Publications

08.04.20 | Articles, Books & Journals

Lessons from the Insider Trading Prohibition Act After Its Likely Demise In the Senate

Business Crimes Bulletin

After a long and winding road, the House voted to pass insider trading reform on December 5, 2019 with 410 yeas against only 13 nays. But the bill quickly vanished in the Senate after it was referred to the Committee on Banking, Housing, and Urban Affairs. By all accounts, insider trading reform is likely a dead letter for the foreseeable future. In this article, we highlight the strengths and weaknesses of the ITPA and conclude that those involved in drafting the next insider trading bill would do well to keep the lessons of the failed ITPA in mind when a new chance for reform comes around.

Related Lawyer: Telemachus P. Kasulis

07.17.20 | Articles, Books & Journals

Public and Private Honest Services Fraud: Are They Diverging?

New York Law Journal

Since the Supreme Court’s decision in McDonnell v. United States, 136 S. Ct. 2355 (2016), the “official act” has been a hotly contested issue in public corruption prosecutions. McDonnell has led defendants to argue that the “official act” requirement applies to other crimes – not simply honest services fraud and Hobbs Act violations – and to private, not just public, corruption. In this article, we discuss cases that have addressed this question, focusing on a recent decision from Chief Judge Colleen McMahon in the Southern District of New York.

Related Lawyers: Elkan Abramowitz, Jonathan S. Sack

07.16.20 | Articles, Books & Journals

Should a Client File an Amended Tax Return?

New York Law Journal

From time to time, tax professionals learn that a client previously filed a false return, either as a result of an innocent mistake or due to fraud. While a taxpayer is under is no legal obligation to correct a previously filed return, there are often good reasons to do so. In this article, we discuss factors to be considered in advising a client as to whether to amend a return, including the applicable standards of conduct and alternatives available when the initial return fraudulently underreported income or overstated deductions. We also highlight the care that must be taken in deciding whether the benefits of amending returns warrant the risk of making admissions that could color any subsequent criminal prosecution and conclude by noting that, because Form 1040-X requires a taxpayer to swear under penalties of perjury that the amended return is complete and accurate, a client cannot correct one error on the originally filed return without curing all such errors.

Related Lawyer: Jeremy H. Temkin

06.16.20 | Articles, Books & Journals

The Limits of Withholding Expert-Generated Materials

New York Law Journal

In this article, we discuss Southern District Magistrate Judge Gabriel W. Gorenstein’s recent decision in Hernandez v. The Office of the Commissioner of Baseball, in which he rejected plaintiff’s claim that a memorandum that his expert had prepared in advance of the expert’s deposition—on his own accord and absent any instruction from counsel—qualified for protection as a draft report or an expert-attorney communication. Although the 2010 amendments to Rule 26 have given counsel the ability to withhold many expert-generated materials, Judge Gorenstein’s decision demonstrates that courts will insist that the withheld materials in fact qualify as draft reports or expert-attorney communications.

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

06.10.20 | Articles, Books & Journals

Bridgegate - Open Questions After Supreme Court Narrows Fraud Statutes

New York Law Journal

Federal prosecutors often cannot resist the attractions of broadly worded “catch-all” fraud statutes like the one prohibiting wire fraud. From time to time, however, the Supreme Court has rebuffed efforts to further expand the boundaries of these crimes. In our latest article, we discuss the Court’s reversal of the “Bridgegate”-related convictions of two senior New Jersey officials, and the decision’s impact on other high-profile pending fraud prosecutions such as the NCAA basketball case. We conclude that although the Bridgegate decision did not definitively resolve the controversial issue whether what has become known as the “right to control” constitutes "property" under the federal fraud statutes, the opinion takes its place among Supreme Court decisions reining in prosecutors’ expansive readings of these laws.

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

05.28.20 | Articles, Books & Journals

Limiting Victims’ Rights: The Eleventh Circuit Reads the CVRA Narrowly

New York Law Journal

The life, and death, of Jeffrey Epstein has captured the attention of the legal community and broader public. The latest legal twist in the story is a decision by the Eleventh Circuit in In re Wild, 955 F.3d 1196 (11th Cir. 2020), which held that federal prosecutors did not have an obligation to inform, and consult with, Epstein’s victims regarding their decision not to prosecute Epstein for sex trafficking. In our latest article, we summarize the federal Crime Victims’ Rights Act and discuss the majority, concurring and dissenting opinions of the divided Eleventh Circuit.

