Publications

09.17.21 | Blog Posts

The U.S. Sentencing Commission’s Inadequate Response To Covid-19

The Insider: White Collar Defense and Securities Enforcement

For the past 18 months, federal courts have grappled with the impact of Covid-19 on sentencing proceedings, and a curious disparity has emerged. On the one hand, anecdotal evidence suggests that federal judges are imposing more lenient sentences in recognition of how the pandemic has made imprisonment harsher and more punitive than in the past. On the other hand, reports available from the U.S. Sentencing Commission tell a different story—at least for now—suggesting that courts have to a great extent ignored the pandemic when imposing sentence. I have written in the past (here and here) about how the body of sentencing law is effectively hidden from public view (as it exists primarily in court transcripts). This dearth of readily accessible sentencing law is particularly problematic during the Covid-19 pandemic, as courts are grappling with novel issues in hundreds of cases. The U.S. Sentencing Commission is uniquely positioned to fill this gap, but so far has largely failed to do so.

Related Lawyers: Brian A. Jacobs, Rachel M. Fleig-Goldstein

09.16.21 | Articles, Books & Journals

Establishing a "Cheek" Defense Through Expert Testimony

New York Law Journal

To obtain a conviction on criminal tax charges, the government must prove the defendant acted “willfully.” In Cheek v. United States, the Supreme Court held that to satisfy this burden the government must “prove that the law imposed a duty on the defendant, that the defendant knew of this duty, and that he voluntarily and intentionally violated that duty.” In this article, “Establishing a Cheek Defense Through Expert Testimony,” I analyze recent Circuit Court decisions rejecting claims that defendants were improperly deprived of their ability to present a Cheek defense. While there may be circumstances in which this can be done through expert testimony, the case law makes clear that defendants face an uphill battle to establish a lack of willfulness through experts.

Related Lawyers: Jeremy H. Temkin, Jorja Knauer

09.13.21 | Blog Posts

Can the Capitol Insurrection Result in Prosecution of Members of Congress?

The Insider: White Collar Defense and Securities Enforcement

On August 30, the U.S. House Select Committee to Investigate the January 6th Attack on the United States Capitol (“Select Committee”) issued requests to various companies to preserve phone records for hundreds of people whose records the committee may want to review. The letters identified records for, among others, current members of Congress, suggesting the Select Committee may issue subpoenas to these companies to obtain personal data for the specified lawmakers. Not surprisingly, news of the preservation requests ruffled some lawmakers’ feathers and prompted questions about the enforceability of any subpoenas the Select Committee may issue. Congressional inquiry, however, may not be lawmakers’ only concern.

Related Lawyers: Robert J. Anello, Jorja Knauer

09.09.21 | Articles, Books & Journals

White-Collar Investigations and Disclosure During Corporate Transaction Due Diligence

New York Law Journal

When a company under government investigation pursues business transactions, such as selling a business or borrowing money, a counterparty will typically seek information about the investigation as part of legal due diligence. As a result, white-collar defense counsel may be called upon by a client to describe the ongoing investigation and assess its merits for the counterparty. In this article, "White-Collar Investigations and Disclosure During Corporate Transaction Due Diligence," we discuss whether, and under what circumstances, such disclosures may be protected from discovery based on the attorney-client privilege and the common interest doctrine.

 

 

Related Lawyers: Elkan Abramowitz, Jonathan S. Sack

08.17.21 | Articles, Books & Journals

Protective Orders and Civil Litigants With Potential Criminal Exposure

New York Law Journal

Civil litigants frequently produce documents and provide testimony pursuant to protective orders with the expectation that the order will prevent future public disclosure of these materials. However, for civil litigants whose conduct has criminal implications, a meaningful risk exists that the materials will find their way into the hands of a government prosecutor. In our latest article, “Protective Orders and Civil Litigants With Potential Criminal Exposure,” we discuss Southern District Judge Alison J. Nathan’s recent decision in United States v. Maxwell, rejecting Ghislaine Maxwell’s attempt to suppress evidence produced under a protective order.

Related Lawyers: Edward M. Spiro, Christopher B. Harwood

08.11.21 | Articles, Books & Journals

Van Buren v. U.S. - A Window Into Criminal Law in the Coney Barrett Era?

New York Law Journal

For armchair prognosticators on the criminal law proclivities of the newly constituted Supreme Court, Justice Barrett’s majority opinion in Van Buren v. United States may provide some clues. In narrowly construing a provision of the Computer Fraud and Abuse Act of 1986 to avoid criminalizing “a breathtaking amount of commonplace computer activity,” the opinion is likely to be welcomed by those concerned about overcriminalization. Only time will tell, but Van Buren suggests that we can expect the Court’s tendency to narrowly interpret statutes to avoid criminalizing large swaths of trivial conduct to continue. We explore this issue in our latest Article: "Van Buren v. U.S. -- A Window Into Criminal Law in the Coney Barrett Era?"

