Publications

02.20.18 | Blog Posts

Something Rotten in Denmark? The International Criminalization of Drug Advertising

The Insider: White Collar Defense and Securities Enforcement

Sometimes, when it comes to drafting posts for The Insider, a little digging can turn up remarkable results. This week’s post demonstrates the point, as it originates from short news stories that appeared recently in two journals that may not be so well known: Medwatch, based in Copenhagen, and Stat, headquartered in Boston. Both sites cover the pharmaceutical and health care industries, and both deserve considerable appreciation, because what they have uncovered is alarming and even disturbing: in the pharmaceutical industry, despite a recent increase in legal protections, you can still go to prison for posting truthful statements on social media about government-approved prescription medications. [...]

Related Lawyer: Robert M. Radick

02.20.18 | Articles

You Can’t Sue the Judge, or Can You?

New York Law Journal

Although judges are sometimes attacked in public comments outside the courtroom, those of us who practice regularly before the courts operate on the assumption that judges are broadly immune from attack within the legal system. In this article, we analyze a recent decision in Zappin v. Cooper by Southern District Judge Katherine Polk Failla, discussing a surprising gap in judicial immunity accorded to New York state judges, and ultimately dismissing the claims against a judge on alternative grounds.

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

02.08.18 | Articles

White Collar Criminal Enforcement in the Era of Trump

New York Law Journal

The Trump administration is emphasizing individual rather than corporate liability in white collar investigations and has shifted the focus of criminal law enforcement toward some non-white collar priorities. In this article, we discuss how the move away from corporate criminal liability has been manifest in policy decisions by the Justice Department, highlight the transition of its staff, and discuss whether this shift in priorities is likely to result in a decrease in white collar investigations and prosecutions.

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

01.18.18 | Articles

The Next Frontier: Civil Penalties for Undisclosed Offshore Accounts

New York Law Journal

Over the last decade, the government’s pursuit of offshore tax evasion has included criminal cases against taxpayers and their enablers, Deferred Prosecution and Non-Prosecution Agreements with foreign financial institutions, and four Offshore Voluntary Disclosure Programs offered by the IRS. This article discusses an often overlooked fourth prong of the government’s offshore enforcement efforts: the IRS’s imposition of significant civil penalties against taxpayers who were fortunate enough to avoid criminal prosecution. The article also reviews recent cases addressing the IRS’s burden of establishing that a taxpayer’s failure to disclose offshore accounts was willful and the hurdles facing taxpayers and their lawyers seeking to avoid the steep penalties imposed.

Related Lawyer: Jeremy H. Temkin

01.10.18 | Blog Posts

Bitcoin Buyers Beware: The IRS Has Your Number

The Insider: White Collar Defense and Securities Enforcement

As the number and variety of cryptocurrencies on the market continue to grow, so does the scrutiny by government regulators. As noted in my prior post, the Federal Bureau of Investigation, Securities and Exchange Commission, and the Commodities Futures Trading Commission have developed units focused on cyber-threats, as have numerous foreign governments. Most recently, the Internal Revenue Service has joined the mix by investigating the ways in which taxpayers do – and more importantly, do not – report virtual currency transactions. Now Congress has gotten in on the action by amending the tax code to close a loophole that allowed cryptocurrency owners to exchange digital currencies without reporting the transactions on their tax returns. 2018 is likely to be a year of uncertainty for owners of cryptocurrencies, which may account in part for the double digit decline in the value of Bitcoins at the end of December. [...]

Related Lawyer: Robert J. Anello

01.04.18 | Articles

Recent Developments in the Prosecution of Corporations

New York Law Journal

The prosecution of corporations remains a contentious issue in white-collar criminal enforcement. In this article, we discuss the DOJ’s new FCPA Corporate Enforcement Policy and District of Massachusetts Judge William Young’s rejection of a corporate guilty plea in the Aegerion Pharmaceuticals case – two developments that highlight the significance of prosecutorial discretion in investigations of corporate misconduct.

Related Lawyers: Elkan Abramowitz, Jonathan S. Sack

12.21.17 | Articles

Challenges in Successfully Asserting the Fifth Amendment

New York Law Journal

Sorting through when, how and to what extent a deponent in civil litigation may invoke the Fifth Amendment presents both substantive and procedural questions. In this article, we discuss the recent decision in Securities and Exchange Commission (SEC) v. Pence in which the court’s particularized analysis of the Fifth Amendment issues, as well as its procedural considerations, provide useful guidance for counsel whose clients seek to invoke or limit the invocation of the privilege in civil litigation.

