Publications

The government's ever-evolving response to the United States financial crisis has come full circle, as civil Justice Department Attorneys seek to rely on legislation enacted to protect financial institutions from fraud to sue those very same institutions. Recently, the United States Attorney's Office for the Southern District of New York has initiated a number of law suits under the "obscure" Financial Institutions Reform Recovery Enforcement Act (FIRREA). FIRREA was enacted in 1989 in response to the massive failure of almost half of America's savings and loan institutions. In its 24 year history, the law typically has been used to bring suit against officers and directors of failed institutions. The government now seeks to expand the statute's reach to include the institutions themselves. [...]

At one time whistleblowers were relatively rare and isolated, and the law did not grant them much protection. But that's not the case anymore. Fulbright & Jaworski's recent litigation trends survey of in-house counsel found that more than 25 percent of companies had faced whistleblower allegations in the past three years.

Whistleblowers employed by defense contractors, pharmaceutical manufacturers and other companies have increasingly taken allegations of violations of law to the government—with striking results. Companies on the receiving end of these allegations have paid billions of dollars in fines and penalties following whistleblowers' cooperation with law enforcement authorities and civil lawsuits. What's more, new laws have granted whistleblowers enhanced protections against retaliation and increased financial incentives to tell the government about suspected violations of law by their employers. [...]

In recent years, pharmaceutical companies have faced criminal investigations and charges in regard to alleged off-label marketing of prescription drugs and kickbacks to doctors. For this reason, the filing last month of two civil cases against Novartis was noteworthy and may aid defense lawyers in their efforts to oppose criminal charges being filed against clients in the health care industry. [...]

Pursuant to the Electronic Communications Privacy Act of 1986, the government can obtain emails and electronic data stored by third parties like Google, Yahoo! and Facebook. Given the dramatic changes in the way people use technology over the past 27 years, Congress is presently drafting legislation aimed at bringing the rules regulating the government's access to electronic communications into the 21st century. As discussed in this article, this effort is likely to get a boost from publicity surrounding the recent release of internal IRS documents describing the agency's policies regarding how it obtains emails, text messages and other private electronic communications. While the IRS's historical practices appear to have been consistent with those applied by other law enforcement agencies, the public response to the IRS's documents and recent federal court decisions addressing the protection to be accorded emails demonstrate the need for legislative action.

In recent congressional testimony, Attorney General Eric Holder acknowledged that prosecutors would hesitate before filing criminal charges against a large financial institution because of the effect on the economy of such a prosecution. This article argues that the Attorney General's comments reflect a shift by DOJ, following the demise of Arthur Andersen, toward settlements with companies that either avoid criminal convictions or seek to mitigate their impact on innocent third parties.

Three times over the past four years, the IRS has given taxpayers with undisclosed offshore accounts the opportunity to come clean and avoid prosecution. While the most recent offer – the 2012 Offshore Voluntary Disclosure Program (OVDP) – remains open indefinitely, the IRS's recent decision to disqualify approximately 50 taxpayers who disclosed Bank Leumi accounts could undermine the program's continued success. [...]

In our June 24, 2011, article for NYLJ Outside Counsel, titled "How 'AT&T Mobility' Changes the Course of Securities Class Actions, Arbitrations," we discussed the then-recent U.S. Supreme Court decision in AT&T Mobility v. Concepcion and predicted that Concepcion, which held the Federal Arbitration Act (FAA) preempts state law defenses to contractual class action and arbitration waivers, would likely lead to a conflict between the FAA and long-standing FINRA rules prohibiting member firms from compelling class litigants to arbitrate their disputes. This article discusses an opinion issued by a FINRA Hearing Panel, in the matter of Department of Enforcement v. Charles Schwab & Co., holding that, consistent with Concepcion, the brokerage could not be penalized by FINRA for inserting a class action and arbitration waiver provision into their customer agreements.

I almost feel sorry for Mary Jo White, the Chairman of the SEC, and Andrew Ceresney and George Canellos, soon to be Co-Directors of the SEC’s Division of Enforcement. Four days after Ms. White was sworn in, Gretchen Morgenson of the New York Times was reminding Ms White on page one of the Times' Sunday Business Section that time was running out on the SEC's ability to bring cases based on "questionable practices and disclosures arising from the mortgage bust of 2008." [...]

The news is out! There's a buzz in the blogosphere. It's trending on Twitter. The Securities and Exchange Commission has authorized the use of social media channels for the disclosure of material, non-public information. In a Report of Investigation released earlier this month, announcing that its Division of Enforcement determined not to pursue an enforcement action against Netflix, Inc. and its Chief Executive Officer Reed Hastings, the SEC provided guidance regarding how issuers using social media channels to disseminate material non-public information may comply with Regulation FD and the Commission's August 2008 Guidance on the Use of Company Web Sites. [...]