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

07.30.21 | Newsletters

SEC and DOJ Enforcement Actions Aim to Bring SPAC Market Back to Earth

What do space exploration, electric cars, and Lady Gaga’s music label have in common? All three were involved in SPAC transactions this year, and all three transactions caught the attention of Gary Gensler’s SEC. These three actions all show the SEC taking a more aggressive approach to regulation, which may result in significant penalties or the interruption of SPAC mergers, reaching even beyond the Earth’s orbit.

Related Lawyers: Robert J. Anello, Christopher B. Harwood, Brian A. Jacobs, Jeremy H. Temkin, Bronwyn Roantree, Anthony Sampson, Margaret Vasu

07.28.21 | Blog Posts

Will Justice Thomas Bring Consistency to Cannabis Regulation?

The Insider: White Collar Defense and Securities Enforcement

In recent years, the majority of states have enacted laws legalizing some form of marijuana use, with eighteen states and the District of Columbia allowing the recreational use of marijuana, and another eighteen states authorizing the use of marijuana for medicinal purposes.  The federal Controlled Substances Act (the “CSA”), however, continues to classify marijuana as a Schedule I controlled substance, criminalizing virtually all production, sale, and possession of marijuana.

Related Lawyer: Jeremy H. Temkin

07.27.21 | Blog Posts

Investors Are Entitled to Whistleblower Protection From the SEC

The Insider: White Collar Defense and Securities Enforcement

Earlier this month in “Companies Better Not Tread on Whistleblowers’ Right to Report,” I discussed the U.S. Securities and Exchange Commission’s action against Collector’s Coffee, Inc. and its CEO Mykalai Kontilai, and suggested that it might indicate the expanded reach of whistleblower protections under SEC Rule 21F-17(a). This week, a federal judge in New York issued an order in that case, (Securities and Exchange Commission v. Collector’s Coffee, Inc., No. 19 Civ. 4355 (VM)) confirming that Rule 21F-17(a) protects not only whistleblowing employees, but investors as well.

Related Lawyer: Catherine M. Foti

07.15.21 | Blog Posts

Digital Art May Be Next In The SEC’s Crosshairs

The Insider: White Collar Defense and Securities Enforcement

Like many other things, art and collectibles have gone digital. This year has seen explosive growth for NFTs, with NFT sales for 2021 already exceeding $2.5 billion. With the growing market for NFTs comes innovation, most notably the emergence of f-NFTs (“fractional non-fungible tokens”).  Where financial innovation goes, the SEC is bound to follow. F-NFTs are no exception. Although perhaps not intending to rain on the creative parade, in March 2021 comments, SEC Commissioner Hester M. Peirce sounded a note of caution, warning creators of f-NFTs to be careful that they are not creating securities that would be subject to regulation.

Related Lawyer: Robert J. Anello

07.14.21 | Articles, Books & Journals

Will CIC Services Open the Floodgates to Tax Challenges?

New York Law Journal

Under the Anti-Injunction Act, 26 U.S.C. § 7421(a), taxpayers are barred from bringing suits “for the purpose of restraining the assessment or collection of any tax.”  Accordingly, a taxpayer wishing to challenge a tax provision is generally required either to pay the tax and bring a suit seeking a refund in federal district court or dispute an assessment in Tax Court. In this article, “Will CIC Services Open the Floodgates to Tax Challenges,” we analyze the Supreme Court’s recent decision in CIC Services, LLC v. Internal Revenue Service, which unanimously rejected the government’s invocation of the Anti-Injunction Act to preclude a challenge to an IRS Notice requiring both taxpayers and their advisors to disclose information regarding micro-captive insurance transactions.

Related Lawyer: Jeremy H. Temkin

07.09.21 | Blog Posts

Companies Better Not Tread On Whistleblowers’ Right To Report

The Insider: White Collar Defense and Securities Enforcement

Guggenheim Securities, LLC recently was fined $208,912 by the Securities and Exchange Commission for its policies prohibiting employees from contacting regulators without prior approval from the company’s legal or compliance departments.

Related Lawyer: Catherine M. Foti

07.08.21 | Articles, Books & Journals

Congress Requires DOJ To Report on Deferred Prosecution Agreements

New York Law Journal

In the wake of the financial crisis of 2008, federal white-collar criminal enforcement faced harsh criticism.  One of the chief targets of critics was the corporate Deferred Prosecution Agreement (DPA), under which a company is charged with criminal wrongdoing but not required to enter a guilty plea.  In this article, “Congress Requires DOJ to Report on Deferred Prosecution Agreements,” we discuss the practical and policy implications of a little noticed new provision which signals Congress’s heightened interest in the use of DPAs as an enforcement tool.

Related Lawyers: Elkan Abramowitz, Jonathan S. Sack

06.28.21 | Articles, Books & Journals

A Warning About ‘Upjohn’ Warnings: A Word of Caution for Individual Employees

New York Law Journal

When conducting an employee interview as part of an internal investigation, corporate counsel typically warns the employee that counsel represents the employer and not the employee—but what if corporate counsel does not provide such an Upjohn warning? In this article, we discuss the current state of the law as reflected in cases in which employees have challenged the use of statements made to corporate counsel, and observe that the remedy afforded to an employee who did not receive an Upjohn warning is often lacking.

