Category: DOJ

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Second Circuit Affirms Broad Reading of Sec. 666 Bribery

The Supreme Court’s 2016 decision in United States v. McDonnell raised questions about the constitutionality of expansive interpretations of federal bribery statutes.  However, the bribery statute at issue in McDonnell—quid pro quo corruption defined at 18 U.S.C. § 201(a)(2)—is not the only bribery statute in federal prosecutors’ toolbox.  Since McDonnell was decided, federal prosecutors have increasingly relied on 18 … Continue Reading

Corporate Execs Indicted in First-Ever “Failure to Report” Consumer Safety Case

In March 2019, the U.S. Department of Justice (DOJ) brought its “first-ever” criminal prosecution against two corporate executives under the Consumer Product Safety Act’s (CPSA) “failure to report” provision.  The two defendants, Simon Chu and Charley Loh, also face charges of wire fraud, conspiracy to commit wire fraud, conspiracy to fail to furnish information under … Continue Reading

Cooperation Credit Under New DOJ False Claims Act Guidance

On May 7, 2019, the Department of Justice (DOJ) released long awaited guidance on how it will evaluate and credit cooperation in False Claims Act (FCA) cases.  The new guidelines, codified in DOJ’s Justice Manual, is the department’s latest attempt to drive consistency in its handling of FCA matters.  Maximum credit, usually in the form … Continue Reading

DOJ Abandons “Secondary” Spoofing Case

After software developer Jitesh Thakkar’s criminal trial on “spoofing”-related charges ended in a mistrial two weeks ago, the Government determined it will not seek to retry the case.  Thakkar was originally charged with conspiracy to commit spoofing and with two counts of spoofing arising out of his company’s development of software that enabled a London-based … Continue Reading

Novel Spoofing Case Against Software Developer Ends in Mistrial

Following a week of trial proceedings in the case of defendant Jittesh Thakkar—a software programmer indicted in February 2018 on conspiracy and aiding and abetting charges related to a spoof trading scheme—the government’s case against Thakkar ended in a mistrial.  The jurors could not reach a unanimous verdict on the two aiding-and-abetting spoofing counts charged … Continue Reading

Bellwether Spoofing Case Goes to Trial in Chicago

Can a software programmer be held criminally responsible for designing a program that a trader uses to “spoof” the commodity futures market?  This is the question posed to the jury in U.S. v. Thakkar, 18-cr-36 (N.D. Ill.), which trial began this week in federal court.  The case grew out of the manipulative trading activities of … Continue Reading

Revisiting Agency Liability Under the FCPA Post-Hoskins

In United States v. Hoskins, 902 F.3d 69 (2d Cir. 2018) the Second Circuit held that a non-resident foreign national cannot be criminally liable for aiding and abetting or conspiring to violate the FCPA unless the government can establish that such an individual acted as an agent of one of the categories of persons subject … Continue Reading

Securities Fraud Prison Sentences Highest Among Economic Crime, U.S. Sentencing Commission Reports

Federal sentencing guidelines for economic crime have long been subject to criticism due to high dollar loss amounts that can produce eye-popping prison terms. Adding to the fodder, a new report issued by the United States Sentencing Commission found that securities and investment fraud offenders received the longest average sentences under the U.S. Sentencing Guidelines—more … Continue Reading

SEC’s Polycom FCPA Settlement Leaves Unanswered Questions

On December 26, 2018, the Securities and Exchange Commission (“SEC”) announced a settlement with communications technology firm Polycom, Inc. (“Polycom” or the “Company”) for violating the books and records and internal accounting controls provisions of the Foreign Corrupt Practices Act (“FCPA”) in connection with a scheme to bribe Chinese government officials. Under the settlement, Polycom … Continue Reading

Preparing Your Company to Respond to Unannounced Government Visits (Part 2)

This series, written by recent in-house counsel and former federal prosecutors, aims to help in-house legal and compliance teams avoid the types of seemingly minor or inconsequential missteps that can lead to aggressive government responses, including parallel civil and criminal investigations. In part two, the authors explain what to do when a search warrant is … Continue Reading

Preparing Your Company to Respond to Unannounced Government Visits (Part 1)

This series, written by recent in-house counsel and former federal prosecutors, takes a practical approach to helping in-house legal and compliance teams operating in a world of complex regulatory schemes and increased whistleblower activity.  It specifically aims to address how to avoid the types of seemingly minor or inconsequential missteps that can lead to aggressive … Continue Reading