This article discusses three decisions from the U.S. District Court for the Southern District of New York pertaining to federal diversity jurisdiction. These cases serve as a reminder that the dictates of the diversity statute, 28 U.S.C §1332, may not be as plain as they appear, especially to a judiciary growing skeptical of the continued need for diversity jurisdiction as a protection against local bias by state courts.

Two decisions do not ordinarily a trend make. But when New York federal judges author two circuit court opinions, issued within approximately three months of each other, dismissing mail fraud claims for failing to satisfy the "mailing" requirement, it is worth noting. [...]

Within two weeks of each other, two judges in the SDNY reached different results in two SEC cases alleging violations of the Foreign Corrupt Practices Act. In both cases, the defendant never set foot in the United States. One judge ruled that there was personal jurisdiction over the defendant. The other ruled that there was no personal jurisdiction. A careful reading of the cases leaves the reader at a loss to articulate a guiding principle that should apply to the jurisdictional question raised in both cases.

Vagueness is a common problem in white-collar criminal cases. In many instances the line between legal and illegal conduct is blurry at best. This means that someone could face prosecution, a damaged reputation, loss of livelihood and prison time for conduct he or she did not know, and could not reasonably have known, was criminal. [...]

This article discusses the courts' treatment of criminal defendants' document subpoenas to third parties under Rule 17(c) of the Federal Rules of Criminal Procedure. Over the years, the practical utility of these subpoenas has been limited because courts have tended to hold them to the demanding standard that the Supreme Court utilized in United States v. Nixon, even though that standard arose in a different context. The article discusses how in recent decisions, however, courts have properly begun to depart from the rote application of the Nixon standard.

Several months ago, I raised the question of why the large-scale accounting fraud cases of the type that had been so prevalent in the early 2000s were no longer a staple for either federal prosecutors or the SEC. In so doing, I was not the only one to have noted a dramatic shift away from such cases towards investigations involving Ponzi [...]

President Obama and Congressional Republicans are in the midst of a constitutional showdown over the President's recess appointment power. President Obama's appointees to the National Labor Relations Board (NLRB) aggressively expanded the rights of employees and unions throughout 2012. Now in Noel Canning v. NLRB (January 25, 2013), the D.C. Circuit has held that the President's recess appointments to the NLRB are unconstitutional, likely leading to a Supreme Court resolution of this showdown that could drastically change the direction of federal labor law. This article examines the Noel Canning decision and its impact on the NLRB's recent expansion of employee rights.

On February 1, 2013, the Centers for Medicare and Medicaid Services (CMS) published the long-delayed final rule that is intended to implement the Physician Payments Sunshine provisions that were included in the Patient Protection and Affordable Care Act. Under these provisions, which were passed in March 2010 and were originally due to be implemented in 2012, doctors and teaching hospitals will be required to report the payments that they receive from pharmaceutical and device manufacturers, with the stated goal being to shed light on the financial relationships between physicians and the industry. [...]

Earlier this week, Harvard University acknowledged the fact that, in the wake of last summer's cheating scandal that rocked the campus, it had secretly searched the e-mail accounts of 16 Resident Deans. The e-mail search was undertaken last August in an effort to determine who had leaked to the media a "confidential" internal e-mail regarding the cheating and also to determine whether any personal student information had been leaked. Harvard did not acknowledge the fact that it had searched the e-mails until this week, seven months after the searches and only after the Boston Globe broke the story. In the days since Harvard’s surreptitious e-mail search became public, the University has fallen under enormous criticism from faculty, administrators and privacy advocates, all of whom feel blindsided and violated by the University's unannounced and undisclosed search of electronic data. But Harvard's approach highlights the interesting and complex issues surrounding the competing concerns companies and institutions have in both conducting thorough internal investigations while, simultaneously, protecting the privacy interests of their employees in the digital age. [...]

In criminal tax cases, the "advisory" Sentencing Guidelines are predicated on an estimate of the "tax loss" resulting from the defendant's conduct. Over the years, the United States Courts of Appeals have split on the issue of whether the "tax loss" computation should be reduced by any deductions the defendant failed to take on his original returns. This article explains the issue, the different approaches taken by the Courts of Appeals and amendments being considered by the Sentencing Commission to address the issue.

On Tuesday, March 5, the SEC’s insider trading case against billionaire Dallas Mavericks owner Mark Cuban took a new twist when a federal district court in Texas declined to end the 2008 civil enforcement action. The SEC alleges that Cuban engaged in insider trading when he sold 600,000 shares of Mamma.com Inc., a company in which he was the largest shareholder, after learning the company intended to offer a private investment in public equity (PIPE). Although the Court characterized the evidence against Cuban as “spotty,” “brief,” and “ambiguous,” it nevertheless concluded that the case should be allowed to proceed to trial because, according to the Court, certain understandings that Cuban would not disclose or trade based upon confidential information he received, may have been “implicit” in the communications between Cuban and company insiders. Unfortunately, the Court’s decision, a self-proclaimed “close” call, further muddies the waters of insider trading law. [...]