Related Lawyers: Robert M. Radick, Rusty Feldman

06.23.21 | Newsletters

SEC Upends Classification of SPAC-Issued Stock Warrants

As explained elsewhere, the Special-Purpose Acquisition Company (“SPAC”) has been the subject of significant market activity, with the use of SPACs skyrocketing for several months before recently falling back to Earth. Despite the recent dip in SPAC use, according to data from Dealogic, U.S. SPACs had raised over $100 billion in 2021 alone, with the value of SPAC mergers surpassing $260 billion. In recent months, however, the number of SPACs going public has dropped precipitously, dropping from 116 listings in March down to just 18 in April and 19 in May.  

Related Lawyers: Robert J. Anello, Brian A. Jacobs, Anthony Sampson

06.16.21 | Blog Posts

Eleventh Circuit En Banc Ruling Fails To Resolve Key Issue Regarding Victims’ Right To Confer With Prosecutors

The Insider: White Collar Defense and Securities Enforcement

The Crime Victims’ Rights Act gives “crime victims” a right to “confer” with government attorneys and to be “reasonably heard” in the course of federal criminal prosecutions. The Act calls on federal courts to “ensure” that victims are “afforded” these rights. (See Abramowitz and Sack, “Victims’ Rights and White Collar Defense,” New York Law Journal (July 11, 2017)). An important procedural issue has arisen under the CVRA: when does a victim’s right to confer arise – before charges are filed in court, or only afterward.

Related Lawyer: Jonathan S. Sack

06.15.21 | Articles, Books & Journals

Limited-Scope Representations in Civil Cases

New York Law Journal

Traditionally, when an attorney appears on behalf of a client in a matter, federal courts have required that the attorney represent the client in all respects. In civil cases, however, courts have begun to recognize the value of limited-scope representations—i.e., representations when an attorney represents a client for only a portion of a case. In this article, we analyze Judge Jed S. Rakoff’s recent decision in Villar v. City of New York where he authorized a limited-scope representation to allow an attorney to appear solely to assist the pro se plaintiff in settlement negotiations.

Related Lawyers: Edward M. Spiro, Christopher B. Harwood

06.09.21 | Articles, Books & Journals

Hey SIRI, Does the Fifth Amendment Protect My Passcode?

New York Law Journal

The application of the Fifth Amendment to law enforcement demands for cellphone passcodes has developed into a constitutional quagmire for the lower courts. With the Supreme Court resisting opportunities for specific guidance, right now the application of the right against self-incrimination to this overwhelmingly important modern technology depends heavily on the state or federal jurisdiction where a person is located. We explore the issue in this article: “Hey SIRI, Does the Fifth Amendment Protect My Passcode?”

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

05.26.21 | Blog Posts

Crypto Goes Corporate: Litigation Sure To Follow

The Insider: White Collar Defense and Securities Enforcement

Until recently, cryptocurrencies appeared to be far from the kind of institutionally sound investments that would be attractive to CFOs looking to diversify a corporate portfolio.  Once seen as gimmicks for unsophisticated retail investors, many of whom purchased cryptocurrencies based on obscure internet nomenclature, nonsensical children’s songs, or even notable hip-hop artists, few would expect the notoriously volatile electronic currencies to find their way into corporate treasuries.  The joke appears to be over, or perhaps is just beginning to turn stale.  As executives have sought to stash excess corporate cash into electronic currencies, the novelty assets are now an increasingly popular option to add to corporate ledgers.  With this expansion into uncharted territory, however, comes additional risks, from both private litigation and regulatory scrutiny.  Likewise, as with any novel asset, CFOs must balance their desire to invest creatively with the concerns of wary shareholders.  On these fronts, cryptocurrencies present potential pitfalls for those charged with charting companies through modern-day legal and regulatory shoals.

Related Lawyers: Robert J. Anello, Anthony Sampson

05.20.21 | Articles, Books & Journals

Non-Willful FBAR Penalties: A (Temporary) Reprieve for Taxpayers?

New York Law Journal

For over a dozen years, the IRS and the DOJ have targeted the use of offshore accounts to evade U.S. income taxes. Last month, in testimony before Congress, IRS Commissioner Charles P. Rettig made it clear that this crackdown on offshore tax evasion will continue unabated. While most of the attention in this area focuses on the risk of criminal prosecution and substantial financial penalties faced by taxpayers who willfully violate their FBAR obligations, some FBAR violations are due to negligence or a good faith mistake, as opposed to willful conduct. In this article, we discuss the Ninth Circuit’s recent decision in United States v. Boyd, in which a split panel rejected the IRS’s imposition of non-willful FBAR penalties on a per-account basis, and instead limited the IRS to imposing a single $10,000 penalty per year. This important decision provides a useful roadmap for practitioners representing taxpayers as additional Courts of Appeal weigh in on the scope of non-willful FBAR penalties in the coming months.

Related Lawyer: Jeremy H. Temkin


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