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

12.20.17 | Blog Posts

An Unexpected Critique of the Grand Jury Subpoena Power

The Insider: White Collar Defense and Securities Enforcement

On November 29, 2017, the Supreme Court heard oral argument in Carpenter v. United States, which presents the question of whether the federal government must, under the Fourth Amendment, obtain a warrant before getting historical cell-site location records from cell phone service providers. Broadly speaking, the government argued that it did not need to obtain a warrant because individuals do not have a reasonable expectation of privacy in business records held by third parties (in this case, the cell service providers). Carpenter countered that the warrantless collection of data revealing people’s long-term movements so violates reasonable expectations of privacy that a warrant is required, notwithstanding that the data is possessed by third parties. [...]

Related Lawyer: Brian A. Jacobs

12.05.17 | Articles

Government Makes Manafort’s Lawyer A Key Witness Against Him – Ho-hum?

New York Law Journal

Mostly lost among the headlines regarding the charges brought by Special Counsel Robert Mueller against former Trump campaign chairman Paul Manafort was the simultaneous release of a court opinion compelling one of Manafort’s own lawyers to testify against him in the grand jury. In this article, we trace the history of the bar’s failed efforts to restrict the authority of federal prosecutors to issue this troubling type of subpoena, and discuss the D.C. district court’s decision affirming that authority in the Manafort case.

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

11.30.17 | Blog Posts

Wells Fargo Litigation Highlights Directors’ Obligation to Establish and Monitor Corporate Compliance

The Insider: White Collar Defense and Securities Enforcement

Fallout from the unauthorized opening of bank and credit card accounts at Wells Fargo has been immense. Thousands of employees, including the CEO, have lost their jobs, and several long-serving directors were forced to resign. The bank has thus far paid about $185 million in penalties and reportedly has reached and received preliminary approval for a proposed $142 million class-action settlement to compensate customers for accounts opened without their permission. Wells Fargo still faces ongoing investigations by the Department of Justice and Securities and Exchange Commission. [...]

Related Lawyer: Jonathan S. Sack

11.16.17 | Articles

Defining “Collected Proceeds” Under the IRS’s Whistleblower Program

New York Law Journal

Information from whistleblowers has generated billions of dollars in revenues for the IRS and hundreds of millions of dollars for whistleblowers. This article discusses Whistleblower 21276-13w v. Commissioner of Internal Revenue, in which the United States Court of Appeals for the D.C. Circuit will review the Tax Court’s determination that awards should be based on the entire amount the government recovers based on a whistleblower’s information. While the IRS has argued that awards should be limited to amounts recovered under the Internal Revenue Code, others worry that excluding recoveries under other statutes could hamper the IRS’s enforcement efforts.

Related Lawyer: Jeremy H. Temkin

11.08.17 | Articles

The Impact of Salman v. United States on Downstream Tippee Prosecutions

The Review of Securities & Commodities Regulation

In Salman v. United States, the Supreme Court held that a tipper receives a personal benefit sufficient to establish illegal insider trading when the tipper makes a gift of confidential information to a trading relative or friend. Salman did not address, however, the question of what level of knowledge a downstream tippee must possess of the personal benefit the tipper received in order to be held liable for insider trading. In this article, we address how district courts have analyzed the question of what downstream tippees must know to be held liable for insider trading after Salman and Salman’s continued impact on this question going forward.

Related Lawyers: Brian A. Jacobs, Priya Raghavan

11.08.17 | Articles

New-Wave Legal Challenges for Bitcoin and Other Cryptocurrencies

Business Crimes Bulletin

The cryptocurrency boom has been met with a fresh wave of regulatory and enforcement efforts by the SEC, DOJ, and beyond. Although these regulatory efforts are intended to address concerns about cryptocurrencies being subject to fraud and manipulation, or being used for money laundering, the agencies' responses complicate the growing use of these new technologies. In this article, we discuss the SEC’s crack down on Initial Coin Offerings, securities fraud liability implications, anti-money laundering efforts with respect to bitcoin and cryptocurrency exchanges, and the international response to the cryptocurrency boom.

Related Lawyers: Robert J. Anello, Christina Lee

11.07.17 | Articles

Limits on the Scope of Honest Services Fraud

New York Law Journal

In recent public corruption cases, courts have addressed one of the most thorny concepts in white-collar criminal law – the scope of honest services mail and wire fraud. In this article, we discuss the Supreme Court’s McDonnell v. United States decision and the decision’s impact on several high-profile prosecutions of New York State politicians. These cases illustrate the continuing challenge of articulating limits on the scope of honest services fraud.