Courts and commentators have recently questioned why the government has not more aggressively prosecuted individuals when companies have admitted or otherwise settled charges of misconduct. This article suggests that individuals have not been charged not because of timidity on the part of prosecutors but, rather, based on a realistic assessment of the difficulty of proving an individual's guilt - a difficulty that the government itself may be masking by overstating the strength of its case against companies.

The Fifth Amendment dictates that no person "shall be compelled in any criminal case to be a witness against himself." While most non-lawyers (and many lawyers) might assume that this simple edict means the government cannot force an individual to produce incriminatory documents, the law is far more muddled. And lawyers representing taxpayers with undisclosed offshore accounts are asking the United States Supreme Court to clarify the scope of the privilege against self-incrimination in this important context. [...]

The law requires the SEC to bring enforcement actions seeking penalties against individuals who violate the securities laws within five years. The Supreme Court issued a unanimous ruling today that rejects the SEC’s argument that the five year clock begins to tick when they discover any alleged wrongdoing rather than the date on which the wrongdoing was committed. The author previously has suggested that the application of the SEC’s proposed "fraud discovery rule" by a government agency charged with investigation and enforcement would be counter-productive and effectively would eliminate the five year statute of limitations. To put this into context, [...]

The President's nomination of Mary Jo White to become Chairman of the SEC has generated reservations as well as praise. Naysayers wonder whether her years in private practice representing banks and bankers, including J.P. Morgan Chase, Kenneth Lewis of Bank of America andJohn Mack of Morgan Stanley, will make it impossible for her to “switch sides” and hold financial companies accountable for violations of the law. [...]

Adequate D&O insurance coverage is indispensable protection for corporate executives and directors. However, the conduct of a single covered individual can potentially jeopardize coverage for the entire group of insureds in a way few might have anticipated. This article discusses a Southern District case, XL Specialty Insurance v. Level Global Investors, highlighting this issue.

To state that the federal RICO statue has long since slipped the bounds of Congress’s original intent is hardly a novel observation. Although the U.S. Attorney’s Manual points out that "the purpose of the RICO statute is 'the elimination of the infiltration of organized crime and racketeering into legitimate organizations,'" the very same paragraph of the Manual proclaims that "the statute is sufficiently broad to encompass illegal activities relating to any enterprise affecting interstate or foreign commerce." The varied range of successful federal prosecutions premised on the RICO statute only proves the point, and numerous industries, including health care, have thus come within the statute's reach. [...]

Though the adoption of Electronic Medical Records (EMRs) was expected to create greater efficiencies and improvement in the quality of medical care, recent assessments of EMRs and their utility have begun to grow darker. This article discussed emerging issues regarding EMRs, and focuses in particular on the increasing concerns about their use as a means to commit health care fraud.

The criminal justice system – particularly at sentencing – necessarily puts an unflattering light on those who have committed crimes. Prosecutors correctly inform the sentencing court of the bad deeds that resulted in the defendant’s conviction. Probation Officers also traditionally focus on the crime, and ignore (or give short shrift) to the defendant’s good deeds. [...]

The federal mail fraud statute is a broad catch-all criminal law that has been called the prosecutor's 'secret weapon.' It, however, is not without limits. This article discuss the history and jurisprudence of the mail fraud statute, and, in particular, a recent decision by the Ninth Circuit authored by none other than SDNY Judge Jed Rakoff, sitting by designation. In that case, United States v. Phillips, Judge Rakoff, who published a scholarly article on mail fraud before taking the bench, examined the requirement that the mailing be 'for the purpose of executing' the fraudulent scheme.

President Obama's recent naming of Mary Jo White to be Chairman of the SEC has been greeted with praise from almost all quarters. But because she is best known for her highly successful tenure as a federal prosecutor, in response to the news of her current appointment, some have raised questions about, as the New York Times put it, her “command of Wall Street arcana” because “[r]egulatory chiefs are often market experts or academics.” [...]

Since the Second Circuit's 1957 decision in United States v Klein, defendants in criminal tax cases have commonly been charged with having conspired to "impede, impair, defeat and obstruct" the Internal Revenue Service in the "ascertainment, evaluation, assessment and collection" of income taxes. While commentators have questioned the statutory authority for the so-called Klein conspiracy, challenges to the charge have rarely gained traction. In late November 2012, however, the Second Circuit decided United States v Coplan in which it recognized "infirmities in the history and deployment" of the conspiracy statute to efforts to impede or obstruct the IRS. This article discusses the Coplan decision, the continuing validity of the Klein doctrine, and the possibility that the Supreme Court will address the issue.

2012 was a big year in the government's pursuit of white collar crime. 2013 – the five year anniversary of the financial crisis – brings new legislators, new regulators, and the possibility that a looming statute of limitations may compel authorities to act or forever abandon certain investigations that arose as a result of the economic crisis. Nevertheless, the landscape of white collar enforcement and financial regulation in the coming year is likely to look familiar. [...]

