Publications

02.15.19 | Blog Posts

Peremptories And Prejudice: The Striking Role Of Employment Status In Jury Selection

The Insider: White Collar Defense and Securities Enforcement

It is a truth universally acknowledged, that a trial lawyer in possession of limited information about prospective jurors, may exercise strikes based on a juror’s employment status. Criminal prosecutors may strike jurors who are unemployed, in the belief that such jurors may be less socially connected, less accustomed to following rules, less experienced in making serious decisions (such as voting for conviction), and thereby potentially biased against the government and in favor of the defendant. Criminal defense lawyers, meanwhile, may strike jurors who are employed, for the inverse reasons. And in civil cases, as one commentator wrote, “[j]ury consultants consistently report that,” among other things, “long-term, unemployed people . . . tend to favor the plaintiff’s position.” Employment status can be an entirely reasonable reason for a trial lawyer to strike a prospective juror. At the same time, however, employment status can at times be misused by trial lawyers as a pretext to strike a juror when the real reason is the juror’s membership in a so-called cognizable group, such as a racial minority. In order to distinguish between a permissible and impermissible strike, judges should engage in extraordinarily careful fact-finding and analysis, as the stakes for both the lawyers and the parties run high. [...]

Related Lawyer: Brian A. Jacobs

02.14.19 | Articles

White-Collar Enforcement After Two Years of Trump

New York Law Journal

The halfway point of President Trump’s term offers an opportunity to examine and assess the impact of his administration on business-related prosecutions. In this article, we discuss the government’s shift in enforcement priorities, which focus on violent crimes, opioid cases, and most notably, immigration violations. We also highlight the decline not only in the number of traditional white-collar cases brought, but also in the amounts of fines and penalties imposed. Despite these numbers, however, the Trump Justice Department has remained aggressive and creative in its pursuit of individual wrongdoers in certain business-related areas, particularly in international corruption and foreign bribery.

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

01.23.19 | Blog Posts

The Harmless Error Standard on a Silver Platter

The Insider: White Collar Defense and Securities Enforcement

In United States v. Stewart, in a 2-1 decision, the Second Circuit vacated defendant Sean Stewart’s insider-trading conviction, holding that the district court erroneously excluded a key piece of impeachment evidence and that this error could not be excused as harmless. Although the opinion focused on the admissibility of evidence that impeaches hearsay statements, the majority’s defense-friendly application of the harmless error standard could have a greater impact in future criminal appeals. [...]

Related Lawyer: Brian A. Jacobs

01.17.19 | Articles

FBAR Penalties: Relief for Taxpayers?

New York Law Journal

By statute, taxpayers who fail to disclose accounts on a Report of Foreign Bank and Financial Account, commonly referred to as an FBAR, are subject to a maximum penalty of up to 50% of the funds in the undisclosed accounts. However, two recent district court opinions have held that the applicable regulations cap the FBAR penalty at $100,000 per undisclosed account. In this article, we analyze four recent cases that have split on the maximum permissible FBAR penalty and the implications of this debate.

Related Lawyer: Jeremy H. Temkin

01.08.19 | Articles

Government Misconduct in a Grand Jury Investigation: Is There a Remedy?

New York Law Journal

In cases of misconduct by the government, federal law strongly favors narrowly tailored remedies in criminal cases. The ultimate sanction, dismissal of an indictment, is reserved for the most extreme wrongdoing. In this article, we discuss the Second Circuit’s recent decision in United States v. Walters, which affirmed an insider trading conviction notwithstanding undisputed, improper leaks to news reporters by an FBI agent prior to indictment.  

Related Lawyers: Elkan Abramowitz, Jonathan S. Sack

12.19.18 | Blog Posts

Naughty or Nice: Is Trump's Hint of a Gift of a Pardon to Manafort Obstruction of Justice?

The Insider: White Collar Defense and Securities Enforcement

According to various media reports, President Trump’s Christmas list may include the gift of a pardon to his former campaign chairman, Paul Manafort. Many critics claim that the mere suggestion of a pardon to Manafort amounts to an obstruction of justice. The law on whether and when the nation’s chief law enforcer can be said to engage in obstruction is unsettled, although what is clear is that the president’s constitutional authority is not limitless. Other presidents have exercised their absolute power to pardon in questionable ways, but the question on everyone’s mind lately is whether Trump’s dangle of a pardon to Manafort, as distinguished from the act of pardoning, may constitute an obstructionist act. [...]

Related Lawyer: Robert J. Anello

12.17.18 | Articles

Specific Jurisdiction Through the Lens of New York Activity of Foreign Banks

In the past few years, the Supreme Court has issued a number of decisions emphasizing that the Constitution’s limits on personal jurisdiction have real teeth. In this article, we discuss Chief Judge Colleen McMahon’s recent decision in Nike v. Wu, which applied certain general principles of specific jurisdiction to the New York activities of a group of foreign banks against whom discovery was sought in the Southern District of New York in connection with a judgment enforcement proceeding.

