Publications

01.21.20 | Blog Posts

Title Fight: Blaszczak (18) v. Dirks (15)

The Insider: White Collar Defense and Securities Enforcement

The day before New Year’s Eve, the Second Circuit issued a split decision in United States v. Blaszczak, ---F.3d ----, 2019 WL 7289753 (2d Cir. Dec. 30, 2019), holding, among other things, that the “personal benefit” test the Supreme Court announced in Dirks v. SEC, 463 U.S. 646 (1983) for insider trading cases charged under Title 15 does not apply to insider trading cases charged under the Title 18.* Much can and will be written about Blaszczak. This post, however, engages in a close reading of one important sentence in Blaszczak that purports to describe and to quote from Dirks, and assesses whether Dirks actually says what the Second Circuit suggests. To the extent Blaszczak misconstrues Dirks—a binding precedent—there is reason to question whether Blaszczak will withstand further scrutiny, or be followed by other courts. [...]

Related Lawyer: Brian A. Jacobs

01.16.20 | Articles, Books & Journals

Two Years Later: Have Defendants Benefited from 'Marinello'?

New York Law Journal

The Supreme Court’s March 2018 decision in Marinello v. United States was widely seen as a potentially significant limitation on the government’s ability to prosecute endeavors to obstruct the Internal Revenue Service under 26 U.S.C. § 7212(a). In this article, I analyze the extent to which defendants have – and have not – obtained relief under Marinello and conclude that, while the decision has been of limited value to defendants challenging convictions in cases tried before Marinello, its biggest impact may be the government’s reluctance to test § 7212(a)’s outer limits in charging decisions going forward.

Related Lawyer: Jeremy H. Temkin

01.08.20 | Blog Posts

Blindfold Removed from Justice in State Criminal Cases in 2020

The Insider: White Collar Defense and Securities Enforcement

2020 heralds significant and welcome changes in state criminal practice in New York. On April 1, 2019, New York State legislators passed sweeping criminal justice reform legislation altering the landscape for defendants accused of a crime in New York. Of the reforms which went into effect in the new year, the most significant for the white-collar practitioner are changes to the discovery requirements compelling the government to share information with an accused well in advance of trial. Lessening restrictions imposed on suspects waiting for trial, also will have an impact on defendants charged with non-violent white-collar crimes. [...]

Related Lawyer: Robert J. Anello

01.06.20 | Articles, Books & Journals

Challenge to SEC’s Disgorgement Authority Reaches Supreme Court

Business Crimes Bulletin

Since the 1970s, disgorgement of ill-gotten gains has been a mainstay of the SEC’s enforcement program. Although no statute expressly authorizes the SEC to obtain disgorgement in civil enforcement actions, courts routinely award disgorgement to the SEC as a component of authorized “equitable” remedies. The Supreme Court’s 2017 decision in Kokesh v. SEC, however, characterized SEC disgorgement as a “penalty” rather than an equitable remedy, casting doubt on the SEC’s disgorgement authority in civil enforcement actions. In this article, we discuss the potential implications of the Supreme Court’s recent grant of certiorari in Liu v. Securities and Exchange Commission, a case that will clarify whether disgorgement remains available to the SEC in civil actions to enforce federal securities laws. 

Related Lawyers: Jodi Misher Peikin, Jacob W. Mermelstein

01.03.20 | Articles, Books & Journals

A Bridge Too Far? Federalism and the ‘Bridgegate’ Prosecution

New York Law Journal

In white-collar criminal law, principles of federalism have influenced the Supreme Court’s interpretation of the mail and wire fraud statutes, particularly in federal prosecutions of state and local officials. In this article, we discuss an appeal now before the Supreme Court arising from the politically-motivated closure of traffic lanes in 2013 on the George Washington Bridge. The arguments of both sides touch on the federalism concerns raised in earlier Supreme Court decisions. We hope you find the article of interest. 

Related Lawyers: Elkan Abramowitz, Jonathan S. Sack

12.17.19 | Articles, Books & Journals

Personal Jurisdiction Requirements In FLSA Collective Actions

New York Law Journal

The Fair Labor Standards Act (FLSA) provides a mechanism for employees to join together and pursue a nationwide collective action against their employer. Southern District Magistrate Judge Barbara Moses’ recent decision in Pettanato v. Beacon Health Options addressed an unsettled jurisdictional issue in connection with such actions: If the court lacks general personal jurisdiction over the employer, does each individual employee have to establish that the court has specific personal jurisdiction with respect to his or her claim? Judge Moses concluded that they do. In this article, we analyze Judge Moses’ decision, which is a reminder of the rigor with which courts enforce personal jurisdiction requirements.