Aggressive prosecutions of corporate misdeeds and complaints by the public that companies and their executives are not being punished enough both are in vogue. This article discusses the evolution of corporate criminal liability in the United States and the manner in which the government typically holds a corporation accountable for employee misconduct. The article concludes that the government's increased reliance on deferred prosecution agreements (DPAs) and non-prosecution agreements (NPAs) is reasonable given the harshness of judicially-created law deeming corporate entities criminally liable for the acts of even a few wrongdoers.

Early last month, Netflix disclosed the fact that it and its Chief Executive Officer, Reed Hastings, had received “Wells Notices” from the Staff of the Securities and Exchange Commission. Those Wells Notices threatened civil claims and cease and desist proceedings against the company and Mr. Hastings predicated on Mr. Hastings' June 2012 Twitter post touting the fact that Netflix users had streamed more than 1 billion hours of video that month. The SEC believes that Mr. Hastings' post potentially violated SEC Regulation Fair Disclosure (Regulation FD), which requires companies and their representatives to disclose material nonpublic information through the filing of a Form 8-K [...]

Over the past year, the National Labor Relations Board has issued a series of decisions that have significantly expanded the rights of non-supervisory employees, including non-unionized employees, to discuss information that many employers would consider confidential, and even post this confidential information on social media sites. This expansion includes an employee's right to discuss the content of investigative interviews, even when an employer directs an employee to keep the interview confidential. Although the NLRB has yet to directly opine on the subject, these decisions may have serious implications for the corporate attorney-client privilege. [...]

The law regarding the Fourth Amendment's application to digital evidence continues to evolve as each branch of government tries to keep pace with society's increased reliance on technology, with legislators and the courts working to frame the limits of government access while balancing competing societal privacy expectations. This article looks at circumstances under which the government can obtain digital information.

President Obama and Speaker Boehner’s discussions aimed at avoiding the fiscal cliff will almost certainly result in the government collecting more taxes: either by increasing the rates paid by upper-income Americans, by closing loopholes that favor the wealthy, or a combination of the two. Both sides of this debate invoke “fairness” in support of their position, but based on the dialogue (or lack thereof) in Washington, it appears that fairness, like beauty, is in the eye of the beholder. [...]

The Securities and Exchange Commission’s whistleblower bounty program, which has been in effect for just over a year, has prompted a drastic increase in the number of individuals providing information of potential wrongdoing to the SEC. This article discusses the challenges that the prevalence of whistleblowers and the special protections offered to them creates for defense attorneys and the companies they represent.

Mediation plays an important role in resolving litigation at all levels of complexity yet the promise of confidentiality for mediation materials while broad, is not guaranteed. This article examines the recent Southern District decision in Dandong v. Pinnacle Performance which, guided by the Second Circuit's 2011 opinion in In re Teligent, discusses the extraordinary need a third party must show in order to obtain disclosure of mediation materials.

As sentences in insider trading cases have grown longer, insider trading has continued, apparently at historically high rates, with increasingly longer sentences being meted out. However, the longer sentences do not appear to deter insider trading. What does deter insider trading is the likelihood of getting caught. And the likelihood of getting caught is largely a function of Congressional funding of investigations and prosecutions of white collar crime. [...]

The Court of Appeals for the Second Circuit sent shockwaves through the pharmaceutical industry with its decision in United States v. Caronia. Alfred Caronia was a pharmaceutical sales representative convicted of a misdemeanor conspiracy to introduce a misbranded drug. When promoting Xyrem, a prescription narcolepsy drug, Caronia made comments to a doctor about various uses of the drug that had not been approved by the Food and Drug Administration. The government did not contest at trial the truthfulness of the comments to the doctor. Though it was, and is, lawful and common for doctors to prescribe medication "off-label" [...]

Whether referred to as electronic medical records, electronic health records, or electronic patient records, there is no doubting the tremendous potential benefits that the digitization of medical data holds for the health care industry and the public at large. EMRs can make a patient’s medical information readily accessible to a range of treating professionals, whether for routine visits or emergencies in which a patient cannot personally provide the critical information practitioners require. EMRs also permit doctors to preserve information [...]

Although the "pioneering nature" of the use of wiretaps in the insider trading case of United States v. Rajaratnam has received a great deal of media attention, the statutory prerequisites to wiretapping have received little prior close legal scrutiny in white-collar cases. This article discusses the wiretap law's "necessity" requirement, which is intended to limit the government's use of wiretaps. The article suggests that the Second Circuit use the opportunity presented by Rajaratnam to define this requirement more rigorously than it has in prior decisions.

The Department of Justice and Securities Exchange Commission loudly have trumpeted victories achieved in their renewed battle against insider trading and Wall Street malfeasance, repeatedly warning that there are more cases to come. Just yesterday, the United States Attorney for the Southern District of New York announced “the most lucrative insider trading scheme ever charged” against a former portfolio manager of the well-known hedge fund, SAC Capital Advisors. [...]