Related Lawyers: Edward M. Spiro

12.04.18 | Articles

1MDB Scandal Tests Justice Department on FCPA and Corporate Prosecutions

New York Law Journal

The Justice Department’s prosecution of the 1Malaysia Development Berhad (1MDB) case illustrates how despite early predictions otherwise, Trump administration enforcement of the Foreign Corrupt Practices Act is alive and well. In this article, we discuss the 1MDB case and examine the extent to which the Justice Department will adhere to the Administration’s declared intent not to “employ the hammer of criminal enforcement to extract unfair settlements” from corporations where there is cooperation and evidence of a strong compliance structure.

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

11.21.18 | Articles

How Institutional Dynamics Have Shaped Insider Trading Law

The Review of Securities & Commodities Regulation

The past decade has brought multiple significant decisions in insider trading law, but has not substantially clarified the line between legal and illegal trading. In this article, we address how some degree of this lack of clarity can be traced to certain institutional dynamics at play in the courts issuing the relevant decisions. In particular, we look at both the Second Circuit’s uniquely strong preference for avoiding en banc review and the Supreme Court’s general preference for narrow decisions, and assess the ways in which these dynamics have shaped and may continue to shape insider trading jurisprudence.

Related Lawyer: Brian A. Jacobs

11.19.18 | Articles

Constitutional Questions in Corporate Internal Investigations

New York Law Journal

In recent years, the Department of Justice has made clear that when companies seek leniency they are expected to turn over incriminating information about current and former employees. In this article, we discuss recent criminal prosecutions in the SDNY and District of New Jersey in which the defendants claimed violations of their constitutional rights because corporate internal investigations became intertwined with federal criminal investigations.

Related Lawyers: Elkan Abramowitz, Jonathan S. Sack

11.15.18 | Articles

What Will Justice Kavanaugh Mean for Criminal Tax Defendants?

New York Law Journal

Notwithstanding the controversy surrounding Brett Kavanaugh’s recent appointment to the Supreme Court, practitioners need to consider how he will impact the Court’s jurisprudence for many years to come. Regardless of what they think about Justice Kavanaugh’s record on other issues, criminal defense lawyers are likely to view his approach to the imposition of sentencing as somewhat of a mixed bag. In this article, we note that while Justice Kavanaugh has articulated concerns that the post-Booker regime has brought too much unpredictability to sentencing, his decisions have demonstrated deference to district judges, who frequently give defendants convicted of tax offenses the benefit of substantial downward variances.

Related Lawyer: Jeremy H. Temkin

10.15.18 | Blog Posts

Rethinking Corporate Monitors: DOJ Tells Companies to Mind Their Own Business

The Insider: White Collar Defense and Securities Enforcement

Since about the early 2000s, corporate monitors have become a go-to weapon for the Justice Department in its battle against business crime. Imposition of such monitors often results in the disruption of companies’ activities and expenditures of millions of corporate dollars – that might otherwise go to benefit shareholders. In line with its more business-friendly approach, Attorney General Jeff Sessions’ Department of Justice has signaled a retreat from such intrusion on businesses’ operations. Last Friday, Brian A. Benczkowski, the Assistant Attorney General in charge of the Justice Department’s Criminal Division, delivered a speech at New York University School of Law revealing this change in the Department’s approach to the use of corporate monitors. [...]

Related Lawyer: Robert J. Anello

10.15.18 | Articles

Privacy Trumps Right of Access to Judicial Documents in ‘Giuffre v. Maxwell’

New York Law Journal

Southern District Judge Robert W. Sweet’s recent decision in Giuffre v. Maxwell addresses the press’s application to unseal potentially salacious documents covered by a protective order in an action concerning allegations of sexual abuse. In this article, we discuss Judge Sweet’s analysis of the law in the Second Circuit on protective orders and the sealing of “judicial documents,” and the tension between the public’s right of access and interest in transparency in the legal system and the individual’s right to privacy.

Related Lawyers: , Edward M. Spiro

10.11.18 | Articles

The Vanishing Federal Criminal Trial

New York Law Journal

Contrary to Hollywood’s fictionalized vision of our criminal justice system, a recent report from the National Association for Criminal Defense Lawyers confirms what many have recognized: trials are an endangered species. In this article, we discuss how the "trial penalty"-- the difference between the result a defendant may obtain by pleading guilty and the far harsher result that same defendant may receive if found guilty after trial -- has skewed our criminal justice system.   

