Publications

08.03.15 | Articles

LAW vs. LORE: The Lack of Judicial Precedent in FCPA Cases

Business Crimes Bulletin

When delivering legal advice, lawyers attempt to provide informed guidance based on controlling law. Yet, when it comes to significant chunks of the white collar criminal and regulatory landscape, practitioners often are forced to provide advice based on professional “lore” derived from negotiated settlements rather than enacted laws or judicially established caselaw. In this two-part article, we discuss the lore that counsel must rely upon when tackling FCPA enforcement actions, as well as the downside of such reliance.

Related Lawyers: Robert J. Anello, Kostya Lantsman

07.27.15 | Blog Posts

Interpol: How to Catch a Thief – International Style

The Insider: White Collar Defense and Securities Enforcement

In my last blog post, I discussed the federal government’s increased focus on criminal activity that occurs overseas and the recent high-profile indictment filed by the Justice Department against nine FIFA officials. On June 3, 2015, INTERPOL, the world’s largest international police organization, issued Red Notices for six of the FIFA defendants. Red Notices issued by INTERPOL are the closest thing to an international arrest warrant. The FIFA cases present an opportunity to examine the work of INTERPOL and the significance of the notices it issues. [...]

Related Lawyers: Robert J. Anello

07.16.15 | Articles

Offshore Accounts: The Beat Goes On

New York Law Journal

In its seventh year and fourth iteration, the Offshore Voluntary Disclosure Program (“OVDP”) remains the best opportunity for taxpayers who intentionally evaded their tax and reporting obligations to bring themselves into compliance and avoid criminal prosecution. However, not every current or former offshore accountholder who failed to comply with those obligations acted with a culpable state of mind, and the IRS has come to recognize the inequity of treating taxpayers who made good faith mistakes as harshly as those who acted willfully. In this article, I discuss the various options available to taxpayers with previously undisclosed offshore accounts.

Related Lawyers: Jeremy H. Temkin

07.13.15 | Articles

Prosecution of Conduct Abroad—Where Are the Limits?

New York Law Journal

As our economy has become more global, white-collar criminal investigations have increasingly focused on conduct that occurred beyond our borders. Such investigations raise threshold issues of extraterritorial application of federal laws and sufficient nexus to this country. In this article, we discuss these threshold issues and two recent cases that address them.

Related Lawyers: Elkan Abramowitz, Jonathan S. Sack

06.19.15 | Blog Posts

SEC, the Whistleblowers' "Advocate"

The Insider: White Collar Defense and Securities Enforcement

After the Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into law in 2010, speculation abounded as to whether the ambitious whistleblower bounty program would succeed and about how the Securities and Exchange Commission would support the program. But, in the four years since the bounty program became effective, the SEC has proved that it will do what it takes to make the program successful, including awarding payments totaling over $50 million to whistleblowers; appearing as amicus curiae in support of whistleblowers seeking protection under Dodd Frank’s anti-retaliation provisions; and pursuing companies that retaliate against whistleblowers or attempt to prevent whistleblowers from bringing tips to the SEC. In fact in a recent speech, SEC Chair Mary Jo White dubbed the SEC “the whistleblower’s advocate.” [...]

Related Lawyers: Catherine M. Foti

06.17.15 | Articles

Two Decisions Highlight the Perils of Witness Contact

New York Law Journal

In recent weeks, Southern District Judges J. Paul Oetken and Paul A. Engelmayer each issued decisions addressing different ethical dimensions of contact between attorneys and witnesses, in one case finding that the proposed contact was impermissible, and in the other finding that counsel’s lack of witness contact was problematic. In this article, we discuss these decisions, highlighting the complicated issues that counsel face interviewing witnesses in a litigation context.

Related Lawyers: Judith L. Mogul, Edward M. Spiro

06.08.15 | Blog Posts

FI-FA Fo Fum: Who Gets to Prosecute Non-Americans

The Insider: White Collar Defense and Securities Enforcement

America seemingly has found a new product to export – its criminal justice system. Many recent high profile criminal cases brought by the Justice Department, including a multi-billion dollar settlement with Swiss bank Credit Suisse for its banking practices in Switzerland and a number of other recent financial industry prosecutions and Foreign Corrupt Practices Act cases, have centered around activity that has occurred mainly overseas. The United States asserts its jurisdiction in these cases because the American banking system or its capital markets and exchanges were somehow involved. [...]

Related Lawyers: Robert J. Anello

06.03.15 | Articles

Convicted Corporations Aren’t Really Bad Boys

New York Law Journal

In this article, we discuss the recent guilty pleas by four major international banks—Citigroup, JPMorgan Chase, Barclays, and Royal Bank of Scotland—for the attempted manipulation of foreign exchange rates. Although the Department of Justice characterized the pleas as “historic resolutions,” in truth the government made significant efforts to blunt the effects of the criminal convictions by granting waivers to rules that would have restricted the banks’ ability to continue doing business in the United States—so-called “bad boy” provisions. We also discuss how these resolutions illustrate fundamental problems with the current framework for corporate criminal liability in the United States.