Related Lawyers: Elkan Abramowitz, Jonathan S. Sack

05.21.20 | Articles, Books & Journals

Financial Considerations for Sentencing in Federal Tax Prosecutions

New York Law Journal

In addition to time in prison, defendants convicted of financial crimes in federal court face fines and restitution. While the focus of most sentencing hearings is the length of any period of incarceration to be imposed, defense counsel must also consider and address the substantial monetary penalties that may be applicable. In our latest article, we review the recent decision of the United States Court of Appeals for the Second Circuit in United States v. Adams, which addressed the availability and extent of restitution and fines in criminal tax cases, and conclude that while defense counsel frequently have to “pick their battles” at sentencing, they need to be mindful of their clients’ financial exposure. 

Related Lawyer: Jeremy H. Temkin

05.14.20 | Articles, Books & Journals

Employment Agreements Under (Dis)stress

New York Law Journal

Many businesses are facing the need to reduce costs as a result of the coronavirus and its economic impact. For many businesses, that means cutting salaries sharply. For an individual with an employment contract, a substantial cut in pay could implicate a number of rights under that contract. In this article, we consider the circumstances under which a cut in pay might amount to a de facto or constructive termination which gives rise to a claim for severance and other benefits under an employment agreement. We hope you find the article of interest.

Related Lawyers: Jonathan S. Sack, A. Dennis Dillon

04.21.20 | Articles, Books & Journals

Obtaining Discovery from a Foreign Corporation through Its Domestic Affiliate

New York Law Journal

Parties to civil litigation often seek to obtain records held by foreign companies by subpoenaing their U.S. subsidiaries or affiliates. In this article, we analyze Southern District Magistrate Judge Katherine H. Parker’s recent decision in Hake v. Citibank, N.A., 2020 WL 1467132 (S.D.N.Y. Mar. 26, 2020), in which Judge Parker denied a motion to compel a domestic bank to produce documents held by its foreign parent on various grounds, including because the plaintiffs had failed to show that a sufficiently close relationship existed between the foreign parent and the domestic subsidiary.

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

04.15.20 | Articles, Books & Journals

Sentencing In Recent Insider Trading Cases: What Judges Have Said and Done

The Review of Securities & Commodities Regulation

Amidst several years of doctrinal confusion about what does and does not constitute illegal insider trading, less attention has been paid to what actually happens at the conclusion of insider trading prosecutions when defendants appear in court for sentencing. It is notable that judges have used harsh language at sentencings to describe the seriousness of insider trading, but then have imposed sentences below the minimums provided in the Sentencing Guidelines. What accounts for this discrepancy? In this article, we assess recent insider trading sentencing proceedings and evaluate the factors that may be contributing to the outcomes.

Related Lawyer: Brian A. Jacobs

04.09.20 | Articles, Books & Journals

Paying Plea Agreements More Than Lip Service

New York Law Journal

Sometimes defense counsel sees hard-won plea agreement concessions have limited impact on the court at sentencing, and the issue arises whether the prosecutor’s sentencing arguments went so far as to deny the defendant the benefit of his or her plea bargain. In our latest article, we discuss United States v. Wright, an appeal to the United States Court of Appeals for the Second Circuit brought by a co-defendant in the fraud prosecution of former sports radio personality Craig Carton, which presented the question whether though purporting to accept the terms of a plea agreement, a prosecutor’s advocacy may cross the line into a breach of that agreement. Although Wright’s withdrawal of the appeal leaves further development of this important area of criminal law to another day, in analyzing Wright and other key Second Circuit decisions, we conclude that Wright should serve as a cautionary tale to prosecutors who prefer to avoid claims of violating their own plea agreements.