Related Lawyers: Elkan Abramowitz, Jonathan S. Sack

11.01.17 | Blog Posts

Let the Cyber Wars Begin: Federal Regulators Prepare Their Arsenal

The Insider: White Collar Defense and Securities Enforcement

Federal agencies have begun arming themselves for war against cybercrime. By the nanosecond, the ubiquitous Internet and related technology offer endless opportunities for wrongdoing. Notorious Russian hackers meddled in companies that manufactured and sold voter registration software and voting equipment to influence last year’s Presidential election. In September 2017, credit reporting company Equifax announced that sensitive financial data of over 143 million consumers had been hacked, exposing customers to identity theft. A Brooklyn man has been sued for operating a bitcoin Ponzi scheme to acquire $600,000 in unregistered fraudulent investments. The share prices of publicly traded companies have been manipulated through fake news shared and tweeted on social media. The speed of online innovation and the increase of online engagement makes it increasingly difficult to keep track of the latest digital developments, let alone any potential misuse of such technology. The annual cost of global cybercrime is predicted to double from $3 trillion in 2015 to $6 trillion in 2021. In response, federal regulators have started new units and initiatives to combat misconduct in the cyber world. [...]

Related Lawyer: Robert J. Anello

10.23.17 | Blog Posts

The Role of Publicity in Sentencing

The Insider: White Collar Defense and Securities Enforcement

Should defendants in cases that attract press coverage be given longer sentences than defendants in cases that pass unnoticed? The knee jerk response of anyone familiar with the basic principle of equality under the law would likely be a resounding “no.” And yet, as some recent cases have starkly demonstrated, courts can and do consider a defendant’s level of notoriety as a factor weighing in favor of harsher punishment. [...]

Related Lawyer: Brian A. Jacobs

10.19.17 | Blog Posts

Using Techniques Honed Prosecuting Gangs to Investigate Wrongdoing in the Commodities Markets

The Insider: White Collar Defense and Securities Enforcement

At New York University last month, James McDonald, Director of Enforcement of the Commodity Futures Trading Commission (“CFTC”), announced the CFTC’s publication of an “Updated Advisory on Self Reporting and Cooperation” (“Updated Advisory”). The Updated Advisory supplemented two January 2017 Enforcement Advisories, by “providing additional information regarding voluntary disclosures and the substantial credit companies and individuals can expect from the [CFTC] if they voluntarily disclose misconduct and fully cooperate with the [CFTC’s] investigation.” The January 2017 Advisories, entitled “Cooperation Factors in Enforcement Division Sanction Recommendations for Companies” and “Cooperation Factors in Sanction Recommendations for Individuals” had detailed factors that the Enforcement Division may consider to assess the quality and value of cooperation. But, they offered little insight about precisely what is required to obtain mitigation credit and what companies and individuals who meet the requirements can expect. The Updated Advisory was intended to provide “greater transparency” about what the Enforcement Division requires and what companies and individuals who self-report, cooperate, and remediate can expect. [...]

Related Lawyer: Catherine M. Foti

10.17.17 | Articles

At the Intersection of Section 1782 Subpoenas and Personal Jurisdiction

New York Law Journal

In the past few years, the U.S. Supreme Court has been remaking the landscape of personal jurisdiction, generally imposing more exacting standards for the assertion of both general and specific jurisdiction. In this article, we discuss the recent decision in Australia and New Zealand Banking Group v. APR Energy Holding, which examines the question of what jurisdictional contacts are necessary to obtain discovery from a nonparty through a subpoena served pursuant to 28 U.S.C. § 1782.

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

10.03.17 | Articles

Proposals for a Comprehensive Federal Conviction Expungement Law

New York Law Journal

Despite years or even decades of law abiding conduct, individuals with a criminal record face extraordinary hurdles in rebuilding their lives because of the significant collateral consequences of their conviction. In the past decade, many state lawmakers have enacted laws providing for expungement or sealing remedies. At the same time, federal legislation has taken a step backwards. In this article, we discuss judicial efforts to address this problem, which federal judges acknowledge requires a solution by Congress.

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

09.21.17 | Articles

Lawyers: Blow the Whistle at Your Own Risk

New York Law Journal

Over a decade after the IRS’s Whistleblower Office was established, whistleblowing is alive and well. As the number of claims increases, so does the likelihood that attorneys will find themselves in an ethical tangle as they consider whether they can pursue monetary awards for reporting malfeasance by their clients. This article discusses recent decisions addressing the ethical issues that potential attorney-whistleblowers need to consider in deciding whether to pursue remuneration for blowing the whistle on their current or former clients.

Related Lawyer: Jeremy H. Temkin


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