The Securities Exchange Commission’s Annual Report on the Dodd-Frank Whistleblower Program for Fiscal Year 2012 (the “Report”), released yesterday, reveals a number of things. The SEC has received a lot of tips, complaints, and referrals: A total of 3,001 in fiscal year 2012 with the lowest number (166) in November 2011 and the highest number (313) in May 2012. Those tips, complaints, and referrals came from [...]

For defense lawyers of a certain vintage, the early 2000s were a veritable golden age for accounting fraud cases. The marquee cases and investigations of the day – Enron, Computer Associates, Xerox, Adelphia, WorldCom, and Royal Ahold, among many others – were big, complex, and resource-intensive. They also were interesting and nuanced. And while many did result in guilty verdicts or onerous SEC settlements, [...]

The Great Recession has severely impacted many Americans, leaving them with overwhelming financial burdens. Beginning in February 2011 the IRS adopted a "Fresh Start" initiative to provide individuals and small businesses with a number of options to mitigate their outstanding tax obligations. This article addresses the IRS's initiative and how it impacts taxpayers and practitioners representing them.

In recent years, the Justice Department and other government agencies have increasingly turned to deferred prosecution agreements and non-prosecution agreements as means for combating corporate crime. This article examines the ongoing debate over the efficacy of DPAs and NPAs and the government’s expanding reliance on these agreements.

This article discusses the growing line of cases allowing individual defendants—largely former corproate officers and directors—to overcome an assertion of the attorney-client privilege by their former companies in order to defend themselves in civil and criminal litigation.

The price of doing financial business in the United States has just gone up. The Department of Justice is taking a new tack in its efforts to track and prosecute money laundering that occurs through financial institutions. Rather than focusing on money laundering that results from substantive criminal violations [...]

This article discusses the recent decision in Reserve Management v. Willkie Farr & Gallagher, permitting removal of claims traditionally thought to be within the exclusive province of state courts, even in the absence of diversity jurisdiction.

April 15 is commonly viewed as “Tax Day” in the United States, but approximately 11 million taxpayers take advantage of the automatic extension that allows them to file their returns by October 15. While many taxpayers file for this six month extension because of unavoidable delays in obtaining information from third parties, for some taxpayers the decision to “go on extension” [...]

"Selective" waiver of attorney-client privilege and work product protection has been considered extensively by federal courts. In contrast, New York state case law is sparse, even as high-profile investigations of white-collar offenses by state agencies are on the rise, and companies often find themselves in parallel civil litigation in state courts. This article discusses New York state court decisions on selective waiver and contrasts them with federal case law.

On Wednesday, October 3, 2012 Morvillo Abramowitz Partners Jeremy H. Temkin and Richard F. Albert, joined by Douglas M. Lankler, Executive Vice President, Chief Compliance and Risk Officer, Pfizer, Inc., took part in a Directors & Boards webinar entitled, "The Management of Risk and Compliance: The Board’s Role." Temkin, Albert and Lankler discussed the risk and compliance responsibilities facing the Board, the elements of a well-designed compliance program, and lessons to learn based on cautionary case studies from recent headline-grabbing breakdowns.

Under the “misappropriation theory” of insider trading, a person violates the securities laws by breaching a fiduciary duty to keep information confidential. But what happens when the entity to whom the fiduciary duty was owed concludes, after the fact, that the person at issue did not violate any fiduciary duty? Can the SEC still sue that person for insider trading? [...]

Recent money laundering prosecutions illustrate nascent attempts to criminalize regulatory non-compliance by focusing on what the government believes are improper banking procedures or compliance weaknesses. Financial institutions long used to measuring their anti-money laundering program against the norms established by bank regulators will now have to consider whether their programs measure up to Justice Department standards, enforced by the threat of criminal prosecution. This article discusses new trends in anti-money laundering investigations, and what this means for the banking industry and other financial institutions.

While there may be truth to the old saying that there are “lies, damn lies, and statistics,” the use of claims data to detect fraud in the health care industry has often been thought to be beyond reproach. Data mining techniques and investigations that stem from billing anomalies have been the bread and butter of the federal government’s Medicare Fraud Strike Force; prosecutions that have arisen from claims data have resulted in significant prison sentences for those convicted of defrauding public health care programs and private insurers; and press releases issued by Department of Justice officials trumpet the importance of claims data [...]

The recent announcement that the IRS granted a $104 million whistleblower award to convicted former UBS banker Bradley Birkenfeld generated front-page news coverage. Birkenfeld, the U.S.-bred former private banker who provided the government with detailed information regarding a program catering to U.S. taxpayers seeking to hide assets in Swiss accounts, may be correct in proclaiming himself  “the most famous whistleblower in the world.” As has been discussed in detail elsewhere, [...]