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

03.19.20 | Articles, Books & Journals

Immigration Consequences for Convictions for Making False Statements

New York Law Journal

In 2010, the U.S. Supreme Court held that competent criminal defense lawyers must advise their clients of the immigration consequences of pleading guilty in order to provide “reasonable professional assistance.” Two years later, in Kawashima v. Holder, the Supreme Court held that offenses relating to the preparation and filing of false tax returns constitute aggravated felonies that can serve as a predicate for deportation. In this article, we analyze recent decisions by several Circuit Courts of Appeals applying Kawashima’s reasoning not just to defendants convicted of making false statements on tax returns, but to other white-collar offenders as well, and question whether immigration considerations will make it more difficult to achieve pretrial dispositions in false statement cases.

Related Lawyer: Jeremy H. Temkin

03.11.20 | Articles, Books & Journals

A Good Sentencing Precedent is Hard to Find

Federal Sentencing Reporter

In the February 2020 issue of the Federal Sentencing Reporter, Vol. 32, No. 3, pp. 138-144, Morvillo Abramowitz partner Brian A. Jacobs expands upon a prior column he wrote (available here) and discusses in depth the role sentencing precedent has played in recent federal sentencing proceedings, with a particular focus on cases involving gambling addictions and college admissions and testing fraud. Notwithstanding the key role sentencing precedent can play, courts and parties still face significant challenges in finding applicable sentencing precedents, and the article ultimately explores ways in which the body of sentencing law could be made more readily available to parties and courts alike.

Related Lawyer: Brian A. Jacobs

03.03.20 | Articles, Books & Journals

The Importance of “Particulars” in Criminal Fraud Cases

New York Law Journal

Criminal fraud charges are often described very broadly, without identifying the specific misstatements central to the case. A bill of particulars is an important tool to help prepare a defense and minimize surprise at trial. In this article, we discuss the standard for granting a bill of particulars, and analyze a recent decision which ordered particulars in the high-profile prosecution growing out of the Theranos blood-testing scandal. We hope you find the article of interest. 

Related Lawyers: Elkan Abramowitz, Jonathan S. Sack

02.19.20 | Articles, Books & Journals

ICE Confronts the Privilege Against Courthouse Civil Arrests

New York Law Journal

More than 500 years ago, English courts developed a common law privilege, which was incorporated into American law in the early years of the republic, protecting against civil arrests of parties and witnesses on courthouse premises and when traveling to or from court. Recently, the U.S. Immigration and Customs Enforcement agency (ICE) has taken action contrary to this privilege by engaging in courthouse civil arrests of undocumented and other aliens. The State of New York and Kings County District Attorney have brought suit to stop this practice. In this article, we analyze Southern District Judge Jed S. Rakoff’s recent decision denying ICE’s motion to dismiss the lawsuit and concluding that although ICE enjoys broad discretion in enforcing the nation’s immigration laws, its discretion is not unlimited, with one powerful such limit potentially being the common law privilege against courthouse civil arrests.

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

02.13.20 | Articles, Books & Journals

Attorney Proffers: Practical Considerations and Some Law Too

New York Law Journal

One of the key tools that white-collar attorneys regularly use to engage with prosecutors – the attorney proffer – often proceeds without any express agreement regarding what ground rules apply. In this article, we discuss the law around attorney proffers, highlight special considerations for corporate clients, and conclude that ample support exists for the longstanding custom and practice of using a careful attorney proffer as a means for necessary “frank discussion between defense counsel and prosecutor” without undue risk to either side.

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

02.05.20 | Articles, Books & Journals

When Is a Promise Enough? Contractual Duties and Insider Trading

Business Crimes Bulletin

In 2017, the SEC brought an insider trading action against an individual named Todd Alpert in the Southern District of New York for breaching a duty by misappropriating information used to trade securities. The case raised an interesting issue: What kind of duty did Alpert breach? Insider trading narratives have traditionally turned on breaches of fiduciary duties – but was a fiduciary duty required? In this article, I discuss the impact of Alpert, highlight the Second Circuit cases grappling with whether a simple contract is sufficient to create a duty to refrain from insider trading, and conclude that absent new legislation we will have to look to forthcoming decisions for guidance on what kind of promises are sufficient to create duties under the Exchange Act.

Related Lawyer: Telemachus P. Kasulis

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

01.06.20 | 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


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