Related Lawyers: Robert J. Anello, Richard F. Albert

05.28.15 | Blog Posts

Deferred Prosecution Agreements - The Going Gets Tougher

The Insider: White Collar Defense and Securities Enforcement

Deferred Prosecution Agreements with the Department of Justice (DPAs) have been a powerful tool of federal white-collar criminal enforcement for a number of years. At the same time, DPAs have been attacked from many sides – judges, elected officials and commentators – for being too lenient on companies and too frequently used in lieu of prosecutions of individuals, as I have discussed in recent posts.

In a series of recent speeches Assistant Attorney General Leslie Caldwell has given a thoughtful defense of DPAs, explaining the basic merits of DPAs (and Non-Prosecution Agreements, or NPAs), while also responding to critics of such agreements. In speeches at the ACAMS Anti-Money Laundering & Financial Crime Conference in March and at NYU on April 14 and 17, AAG Caldwell described DPAs and NPAs as "useful enforcement tools" that allow the Justice Department to "accomplish as much as, and sometimes even more than, [it] could from a criminal conviction." She explained, "[w]e can require that the banks cooperate with our ongoing investigations, particularly in our investigations of individuals. We can require that such compliance programs and cooperation be implemented worldwide, rather than just in the United States. We can require periodic reporting to a court that oversees the agreements for its terms." [...]

Related Lawyers: Jonathan S. Sack

05.21.15 | Articles

The Government’s Use of Tax Returns at Trial

New York Law Journal

In cases charging either tax evasion or filing false returns, the government will naturally offer the defendant’s tax returns for the years charged in the indictment as part of its case-in-chief, and the defendant will be hard pressed to object to their admissibility. This, however, is not the only way the government uses the defendant’s tax returns in criminal cases. This article discusses the government’s ability to access the defendant’s returns for use in non-tax cases, as well as the evidentiary issues surrounding the admissibility of both “other year returns” in tax cases and any returns in non-tax cases.

Related Lawyers: Jeremy H. Temkin

05.05.15 | Articles

Same Facts, Different Results: Civil and Criminal Liability After ‘Newman'

New York Law Journal

The Second Circuit’s decision in United States v. Newman continues to have a significant impact on insider trading cases. In this article, we discuss Judge Rakoff’s recent decision in SEC v. Payton, compare the mental state requirement in criminal and civil insider trading cases, and consider Judge Rakoff’s recent suggestion, in a talk at NYU Law School, that civil and criminal insider trading should be addressed in two separate statutory provisions.

Related Lawyers: Elkan Abramowitz, Jonathan S. Sack

04.23.15 | Blog Posts

Duka v. SEC Redux - SEC Holds Home Court Advantage for Another Round

The Insider: White Collar Defense and Securities Enforcement

Defendants widely view the SEC’s administrative courts as an unfavorable venue to square off against the SEC’s own enforcement staff. Accordingly, as the SEC has recently channeled enforcement proceedings away from the federal courts to its “home” courts, a number of defendants have brought federal court challenges attacking the administrative proceedings on a variety of grounds. Many such challenges have failed to reach the merits, as courts have accepted SEC arguments against the courts’ jurisdiction to interfere with an ongoing agency proceeding and found that defendants are limited to the ordinary post-hearing appellate process to obtain review. In a decision filed last week in Duka v. SEC, Southern District of New York Judge Richard N. Berman ruled that one such challenge seeking to stop an SEC administrative hearing cleared these preliminary hurdles, but ultimately did not make it across the finish line. [...]

Related Lawyers: Richard F. Albert

04.22.15 | Articles

Class Action Attorney Fee Applications Under Closer Scrutiny

New York Law Journal

In this article, we discuss two recent decisions by U.S. Southern District Judge Lewis A. Kaplan commenting on the lack of effective adversarial testing of proposed fee applications following securities class action settlements, and stressing the fiduciary obligation of the court to exercise stewardship over settlement funds in that circumstance. Judge Kaplan’s thoughtful approach to the fee awards in these two decisions is likely to influence other judges considering fee applications and may well reinforce the trend of shrinking fee awards, that Judge Kaplan himself noted.

Related Lawyers: Edward M. Spiro, Judith L. Mogul

04.17.15 | Blog Posts

Big Brother Gets Bigger: Installing Independent Monitors Before a Settlement is Signed

The Insider: White Collar Defense and Securities Enforcement

Federal and state regulators frequently rely on independent compliance monitors to ensure that corporate wrongdoers follow-through on correcting the conduct that got them into trouble. Southern District of New York Judge Jed Rakoff has referred to a corporate monitor as both a “financial watchdog” and “an overseer who has initiated vast improvements in the company’s internal controls and corporate governance.” Typically installed as part of a settlement agreement between the government and those companies that have had legal and regulatory issues, the monitors assess and report back to the government on violations of the law and on the effectiveness of the corporation’s compliance and ethics programs. [...]