Because tax cases frequently turn on complex accounting principles, one of the first steps a defense lawyer takes in any investigation is to retain an accountant to assist in representing the client. In United States v. Kovel, the U.S. Court of Appeals for the Second Circuit held that certain kinds of work done by such an accountant is privileged. As discussed in this article, it is important for counsel to take care to ensure that the accountant's work in fact falls within the Kovel doctrine and that the privilege is not waived.

Over the past several years, it has become commonplace to hear the general public and pundits alike grouse about the lack of criminal prosecutions or regulatory enforcement proceedings arising out of the financial dislocations of 2007 and 2008. There are many reasonable responses to these complaints, and almost all of them – as representatives of the Department of Justice and SEC emphasized in recent media statements – start with the actual facts and evidence. Not surprisingly, [...]

Since being enacted in 1984 to address the growing problem of computer hacking, the Computer Fraud and Abuse Act has been used to prosecute a wide variety of behavior, including the violation of a non-compete agreement by a former employee, the leak of classified government materials, and cyber-bullying. This article examines recent court decisions and legislative efforts that seek to clarify the CFAA and its scope.

On Monday, a jury convicted Doug Whitman of insider trading, extending the government’s unbeaten streak in its recent sweeping crackdown on insider trading, which has resulted in more than 75 convictions and guilty pleas. In this recent round of insider trading cases, brought by the United States Attorney’s Office for the Southern District of New York beginning in 2009, juries have rejected practically every defense proffered by defendants. In the case against hedge fund billionaire Raj Rajaratnam, the jury rejected [...]

This article discusses Da Silva Moore v. Publicis Groupe, a case in which the parties are using predictive coding to aid in ediscovery. In a recent decision in that matter, the Magistrate Judge declined to recuse himself notwithstanding his public advocacy of predictive coding. His decision explores the interesting issue of whether a judge’s strongly held and publicly expressed views on an aspect of litigation should be grounds for disqualification.

As the “will he or won’t he” controversy continues to swirl around demands that Mitt Romney release multiple years of his federal income tax returns, some commentators have speculated that Governor Romney’s reluctance to produce those returns relates to his Swiss bank account. Some have gone so far as to suggest that Governor Romney may have failed to disclose that account on his original returns and [...]

A recent Second Circuit decision provides guidance against the practice of providing a copy of the indictment to the jury during deliberations. This article discusses issues presented by "speaking indictments," the court's decision in United States v. Esso, and its guidance, which is particularly apt in white collar cases.

Along with the increase in the application of white collar criminal laws of various countries to companies' international operations, multinational corporations facing international investigations have faced a confusing array of laws that govern the confidentiality of communications involving in-house and outside counsel. This article examines the myriad of laws that apply in the United States and abroad and offers strategies to maximize protection of the attorney client privilege.

The Internal Revenue Service recently touted the success of its 2009 Offshore Voluntary Disclosure Program and 2011 Offshore Voluntary Disclosure Initiative and provided long-awaited guidance regarding its 2012 Offshore Voluntary Disclosure Program. This article discusses both significant aspects of the new guidance and an IRS initiative to bring taxpayers living overseas into compliance with their U.S. tax obligations.

Drawing conclusions as to precise reasons for the result of any particular trial is notoriously difficult and subjective, even for those who sat through the proceeding in the courtroom. But the coincidental timing of the verdicts in three high profile federal criminal trials – the acquittal of Roger Clemens, the effective acquittal of John Edwards [...]

Instances of government prosecutorial misconduct related to ‘Brady’ Disclosures in criminal cases have been well documented in the media. This article details recent efforts in Congress to reform the procedures surrounding Brady Disclosure.

In the more than 36 years I have practiced criminal defense law, I have had many occasions to represent people who, out of self-interest, chose to cooperate with law enforcement against others in order to avoid criminal prosecution or obtain leniency. Often, the choice to cooperate is a difficult one in which the client weighs [...]

Foreign litigants in U.S. courts can find themselves caught between broad federal discovery orders and far more restrictive privacy-driven laws of the countries in which they are located. This article discusses two recent cases in which U.S. courts had to balance foreign privacy laws with U.S. discovery requests.

Less than a week ago, in testimony before Congress, a representative of the United States Department of Health and Human Services (“HHS”) offered a strikingly negative assessment of the reliability of data that the government uses to detect fraud in the Medicaid program. As HHS Regional Inspector General Ann Maxwell stated to the House Committee [...]

Recent high-profile prosecutions of serial fraudsters like Bernard Madoff have fanned the flames of a debate regarding whether economic danger can be the basis for imposing detention to protect the financial safety of the community. This article discusses two recent district court opinions addressing misbehavior by white collar defendants while released on bail and the implications for defense attorneys.

This past weekend’s New York Times cover story describing the dramatic rise in identity thieves targeting the United States Treasury is old news to tax practitioners. In my January 25, 2012 post, I discussed the National Taxpayer Advocate’s lament regarding the IRS’s need for additional funding. While that post focused on the impact underfunding has [...]

