The U.S. Court of the Appeals for the Ninth Circuit recently held that criminal defendants who gain unlawful proceeds from certain offenses must pay back those proceeds—even when they no longer possess them. More specifically, the government may obtain “personal money judgments” that can be satisfied through the defendants’ untainted (and currently unidentified or even … Continue Reading
The German Federal Ministry of Justice and Consumer Protection recently presented draft legislation to Parliament that could pose a marked shift in how corporate crimes are sanctioned in Germany. If enacted, this draft legislation, titled the Corporate Sanctions Act (“CSA”), would permit the criminal prosecution and conviction of a corporate entity in circumstances where the entity’s … Continue Reading
The DOJ has raised the stakes in criminal spoofing enforcement, unveiling sweeping charges against three traders who allegedly conspired to manipulate the precious metals market. While the DOJ’s involvement in spoofing enforcement—an area previously dominated by civil regulators and SROs—has become more commonplace, the DOJ is using a new tactic in this latest enforcement action. … Continue Reading
The DOJ is increasingly using a “data focused approach” to identify economic crime and corporate misconduct, according to a DOJ official. In remarks to the 6th Annual Government Enforcement Institute, Deputy Assistant Attorney General Matthew S. Miner recently shared that using data analytics to identify fraud improves efficiency, expedites case development, and makes program enforcement … Continue Reading
Last month, the UK Serious Fraud Office (“SFO”) published non-binding, internal guidance expanding on its view of corporate cooperation in prosecutions. The guidance marks a notable departure from the SFO’s past reluctance to clarify its expectations for corporations seeking cooperation credit, while still making it clear that no outcome will be “guaranteed,” even for companies that have … Continue Reading
Last month, attorneys from around the world descended upon Buenos Aires to tango with criminal justice and anti-corruption experts at the International Bar Association’s 22nd Annual Transnational Crime Conference. Conference highlights included remarks from distinguished members of the Argentine government, including the Minister of Justice and Human Rights, President of the Financial Information Unit, and … Continue Reading
Section 14(e) of the Securities Exchange Act prohibits deceptive conduct when making a tender offer to shareholders. Recently, in Emulex Corp. v. Varjabedian, the United States Supreme Court declined to resolve a split among the circuit courts about what a plaintiff alleging a violation of Section 14(e) must prove. As a result, the Ninth Circuit … Continue Reading
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
The U.S. Supreme Court recently handed down a win for the SEC and private securities litigants, significantly broadening the scope of primary liability under Rule 10b-(5). In Lorenzo v. SEC, the Court held that liability under Rules 10b-5(a) and (c)—which make it unlawful to employ a scheme to defraud or engage in any practice that … Continue Reading
Perhaps no part of the Dodd–Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) has garnered as much attention as its whistleblower provisions, which pay corporate whistleblowers bounties under some circumstances, and prevent employers from retaliating against whistleblowing employees. Often times, the bounties paid to whistleblowers under Dodd-Frank warrant the most attention-grabbing headlines. But Dodd-Frank’s … Continue Reading
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
The month of March has brought with it the first-ever criminal municipal bond securities fraud conviction, the resolution of enforcement actions targeting banks and senior executives accused of shirking duties to oversee municipal bond issuances, and proposed rule amendments intended to improve municipal securities disclosures—continuing a trend of intensified regulatory enforcement that targets industry “gatekeepers” … Continue Reading
The air of uncertainty was palpable as current and former members of the U.S. Securities and Exchange Commission’s (SEC) Division of Enforcement spoke at the Securities Regulation Institute’s 44th Annual Conference in Coronado, California earlier this week. Important questions went largely unanswered about the impact of the recent resignations of both SEC Chair Mary Jo … Continue Reading
The massive Panama Papers leak has attracted attention to the use of offshore business entities and implicated 2,400 U.S.-based clients of Mossack Fonseca. U.S. taxpayers with offshore assets should be wary of increased scrutiny by federal regulators, which may lead to criminal cases brought by U.S. Department of Justice. In this update we detail the … Continue Reading
In the largest action brought under the Kleptocracy Asset Recovery Initiative, the DOJ seeks to recover over $1 billion in assets bought with laundered funds misappropriated from 1Malaysia Development Berhad (“1MDB”), a Malaysian sovereign wealth fund. 1MDB was created by the Malaysian government to promote economic development through international partnerships and foreign direct investment. The … Continue Reading
The Securities and Exchange Commission (SEC) recently announced an administrative settlement with Apex Fund Services (US) Inc., a firm providing administrative services to private funds, based on its alleged failure to heed red flags and correct faulty accounting by two private equity managers. The SEC alleged that, in carrying out its contractual fund administration functions, … Continue Reading
On May 23, 2016, the Second Circuit presented a significant setback to the Department of Justice (DOJ) by reversing a $1.27 billion penalty against Bank of America and Countrywide Loans. As we’ve posted before, in October 2012, DOJ filed a civil suit against Bank of America and Countrywide based on mortgages sold to Fannie Mae … Continue Reading
At the annual “SEC Speaks” conference held Feb. 19-20, 2016, in Washington, D.C., SEC Chairman Mary Jo White’s opening remarks cautioned that the SEC should not be considered a mere “disclosure agency,” as she promised to use all of the tools at the SEC’s disposal to carry out its regulatory mission. White underscored that these … Continue Reading
[Editor’s Note: This past Friday, Perkins Coie Partner Lou Mejia, former SEC Chief Litigation Counsel, joined the chair of the SEC Enforcement Division’s Financial Reporting and Audit Group on a panel to discuss the agency’s latest enforcement efforts surrounding financial reporting fraud]. Margaret McGuire, the chair of the SEC Enforcement Division’s Financial Reporting and Audit Group … Continue Reading
Note: An earlier post on Perkins Coie’s In the Arena: Law and Politics Update discussed, from a campaign finance lawyer’s perspective, why the prosecution in United States v. Harber signals greater jeopardy in the future for operatives in down-ballot races who coordinate with hastily-formed “super PACs.” And an earlier version of this post, which offers … Continue Reading
The Securities and Exchange Commission announced this week that it has awarded its first whistleblower payout to a former company officer. The redacted order indicates that the former officer will receive an award between $475,000 and $575,000 for reporting high-quality, original information about a securities fraud that resulted in an SEC enforcement action with sanctions exceeding $1 … Continue Reading
In a ground-breaking decision, the Second Circuit dealt a substantial blow to federal prosecutors’ epic crackdown on insider trading by raising the bar for the government’s burden of proof in “remote tippee” cases that have plagued the financial industry in recent years. The decision in United States v. Newman (available here) places significant restrictions on the ability … Continue Reading
At first glance, the 24-pages of orders issued by the Supreme Court on November 10, 2014, appear to be nothing more than the usual proscriptions, including a long list of cases for which the Supreme Court has declined to consider further appeals. However, at the end of a perfunctory list of certiorari denials is a three-page Statement … Continue Reading
Companies should carefully evaluate their insurance policy provisions for fraud coverage in light of the Third Circuit’s recent decision enforcing a sub-limit on fraud defense coverage in the context of an employee theft. In Camico Mutual Insurance Co. v. Heffler Radetich & Saitta LLP, the Court of Appeals for the Third Circuit affirmed the lower court’s decision granting summary … Continue Reading