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

12.12.19 | Articles, Books & Journals

Supreme Court Asked to Assess Per Se Rule in Criminal Antitrust

New York Law Journal

Practitioners have observed a tension between criminal enforcement of the broadly written terms of the Sherman Antitrust Act of 1890 and the modern Supreme Court’s notions of statutory interpretation and due process. In this article, we analyze a recent certiorari petition filed in Sanchez et al. v. United States, which asks whether the operation of the per se rule in criminal antitrust cases violates the constitutional prohibition against instructing juries that certain facts presumptively establish an element of a crime. If the Court grants certiorari, Sanchez could provide an interesting test of the direction of the current Court’s criminal law jurisprudence and of its willingness to reconsider longstanding precedent.

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

11.26.19 | Blog Posts

Intimidation or Free Speech: Are Trump’s Tweets Witness Tampering?

The Insider: White Collar Defense and Securities Enforcement

President Trump’s use of Twitter to shape the narrative is notorious. True to form, he was tweeting fast and furious during the impeachment hearings. Negative testimony about the president’s interactions with Ukrainian leader Volodymyr Zelensky repeatedly incited his aggressive retorts, prompting speculation about whether his outbursts may be viewed as witness intimidation. Citing the First Amendment, Trump claims he is free to say what he pleases, including name-calling and denigrating witnesses. But is it criminal witness intimidation? [...]

Related Lawyer: Robert J. Anello

11.21.19 | Articles, Books & Journals

Materiality and Admissibility of Evidence in Criminal Securities Fraud Cases

New York Law Journal

Materiality is often a critical issue in securities fraud prosecutions. In this article, we discuss a series of three important Second Circuit decisions that explored the admissibility of evidence offered by the government to prove, and by the defense to disprove, materiality in the context of securities trading. We hope you find the article of interest. 

Related Lawyers: Elkan Abramowitz, Jonathan S. Sack

11.14.19 | Articles, Books & Journals

John Doe Summonses: Procedural Hurdles with Limited Review

New York Law Journal

John Doe summonses have long been a powerful tool in the IRS’s arsenal to combat tax fraud schemes. Such summonses enable the IRS to seek data on a class of otherwise unidentified persons where it can articulate a reasonable basis to believe that individuals within that class have failed to comply with their tax obligations. In this article, I analyze recent decisions highlighting the heavy burden facing a party challenging a John Doe summons and discuss the potential impact of Congress’s inclusion of an additional limitation on the issuance of John Doe Summonses in the Taxpayer First Act. 

Related Lawyer: Jeremy H. Temkin

11.04.19 | Blog Posts

The Minuses of Bringing a Plus One to Meetings with Counsel

The Insider: White Collar Defense and Securities Enforcement

It’s a privilege to have a close family, but the presence of family members for conversations with counsel can waive privilege. Nowhere does this create more of a potential problem than in criminal prosecutions. In such cases, it is not uncommon for a client to want a spouse, parent, or even child on hand at counsel’s office to discuss, for example, general strategy, the risks of going to trial, or plea options. The desire to include family members in these conversations makes sense, because the choices an individual makes in a criminal matter can have wide-ranging consequences for loved ones. But including family members in conversations with counsel creates the risk that the conversation will not be treated as confidential, and that one of those family members could be called to testify to the contents of the conversation. It is important that counsel, clients, and family members alike understand those risks and how to minimize them. [...]

Related Lawyer: Brian A. Jacobs

10.18.19 | Blog Posts

Tax Gap Estimates Show That Compliance Rates Remain Unchanged

The Insider: White Collar Defense and Securities Enforcement

With the passing of the October 15 deadline for filing individual income tax returns on extension, the extent to which taxpayers voluntarily comply with their tax obligations is top of mind for many tax professionals and observers. For people concerned with such things, the Internal Revenue Service periodically issues reports measuring voluntary compliance with the tax laws by computing the so-called “tax gap”, which purports to represent the difference between taxes that are owed and taxes that are paid. [...]

Related Lawyer: Jeremy H. Temkin

10.15.19 | Articles, Books & Journals

Significant Liability May Await Those Who File SLAPP Suits

New York Law Journal

In recent years, numerous states have enacted laws to deter so-called “SLAPP” suits—i.e., strategic lawsuits against public participation. These anti-SLAPP laws provide procedural protections for individuals and entities that are sued for speaking out on public matters. In this article, we discuss Southern District Judge J. Paul Oetken’s recent decision in National Jewish Democratic Council v. Adelson, in which he addressed – and rejected – several challenges to one of the nation’s most expansive anti-SLAPP laws.