As the recent publicity surrounding the Wal-Mart investigation has demonstrated, the Foreign Corrupt Practices Act is a major law enforcement priority. This article discusses the tax implications of payments made to foreign officials. While there is a risk that such payments may give rise to criminal tax charges, counsel should not assume that all such payments are not deductible.

A closely watched white collar criminal case poses an interesting question in a challenging context: just how egregious do a juror’s lies during jury selection have to be in order to warrant a new trial? United States v. Daugerdas is the third and final of a series of criminal prosecutions brought by federal prosecutors against partners [...]

According to government data, the number of wiretaps authorized by courts has more than doubled in the past decade. The number of individuals interecepted by wiretaps also has increased significantly. Yet, the percentage of authorizations resulting in incriminating evidence and convictions has steadily declined. The inevitable conclusion is that the number of innocent people being wiretapped over the past decade has increased. Despite this trend, federal courts have been inconsistent in their application of federal wiretap law intended to protect the crucial interests at stake.

Though internal investigations conducted by in-house counsel or an outside law firm are usually protected by attorney-client privelege, shareholders have been permitted to obtain privileged information when a "fiduciary exception" can be established. This article examines the tension between a company's need for confidentiality and shareholders' right of of access as exlempified in a recent case involving the computer giant HP.

The opportunity to meet with a non-party witness before that witness is deposed can be extremely valuable to a litigant. This article discusses recent cases warning that the substance of such meetings often will be fair game for opposing counsel.

Since 2008, private investment funds, which may have flown under the radar only a few short years ago, are now finding themselves in the cross-hairs of federal and international regulators. At the International Bar Association's 13th Annual International Conference on Private Investment Funds in London, the private investment community revealed their response to the political and regulator spotlight shining on both hedge funds and private equity funds.

The recent public release of federal sentencing data on a judge-specific basis has generated significant media attention. This article points out the flaws in some of the analysis of this new development.

With the ever-expanding use of e-mail, cloud computing, and social networks, vast amounts of private data are increasingly stored online, and thereby entrusted to the custody of third parties. Unfortunately, although our digital footprint has never been more expansive, the legal framework governing the privacy of that information remains sorely outdated, incomplete, and poorly understood. This article provides an overview of the regulatory scheme and reviews recent case law affecting the ability of government and private actors to compel disclosure of e-mail or other electronic user data stored online by entities like Google, Hotmail, Yahoo!, Twitter, Facebook, LinkedIn, or their equivalents.

Courts apply the personal benefit test in tipping cases brought under the "classical" theory of insider trading. Prosecutors and regulators argue that the test does not apply in misappropriation cases and some courts have agreed. But careful examination of the purpose for the test and the requirements of misappropriation liability suggests that the government's opposition is misguided.

This article discusses the Supreme Court's recent decision in Kawashima v. Holder, which resolved a circuit split and held that a conviction for filing a false tax return is a deportable offense. Kawashima provides important guidance to defense counsel advising their alien clients of the immgration consequences of a tax conviction.

Last week, the New York Times ran an editorial entitled “Justice and Open Files.” The gist of the editorial was that prosecutors should provide more and earlier pre-trial discovery to defense lawyers than they currently do in order to make the criminal justice system fairer and more reliable. Discovery in criminal cases traditionally includes all [...]

A recent case from the Eleventh Circuit addresses the intersection of the Fifth Amendment's privilege against self-incrimination and digital evidence. While courts may seek to insure that criminals cannot use encryption techniques to hide digital evidence and defeat otherwise valid subpoenas and warrants, the case examines to what extent a citizen can be expected to cooperate in these efforts through the provision of passwords or decrypted hard drives without waiving his own constitutional protections.

As use of the Internet grows, so too does the prevalence of cyber torts and related litigation. One of the biggest challenges facing potential plaintiffs in these cases often lies in identifying who the defendants are and where they are located. These determinations present distinct if not unique procedural wrinkles and have become something of a proving ground for new approaches to classic problems. This article discusses two recent cases that explore these interesting and important issues.

Despite the increasing importance of internet communication in today's world, there is no comprehensive federal legislation protecting the privacy of electronic information. The principal federal statute regulating users’ privacy is the Stored Communications Act (“SCA”), a part of the Electronic Communications Privacy Act of 1986, a statutory scheme that has been almost universally criticized as a “dense and confusing” mess. This article explores the deficiencies of the SCA and discusses way to improve it.

Historically, courts have been reluctant to overturn a conviction on the grounds of juror misconduct. This article reviews recent decisions and pending matters helping to define the role of the courts in addressing juror misconduct.

Having built his career as a trial lawyer representing prestigious clients fallen into high stakes personal and professional crises, Elkan Abramowitz still feels he’s at the top of his game. His success as a trial lawyer is legendary and for this he credits rigorous pre-trial preparation as key to handling courtroom tension—and effecting victory.

