Publications

04.16.14 | Blog Posts

When Is An Internal Investigation Not Privileged?

The Insider: White Collar Defense and Securities Enforcement

Compliance programs have grown in importance along with the demands of new laws and regulations.  These programs are increasingly seen as vital to preventing corporate misconduct or, at least, mitigating sanctions if misconduct is found.

At the same time, company management needs to think through the scope of work assigned to compliance personnel, especially when questionable conduct is detected.  Under these circumstances, an important question should be addressed:  who should look into the misconduct – compliance staff or in-house or external legal counsel? [...]

Related Lawyers: Jonathan S. Sack

04.02.14 | Blog Posts

Punishment Without Cause: Disgorgement And Forfeiture Of Salary And Pensions

The Insider: White Collar Defense and Securities Enforcement

It has become popular among prosecutors and regulators in recent years to claim that officials who engaged in wrongdoing on the job should be forced to surrender every dollar earned on that job.  The U.S. Attorney for the Southern District of New York has issued a policy statement that his office will use federal forfeiture laws to seek to strip the pensions of state officials convicted on federal corruption charges.  Such policy mirrors the position often taken by SEC enforcement lawyers in seeking to disgorge all of the salary and bonuses earned by corporate officials found to have engaged in misdeeds.  The problem with these claims, both as a matter of law and as a matter of fairness, is that they most often fail the basic test of causation. [...]

Related Lawyers: Richard F. Albert

04.01.14 | Articles

Conscious Avoidance: An Over-Used Doctrine

New York Law Journal

This article, “Conscious Avoidance: An Over-Used Doctrine,” discusses the problems engendered by court interpretations of the evidentiary foundation required for a conscious avoidance jury instruction in criminal cases.

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

03.24.14 | Articles

Congress Weighs In On Offshore Enforcement

New York Law Journal

A recent report by the U.S. Senate Permanent Subcommittee on Investigations (PSI) criticized both the Department of Justice and the Internal Revenue Service for their purported "lax enforcement" of the use of offshore bank accounts to evade U.S. tax laws. The report and subsequent hearings, however, ignore significant progress in the pursuit of offshore tax evasion through both the IRS's Offshore Voluntary Disclosure Programs and the DOJ's Program for Non-Prosecution Agreements or Non-Target Letters for Swiss Banks. This article discusses how Congress could contribute to the appropriate enforcement of the tax laws by fully funding both the DOJ and the IRS.

Related Lawyers: Jeremy H. Temkin

03.20.14 | Blog Posts

Medical Research Fraud And HHS's Office Of Research Integrity: Watching The Watchdog

The Insider: White Collar Defense and Securities Enforcement

Even for those who carefully follow legal developments in the health care fraud arena, the Department of Health and Human Service’s Office of Research Integrity (“ORI”) is an agency that rarely appears on the radar.  According to its website, ORI “oversees and directs Public Health Service (PHS) research integrity activities,” including the integrity of research projects funded by agencies such as the National Institutes of Health (“NIH”) and the Centers for Disease Control and Prevention.  ORI’s primary functions include such tasks as “monitoring” investigations that research institutions conduct when there are allegations of data falsification, and proposing administrative actions against medical researchers found to have fabricated the results of their studies. [...]

Related Lawyers: Robert M. Radick

03.13.14 | Blog Posts

Representing Clients In The Age Of Social Media Is Not As Easy As You Think

The Insider: White Collar Defense and Securities Enforcement

The proliferation of social media over the past decade has drastically changed how people communicate.  Without much thought, people publicly post detailed personal information and photographs documenting their whereabouts and moment-to-moment activities.  In the litigation context, the increase in use of social media has created enormous amounts of discovery material.  Most attorneys are well aware that the personal items and pictures posted on people’s social pages are ripe areas to learn about an opposing party, opposing counsel, potential witnesses, jurors and judges.  Law enforcement agencies too -- like the NYPD, which created a social media unit in 2011 -- are mining social media for information concerning past and prospective criminal activity.  Most laws and rules governing how attorneys may advise their clients concerning the handling of their personal information were developed in the pre-Facebook age.  But, the differences between social media and other forms of discoverable material have altered the legality of attorneys’ actions both substantively and ethically in ways that many attorneys would not expect and in ways that conflict with their experience and instincts.  One problematic – and largely unanswered – question is what advice an attorney can legally and ethically give to a client who has posted potentially incriminating or discoverable material on a social media website. [...]

Related Lawyers: Catherine M. Foti

03.06.14 | Blog Posts

Contorting The Law Of Disgorgement In Contorinis: Disgorging Ill-Gotten Gains That Were Never Gotten

The Insider: White Collar Defense and Securities Enforcement

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. [...]