Related Lawyers: Robert J. Anello

04.08.15 | Articles

New Counterattack on SEC’s Home Court Advantage

New York Law Journal

In the wake of the 2010 Dodd-Frank Act’s broadening of the reach of SEC administrative enforcement proceedings, the agency undertook a major shift toward pursuing such proceedings instead of federal district court actions. Administrative proceedings, which are heard by judges employed by the Securities and Exchange Commission, are widely perceived to favor the agency. Indeed, recent data on the results of such proceedings reveal that the SEC has enjoyed a lopsided record of success, compared to its far more modest record in federal court trials. In this article, we discuss federal court challenges to the SEC’s initiation of administrative proceedings, including Duka v. SEC, in which Duka relies on recent Supreme Court precedent to assert an intriguing constitutional challenge to the status of SEC administrative law judges.

Related Lawyers: Richard F. Albert, Robert J. Anello

03.26.15 | Blog Posts

Ethical Rules for Social Media Gain Clarity

The Insider: White Collar Defense and Securities Enforcement

On March 10, 2015, the New York County Lawyers Association ("NYCLA") weighed in on the ethical implications for lawyers who use social media websites for professional self-promotion. In Formal Opinion 748, NYCLA addressed the widespread use of LinkedIn and specifically examined (1) whether a LinkedIn profile is considered "Attorney Advertising;" (2) when it is appropriate for attorneys to accept endorsements and recommendations; and (3) what information attorneys should include and exclude from social media profiles. Although the NYCLA opinion does not resolve all open questions about the nature and extent of the information attorneys can post on LinkedIn without running afoul of the New York Rules of Professional Conduct, it answers significant questions left open by two Committees of the New York State Bar Association ("NYSBA"). [...]

Related Lawyers: Catherine M. Foti

03.19.15 | Articles

Discharging Tax Debts in Bankruptcy: When is a Return not a Return?

New York Law Journal

Falling behind on one’s taxes often leads to a downward spiral, and it is not uncommon for a taxpayer who cannot pay her tax obligations to decide not to file a return. Not only does such a failure to file expose the taxpayer to additional penalties and potential criminal liability, but it can have devastating ramifications if she subsequently files for bankruptcy. This article discusses In re Fahey, in which the United States Court of Appeals for the First Circuit joined the Fifth and Tenth Circuits in concluding that filing deadlines are “filing requirements” under 11 U.S.C. Section 523(a)(*) and thus that the tax liabilities reflected on untimely returns are not subject to discharge. While these Courts of Appeals have all interpreted the so-called “hanging paragraph” in a manner that precludes virtually all late-filers from discharging tax liabilities in bankruptcy, there are compelling reasons to exclude returns accepted by the relevant taxing authority from such a harsh rule. Clearly, there is more to come on this issue. In the meantime, Fahey provides yet another reason for practitioners to urge their clients to file their returns on a timely basis.

Related Lawyers: Jeremy H. Temkin

03.12.15 | Blog Posts

Meet the Fokker: Continued Judicial Skepticism toward Deferred Prosecution Agreements

The Insider: White Collar Defense and Securities Enforcement

In recent years, the Department of Justice has come to rely on Deferred Prosecution Agreements (DPAs) to resolve many high-profile investigations of corporate wrongdoing. Under DPAs, criminal charges are filed in district court, and prosecution is deferred pending a corporate defendant’s fulfillment of remedial obligations, including payments to the government. [...]

Related Lawyers: Jonathan S. Sack

03.04.15 | Articles

White-Collar Enforcement Under Attorney General Eric Holder

New York Law Journal

When Attorney General Eric Holder took office in February 2009, the country was in the midst of a financial crisis, and many voices called for holding companies and individuals accountable for alleged criminal conduct. In this article, we discuss how the Department of Justice responded to the financial crisis, highlight key initiatives separate from the financial crisis, and address likely Department priorities going forward.

Related Lawyers: Elkan Abramowitz, Jonathan S. Sack

02.27.15 | Blog Posts

A Small Barracuda in a Big Pond: New York’s Department of Financial Services

The Insider: White Collar Defense and Securities Enforcement

World-wide financial institutions take notice – New York has a new regulator on the scene. Newsweek describes him as “body-slamming” one of the world’s largest banks, “the man the banks fear most.” The Wall Street Journal has labeled him “one of Wall Street’s most dogged pursuers.” American Banker characterizes him as “pushing the envelope” of bank regulation. In three years on the job, this regulator and the new agency he rules have extracted more than $3 billion in fines from global banks. In a speech he delivered at Columbia University this Wednesday, the regulator made clear that, in all likelihood, these headline-grabbing events are just a sign of things to come. [...]

Related Lawyers: Robert J. Anello


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