Most American taxpayers would not consider the IRS to be underfunded, let alone the IRS’s need for more resources to be the most serious problem they face. Given the growing “tax gap” (i.e., the amount of all unpaid tax liabilities), however, a persuasive case can be made that the government should invest more [...]

This article addresses the requirement, set forth in 18 U.S.C. § 3506, that U.S. citizens challenging the government's efforts to obtain evidence abroad provide copies of their foreign filings to the Department of Justice. In light of the government's focus on getting records from Swiss banks, the requirements of section 3506, and the possible sanctions for non-compliance, are important considerations for both clients and defense counsel.

Criminal investigations of companies are commonly resolved through deferred prosecution or non-prosecution agreements which allow companies to avoid indictment and trial but impose a number of burdens, including a binding admission of wrongdoing. This article reviews the current use and impact of these agreements in parallel civil litigation.

On July 29, 2011, a federal district court judge ruled that transcripts of Richard M. Nixon's grand jury testimony related to the Watergate scandal--given with the expectation that it would remain secret--should be released to the public. Since the decision the Justice Department has proposed an amendment to Rule 6(e) of the Federal Rules of Criminal Procedure in an attempt to confine a court's discretion to release secret grand jury materials. This article reviews the law of grand jury secrecy and instances in which a federal court may order the release of grand jury records.

60 Minutes recently televised an interview with President Obama in which the President was asked to comment on the lack of criminal prosecutions relating to the financial crisis. In an earlier 60 Minutes piece, Lanny Breuer, the Assistant Attorney General for the Criminal Division of the Department of [...]

The U.S. District Court for the Southern District of New York launched a pilot project aimed at improving pretrial case management of complex civil cases. This article highlights some of the key aspects of the project, which was designed to address concerns pertaining to costs and delays voiced by clients and members of the bar, and impose some proportionality on the time and resources spent by the courts and parties alike.

Although the presumption of innocence is one of the bedrocks of our criminal justice system, quite often suspects are tried and condemned in the court of public opinion before even being charged in a court of law. This article discusses how to deal with the media, both tactically and ethically when a client is in the public eye, in order to rebalance a sometimes tilted playing field.

Under Treasury Department regulations, taxpayers are required to keep records relating to accounts they maintained at foreign financial institutions. Faced with a subpoena for such records, a taxpayer who did not disclose a foreign account on his income tax returns and on FBARs faces a difficult dilemma: producing the records will demonstrate that his previously filed returns were false, while denying that he has the records could subject him to prosecution for failure to keep required records. This article discusses two recent decisions--one out of the Ninth Circuit and one from the United States District Court for the Southern District of Texas--addressing taxpayers' assertion of their rights under the Fifth Amendment in response to such subpoenas.

Managing internal investigations is one of the most important responsibilities of in-house counsel. This article offers suggestions for conducting thorough, and cost-effective, investigations.

This article concerns the increased focus by federal and state regulators on the energy markets, as well as potential competition among regulators in this area.

Extradition laws are of increasing relevance in white collar practice due to the cross-border nature of most business transactions. A related issue is the transfer of foreign citizens convicted in the United States to their home countries to serve their sentence and the real governmental benefits that attend such transfers. This article details the administration of such transfers in and out of the United States by the Justice Department's International Prison Transfer Unit.

New York State recently amended its double jeopardy statute, creating the possibility that prosecutors will pursue state tax charges against defendants previously convicted of federal tax offenses. This article discusses the effect of this new statute and the options available to defense counsel once it takes effect.

On Wednesday, July 13, 2011, Robert J. Anello was interviewed by Lee Pacchia of BloombergLaw on the News Corp hacking scandal. Mr. Anello discussed the intricacies of internal investigations, what this event means for others in the media industry, and the possibility of DOJ and SEC investigations.

This article discusses recently announced plans by the IRS to reopen its Offshore Voluntary Disclosure Program (the "OVDP") giving taxpayers a third "last" chance to come clean with their previously undisclosed offshore accounts.

On Wednesday, November 24, 2010, Robert J. Anello was interviewed on CNBC about the intricacies of determining what insider trading is and what it isn't.

Securities traders are obligated to provide “best execution” to their customers. Knight Securities, a public market making firm, settled charges with the SEC alleging a scheme to overcharge its customers on large securities trades. In SEC v. Pasternak and Leighton, the SEC charged two former executives of Knight with overseeing a scheme to overcharge customers and make excessive profits on numerous institutional orders to buy and sell large blocks of stock, thereby failing to provide best execution. In a recent opinion, the district court rejected the SEC’s charges, holding that the SEC had failed to formulate a viable legal theory, much less prove a violation of the securities laws. The ruling not only clarifies issues surrounding “best execution”; it also underscores the difficulty that companies have, in the present environment, of challenging government claims of wrongdoing.