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

10.10.19 | Articles, Books & Journals

SEC’s Reboot on Waiver Requests in Enforcement Settlements

New York Law Journal

When companies consider resolving an SEC enforcement action, they sometimes learn too late about so called “bad-boy” provisions that will inflict serious collateral consequences on their business unless the SEC provides a waiver. In this article, we discuss SEC Chairman Jay Clayton’s recently announced change in how the SEC will consider such waiver requests, which should rationalize the waiver process and provide greater certainty to companies and their shareholders regarding the consequences of enforcement settlements.

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

10.03.19 | Articles, Books & Journals

“Mismarking”: Developments In Valuation Fraud

Business Crimes Bulletin

The Department of Justice has aggressively targeted valuation or “mismarking” fraud in a number of indictments brought within the last few years. In this article, I discuss the Department’s efforts to expand its mismarking inquiries beyond stocks and bonds, highlight recent cases which illuminate the increasing need for robust internal controls designed to eliminate the incentives for an employee or manager to overvalue assets, and conclude that the defense of these cases will likely depend upon the ability of the defendants to discredit the cooperating witnesses while demonstrating that they acted in complete good faith.

Related Lawyer: Telemachus P. Kasulis

10.01.19 | Articles, Books & Journals

Limiting the Reach of the Supreme Court’s McDonnell Decision

New York Law Journal

A key question in most public corruption cases is whether a public official was part of an unlawful quid pro quo. In recent years, the “quo” issue has received particular attention: what type of acts must a public official perform, or contemplate performing, to give rise to criminal liability. In this article, we describe the definition of “official act” in McDonnell, discuss recent Second Circuit decisions which declined to extend the reach of McDonnell’s “official act” requirement, and highlight the continued fluidity of key aspects of anti-bribery law.

Related Lawyers: Elkan Abramowitz, Jonathan S. Sack

09.22.19 | Blog Posts

Trump's Efforts to Quash Manhattan DA's Tax Subpoena: A Tortured Version of the Rule of Law

The Insider: White Collar Defense and Securities Enforcement

In January 2016, President Trump publicly announced that he would “absolutely” release his tax returns. Since that proclamation, Trump consistently has fought efforts to disclose those same returns. Continuing that trend, Trump has filed a federal complaint to enjoin a subpoena from Manhattan prosecutors that required Trump’s accountant to produce his tax returns. Through his lawsuit, Trump has staked out an unreasonably broad conception of presidential immunity that finds no support in the law—and contorts “policy” beyond recognition. Indeed, read literally, it could unreasonably suggest that even a President’s coconspirators could not be investigated, if to do so would touch on information about the President. [...]

Related Lawyer: Robert J. Anello

09.19.19 | Articles, Books & Journals

Confidentiality of Tax Returns, Congressional Authority and the President

New York Law Journal

Section 6103 of the Internal Revenue Code sets out a simple “general rule” prohibiting federal employees from disclosing tax returns and return information. This straightforward provision is then modified by a maze of exceptions, several of which are the subject of litigation between Congressional Democrats seeking President Trump’s tax returns and the President seeking to avoid such disclosure. In this article, I discuss Section 6103’s many exceptions, Congress’s pending request for President Trump’s returns, and how litigation over the Congressional requests may provide a roadmap for both prosecutors seeking returns filed by targets in non-tax criminal investigations and civil litigants looking to avoid the heightened discovery burden when seeking copies of tax returns filed by their adversaries.

Related Lawyer: Jeremy H. Temkin

09.18.19 | Blog Posts

Employee Liability for Corporate Misconduct – Elizabeth Warren Style: Can Negligence Become Criminal?

The Insider: White Collar Defense and Securities Enforcement

Since the last financial crisis and the resulting increased scrutiny on business entities, companies involved in suspected corporate misconduct repeatedly have paid massive fines to resolve criminal charges. Alongside high-profile announcements by the government of multi-million- and billion-dollar recoveries has been a near constant refrain from politicians and commentators that prosecutors have been lax in pursuing individuals in connection with large corporate malfeasance. [...]

Related Lawyer: Robert J. Anello

08.23.19 | Articles, Books & Journals

The Limits of Obtaining Discovery from U.S. Persons for Use in Foreign Proceedings

New York Law Journal

Parties to pending or contemplated foreign proceedings potentially can use 28 U.S.C. § 1782 to obtain broad discovery from U.S. persons for use in foreign proceedings. In this article, we discuss Judge Jed S. Rakoff’s recent decision involving Section 1782 in In re Petrobras Securities Litigation and the legal framework governing the statute.

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


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