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

10.04.18 | Articles

Hidden 'Time' Bombs in White-Collar Criminal Matters

Business Crimes Bulletin

Congress has armed the government with an arsenal of weapons to extend limitations periods in white-collar cases that prosecutors have used in increasingly creative ways that are often difficult for defendants to predict. In this article, we examine the various tools at the government’s disposal, including mutual legal assistance treaties in cross-border matters; FIRREA’s ten-year statute of limitations for frauds “affecting” financial institutions; criminal conspiracy charges; tax crimes; and war-time extensions. We highlight a recent decision in United States v. Bogucki, a wire fraud prosecution, which is a prime example of how the government may lie in wait before launching hidden “time” bombs to lengthen the applicable limitations period.

Related Lawyers: Robert J. Anello, Justin Roller

09.26.18 | Blog Posts

Corporate Health Care Fraud Prosecutions in the Trump Administration: It Ain’t Over Til It’s Over

The Insider: White Collar Defense and Securities Enforcement

As we near the two-year point since the election of Donald J. Trump to the White House, the topic of white collar crime continues to dominate the public conversation – but the conversation in fact consists of two distinctly separate streams of dialogue. The first, and plainly more prominent, relates to the conduct of the Trump administration itself. The Special Counsel investigation regarding Russian intervention in the 2016 election, the prosecution of Michael Cohen for violating campaign finance laws, Paul Manafort’s decision to cooperate with the Special Counsel following his trial conviction on counts of bank fraud and tax fraud, and the investigation of President Trump for a host of potential crimes – all of these matters have rightfully earned headlines and generated tremendous public attention. But a second stream of dialogue, while less present in the mainstream media, is nonetheless of significant importance as well. Indeed, it is this second topic – namely, how aggressively the Trump Administration’s Department of Justice will pursue investigations into white collar crime in general, and health care fraud in particular – that is understandably a subject of much import to the corporations and individuals whose conduct may be the focus of government scrutiny. [...]

Related Lawyer: Robert M. Radick

09.20.18 | Articles

‘United States v. Sertich’: Affirmative Obligations of Taxpayers

New York Law Journal

Under the Internal Revenue Code, employers are responsible for accounting for and paying over to the IRS taxes that they withhold from their employees. In United States v. Sertich, the United States Court of Appeals for the Fifth Circuit held that an employer who willfully fails either to account for or to pay over such taxes commits a felony under 26 U.S.C. § 7202. In this article, we address Sertich’s holding that, while Section 7202 lists a series of acts using the conjunctive “and,” the statute imposes mandatory obligations, all of which must be affirmatively fulfilled. Sertich is also noteworthy in its discussion of the government’s heightened burden of proving willfulness in criminal tax cases.   

Related Lawyer: Jeremy H. Temkin

09.20.18 | Articles

‘Obey-the‑Law’ Injunctions: Is Time Running Out for the SEC?

New York Law Journal

SEC enforcement actions are subject to a five-year statute of limitations on civil penalties, but the SEC has often been able to enlarge its time for bringing an action by seeking equitable relief, notably, “obey-the-law” injunctions and disgorgement. In recent years, however, courts have begun to curtail this de facto enlargement of the limitations period. In Kokesh v. SEC, the Supreme Court held that disgorgement is a penalty subject to a five-year statute of limitations. Following Kokesh, courts have begun to address another important question: whether so-called obey-the-law injunctions constitute a penalty subject to the five-year limitations period. In our latest article, we discuss a recent decision of Judge Nicholas Garaufis in SEC v. Cohen, which held that an obey-the-law injunction, like disgorgement, is a penalty subject to a five-year limitations period. 

Related Lawyers: Elkan Abramowitz, Jonathan S. Sack

8/21/2018 | Articles

In 'Ambac,' Judge Attempts to Make Sense of New York's Economic Loss Rule

New York Law Journal

New York’s economic loss rule, which acts as a check on asserting tort claims for purely economic damages, has long confounded practitioners. The rule, intended to preserve the distinction between contract and tort law and to protect defendants from disproportionate damages, has its most straightforward application in products liability and construction cases, but has been applied in a broad array of cases. In this article, we discuss a recent SDNY decision by Judge William H. Pauley III in Ambac v. U.S. Bank, which arises in the context of an RMBS case, but provides an interesting and informative lens for viewing the interplay between contract and breach of fiduciary duty claims under New York law.

Related Lawyers: Edward M. Spiro

8/16/2018 | Articles

Life After 'Booker': Insights From Federal Sentencing Data

New York Law Journal

Following the Supreme Court’s landmark 2005 decision in United States v. Booker, which transformed the United States Sentencing Guidelines from mandatory to advisory, the question of how sentencing judges would exercise their restored discretion has been a matter of great interest. In this article, we highlight insights from recent sentencing statistics and conclude that the data support the continuation of welcome trends: district courts exercising their restored discretion to tailor sentences individually, with increased regional differences and courts in the Second Circuit taking a leading role in mitigating the excessive harshness of the fraud guidelines.

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


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