Related Lawyers: Stephen M. Juris

03.06.14 | Blog Posts

Destitute Before Proven Guilty: Supreme Court OKs Asset Seizure In White-Collar Cases That Bars Defendants' Ability To Retain Counsel

The Insider: White Collar Defense and Securities Enforcement

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. [...]

Related Lawyers: Robert J. Anello

03.05.14 | Articles

Are We Criminalizing Politics as Usual? Case Against Former Virginia Governor

New York Law Journal

Political leaders and their supporters routinely use the trading of favors to gain and maintain power. Politics in our own era is no exception. This article examines the law of honest services fraud, used to fight public corruption, in the context of the January 2014 indictment of former Virginia Governor Robert McDonnell and his wife, Maureen McDonnell. The case raises important questions about where the line should be drawn between ordinary politics and criminal misconduct.

Related Lawyers: Elkan Abramowitz, Jonathan S. Sack

02.26.14 | Articles

SEC Enforcement Data Analyses: Volume 2

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.

Related Lawyers: Lawrence S. Bader

02.18.14 | Articles

SLUSA's Broad Definition Of 'Covered Class Action'

New York Law Journal

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.

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

02.12.14 | Blog Posts

Health Care Self-Disclosure Protocols – Is It Worth It To Self-Report?

The Insider: White Collar Defense and Securities Enforcement

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. [...]

Related Lawyers: Jonathan S. Sack

02.05.14 | Blog Posts

Extradition Italian Style: Knock, Knock, Knocking On Amanda Knox's Door

The Insider: White Collar Defense and Securities Enforcement

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. [...]

Related Lawyers: Robert J. Anello

02.04.14 | Articles

Martoma: Prior Bad Acts And Hobson's Choice for Defendants

New York Law Journal

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.

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

February 2014 | Articles

Criminal Forfeiture Laws: Pretrial Seizure of Assets and the Sixth Amendment

Business Crimes Bulletin

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.

Related Lawyers: Robert J. Anello

January 2014 | Articles

Criminal Forfeiture Laws: Tying a Defendant’s Hands

Business Crimes Bulletin

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.

Related Lawyers: Robert J. Anello

01.15.14 | Blog Posts

Out-Of-Balance: Basic Flaws In The Brady System

In recent years, the repeated, notable failures of the Brady disclosure regime by which prosecutors are required to produce evidence favorable to the accused in criminal cases have led to a cascade of criticism and growing calls for change.  A recent opinion by Chief Judge Alex Kozinski of the Ninth Circuit Court of Appeals, dissenting from the denial of review by the entire court in United States v. Olsen, opens with the memorable words: “There is an epidemic of Brady violations abroad in the land.  Only judges can put a stop to it.”  The forceful opinion, which provoked a number of editorials in leading newspapers,  provides an illustration of some of the basic flaws of the Brady disclosure system. [...]

Related Lawyers: Richard F. Albert

01.15.14 | Articles

Second Circuit Tackles Required Records Exception

New York Law Journal

As part of its recent attck on undisclosed offshore accounts, the Department of Justice has issued numerous subpoenas requiring taxpayers to produce the records mandated by the Bank Secrecy Act. Late last year, the United States Court of Appeals for the Second Circuit joined with five other Courts of Appeals in rejecting a taxpayer's assertion of the privilege against self-incrimination and holding that the required records doctrine precludes application of the Fifth Amendment in reponse to such subpoenas. This article discusses the significance of the Second Circuit's decision and the implications for counsel representing taxpayers with undisclosed offshore accounts.

Related Lawyers: Jeremy H. Temkin

01.08.14 | Blog Posts

Stephen Cutler Has A Point About The Increasing Size Of Settlements

The Insider: White Collar Defense and Securities Enforcement

In late November, J.P. Morgan, the Justice Department and other agencies reached a $13 billion settlement over practices involving mortgage securities.  Three days later, J.P. Morgan’s General Counsel, Stephen Cutler, participated in a panel discussion hosted by a trade group named The Clearing House.  According to a November 25 article in the The Wall Street Journal, Mr. Cutler remarked, “At what point does this stop?,” referring to fines for J.P. Morgan and other banks. [...]

Related Lawyers: Lawrence S. Bader

01.08.14 | Articles

Dilemma of Self-Reporting: The FCPA Experience

New York Law Journal

Self-reporting misconduct is one of the most difficult judgment calls faced by white-collar defense counsel and their clients. While voluntary disclosure is said to be rewarded by the government, the benefits are often quite difficult to make out. This article examines the dilemma of self-reporting in the context of the federal government's enforcement of the FCPA.

Related Lawyers: Elkan Abramowitz, Jonathan S. Sack


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