosecution and then, at its option, disarm its presumptively innocent opponent by depriving him of his counsel of choice – without even an opportunity to be heard.” In cases such as Kaley, where the government convinced the grand jury to charge on a novel or untested theory, the result poses a particularly difficult challenge for a white-collar defendant. [...]
On Friday, February 28, 2014, Morvillo Abramowitz partner Jonathan Sack will appear at the American Conference Institute’s 3rd National Forum on Securities: Litigation & Enforcement to speak on the panel “The Ins and Outs of Defending a Claim Brought By the Government”. The panel will advise conference-goers on: Preparing for increased coordination amongst various agencies, Learning how to manage defending against different entities, Discovering litigation strategies and tactics to restore balance to the process, and Complying with Brady demands and approaches to employ during discovery. Mr. Sack will be joined by James Wareham, partner, DLA Piper (Washington, DC), Michael Martinez, partner, Mayer Brown, and Greg Bruch, partner, Bruch Hanna LLP (Washington, DC). The ACI’s 3rd National Forum on Securities: Litigation & Enforcement will be held February 27-28, 2014 at the Grand Hyatt Washington in Washington, DC. For more information, please click here.
SEC Enforcement Data Analyses: Volume 2 - 02.26.2014
The latest edition of Morvillo Abramowitz's quarterly report on the work of the SEC's Division of Enforcement provides an in-depth look at the cases filed nationwide during the 2013 calendar year. Analyzing publicly available information, both on a case-by-case basis and on a macro level, our database is an invaluable tool for practitioners to find relevant precedents in SEC enforcement actions.
AFDA's White Collar Roundtable - 02.21.2014
On Friday, February 21, 2014 Morvillo Abramowitz partner Richard Albert took part in a webinar hosted by the Association of Federal Defense Attorneys. The webinar, a monthly white collar roundtable, featured an hour-long panel discussion covering key developments in a variety of white collar areas. Topics addressed included new DOJ policies and enforcement trends; legislative developments; recent case opinions of note; and noteworthy prosecutions, trials and sentencing hearings. For more information, please visit www.afda.org.
Benjamin Fischer Quoted In Bloomberg News - 02.20.2014
On February 20, 2014, Morvillo Abramowitz partner Benjamin Fischer was quoted in Bloomberg News regarding a recent decision in hedge fund founder Doug Whitman's appellate case. Ben discusses the government's reliance on the conscious avoidance theory to prosecute insider trading and implications for professionals. The article also cites his recent blog post, "Insider Trading And Conscious Avoidance: Handling The Government's Most Powerful Prosecutorial Tool." To read the full article, please click here.
SLUSA's Broad Definition Of 'Covered Class Action' - 02.18.2014
A new chapter is now being written in the ongoing battle between defendants seeking dismissal of securities class actions under the Securities Litigation Uniform Standards Act (SLUSA) and plaintiffs attempting to avoid SLUSA. The latest front in this battle concerns the question of what constitutes a "covered class action" under SLUSA. This article discusses three recent cases in the Southern District of New York that were found to fall within the broad definition of a "covered class action," not withstanding the fact that each was commenced as an individual action.
In recent years the federal government has aggressively investigated and prosecuted pharmaceutical companies and health care providers for possible violations of anti-fraud, anti-kickback and other laws. These efforts have resulted in massive fines and financial penalties. [...]
Morvillo Abramowitz partner Robert Radick will speak at the American Bar Association Section of Antitrust Law’s webcast, entitled: “RICO in Health Care Industries: Understanding the Emerging Civil and Criminal Trends.” This webcast is scheduled for Thursday, February 6, 2014 from 12:00pm-1:00pm. The panel will discuss a range of highly topical issues, including the increasing use of RICO as a law enforcement tool in health care fraud prosecutions. For more information, please click here.
The ins-and-outs of extradition law increasingly are relevant as global commerce and international travel emerge as the norm, exposing citizens of one nation to the laws of other nations. I previously have written on the process by which the United States typically seeks the return of fugitives to this country to stand trial. Last week’s decision by an appellate court in Florence, Italy convicting American citizen Amanda Knox and her former boyfriend of the stabbing death of Knox’s roommate in 2007 raises questions regarding the flip side of the coin – how the United States government responds when another country seeks extradition of one of its citizens. [...]
A criminal defendant's decision whether or not to take the stand at trial is one of the most pivotal. Declining to testify, particularly in insider trading cases, can be risky, but testifying can permit attack by otherwise inadmissible "prior bad act" evidence. This article discusses the Martoma prosecution, which illustrates how the government can seek to attack a defendant with "prior bad acts" even if he does not take the stand.
Elkan Abramowitz Interviewed on the Today Show - 02.04.2014
The second part of this Business Crimes Bulletin article examines the issues surrounding criminal forfeiture laws. The first article discusses the criminal forfeiture statute. The publication of part two coincides with the Supreme Court's ruling on February 25 in Kaley v. United States, which limits the ability of defendants to challenge a court's decision to freeze their assets before trial. The outcome of this closely watched case provides the government with another tool in its arsenal. An analysis of Kaley and its potential impact on white-collar cases and on the ability of defendants to hire counsel of their choice, is discusses in part two.
For the second consecutive year, Morvillo Abramowitz Grand Iason & Anello PC, a leading New York litigation boutique, was awarded Benchmark Litigation's Northeast White Collar Crime Firm of the Year Award, recognizing the Firm’s prominence in white collar criminal defense, securities enforcement, and government investigations at a ceremony held on January 29, 2014 at the Essex House.
Benchmark Litigation, published by Euromoney Legal Media Group, is the only publication on the market to focus exclusively on litigation in the US. The guide’s results are the culmination of a six-month research period that allows researchers to conduct extensive interview with litigators and their clients. This is the second nationwide awards event that the publication has hosted. The awards follow similar successful events held by Benchmark’s sibling publications International Financial Law Review, International Tax Review, and Managing Intellectual Property.
Criminal Forfeiture Laws: Tying a Defendant’s Hands - January 2014
The increasingly aggressive use of criminal forfeiture has become a vital weapon in the federal prosecution of white-collar cases. Sometimes, however, the government's zealous pursuit of the supposed fruits of allegedly illegal conduct may run afoul of a defendant's constitutionally-protected right to counsel. That is the subject of part one of this Business Crimes Bulletin article, published in two parts.