SEC May Limit “Game Changing” Whistleblower Bounties

On June 28, 2018, the U.S. Securities and Exchange Commission proposed three rule changes to the Commission’s Whistleblower Program, including one that would authorize the SEC to “downward adjust” monetary awards in large actions for which an award might “exceed an amount that is reasonably necessary to advance the program’s goals”—in the view of the … Continue Reading

Courts Continue to Grapple with Border Searches of Electronic Devices: Fourth Circuit Rules Forensic Searches Require Individualized Suspicion

On May 9, 2018, the Fourth Circuit Court of Appeals issued an opinion in United States v. Kolsuz, holding that the Fourth Amendment requires individualized suspicion for forensic searches of cell phones seized at the border. In so holding, the Fourth Circuit provides important clarification about how the Fourth Amendment applies to border searches of … Continue Reading

Monitoring the Monitors: DOJ Ordered to Disclose Info on Monitor Selections

Last month, a D.C. federal judge ordered the Department of Justice to turn over the names of prospective monitors nominated to oversee the corporate compliance programs of fifteen companies found to be in violation of the Foreign Corrupt Practices Act (FCPA).  While recognizing that these individuals have “more than a de minimis privacy interest in … Continue Reading

SCOTUS Speaks:  Guilty Pleas Don’t Waive All Appellate Claims

On February 21, 2018, in Class v. United States, the U.S. Supreme Court reaffirmed that a defendant who pleads guilty can still raise on appeal any constitutional claim that does not depend on challenging his or her “factual guilt.”  The Court’s holding preserves a federal criminal defendant’s ability to challenge the constitutionality of the statute … Continue Reading

Former Colorado Chief Justice and Colleagues Examine Broader Implications Of Sessions’ Marijuana Move

There will be little debate that this has been a bad day for the state-sanctioned (and regulated) marijuana industry.  The Obama-era directives that significantly fettered the discretion of U.S. attorneys to bring federal narcotics charges against marijuana growers, distributors and possessors in states that “legalized” marijuana for medicinal or recreational purposes are now a thing … Continue Reading

DOJ’s FCPA Policy Puts Companies on Notice Regarding Electronic Communications

As cybersecurity concerns move more companies to batten down employee use of external email accounts and other websites through blocking software and other measures, the DOJ’s recently issued FCPA Corporate Enforcement Policy—now incorporated in the U.S. Attorneys’ Manual—unequivocally states that companies seeking full cooperation credit from DOJ in FCPA cases must ensure that employees are … Continue Reading

DOJ Highlights Disclosure Incentives Under New FCPA Enforcement Policy

The DOJ recently took another step to encourage corporate self-disclosure for FCPA violations through the announcement of a new FCPA Enforcement Policy based on the eighteen month FCPA Pilot Program.  The DOJ’s Pilot Program proved to be successful—the FCPA Unit received over 30 voluntary disclosures in the 18-month period the Pilot was in place—compared to … Continue Reading

Michael Coscia’s Spoofing Conviction Upheld by the Seventh Circuit

In a move that will have commodities traders on high alert, the Seventh Circuit Court of Appeals has upheld the conviction of Michael Coscia, who was sentenced to three years in prison after a federal jury found the former trader guilty of spoofing and commodities fraud. In its 42-page opinion, a three-judge panel denied Coscia’s … Continue Reading

Technological Advances in Food Safety Monitoring Present Enforcement Risks, Compliance Opportunities for the Food Manufacturing Industry

At the annual Food Safety Summit in Rosemont, Illinois, the Department of Justice’s increased focus on food safety enforcement was a key topic of discussion. While it was quite clear that the DOJ’s increased enforcement activity in high-profile food contamination cases involving companies such as Dole Foods and Chipotle Mexican Grill in 2016 caught the … Continue Reading

U.K. Court Orders Disclosure of Internal Investigation Documents to Criminal Prosecutors

In a controversial ruling, London’s High Court has held that interview notes and other documents created by outside legal counsel and forensic accountants as part of an internal investigation into foreign bribery allegations are not protected by the legal professional privilege.  While the appeals process is already underway, the May 8th decision by the Honourable … Continue Reading

The First 100 Days: Uncertainty in FCPA Enforcement

President Trump’s 2012 criticism of the Foreign Corrupt Practices Act (FCPA) is well-documented. At the time, news outlets reported that business mogul Trump commented on Wal-Mart’s alleged facilitation payments in Mexico to obtain various licenses and permits, opining that FCPA was a “horrible law and it should be changed,” and adding that it put U.S. … Continue Reading
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