Category: Sentences and Fines

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Supreme Court Reins In SEC’s Disgorgement Power

This week the Supreme Court trimmed the SEC’s power to seek disgorgement of unlawful gains by securities law violators by unanimously holding in Kokesh v. Securities and Exchange Commission that SEC disgorgement constitutes a penalty and such claims must be brought within five years of their accrual. This decision resolved the circuit split described in … Continue Reading

DOJ Memo to Prosecutors Calls for More Aggressive Pursuit of Corporate Executives

The U.S. Department of Justice—widely criticized for the perceived lack of cases brought against corporate executives—issued a new directive yesterday to all U.S. Attorneys designed to hold more individuals accountable for illegal corporate conduct.   The memorandum, written by Deputy Attorney General Sally Quillian Yates, first acknowledges the challenges involved in pursuing individuals for corporate crimes, … Continue Reading

Call to Arms from White House and DOJ on Spyware Sanctions

Last week, DOJ’s Assistant Attorney General Leslie Caldwell took to the Justice Department’s blog to rally support behind recent White House proposals that would bolster law enforcement tools for prosecuting those who create, sell or advertise malicious “spyware.”  Spyware refers to software that allows users to surreptitiously intercept communications on their victims’ electronic devices such … Continue Reading

Compliance Officer Assessed $1 Million Penalty for Program Failures

In a rare move targeting an in-house compliance officer, the former Chief Compliance Officer of MoneyGram International Inc. has been assessed a $1 million civil penalty by the U.S. Department of Treasury’s Financial Crimes Enforcement Network (“FinCEN”) for failing to implement and maintain an effective anti-money laundering (“AML”) program and for failing to file suspicious activity reports (“SARs”) … Continue Reading

Waving Goodbye to IAC Waivers

With nearly 97% of all federal convictions in 2013 secured through plea agreements, the Department of Justice announced yesterday that it will no longer ask criminal defendants who plead guilty to waive their right to appeal on the basis of ineffective assistance of counsel (IAC).  In a memorandum to all federal prosecutors, Deputy Attorney General James … Continue Reading

SEC Measures Unpaid Taxes to Achieve “Staggering” Disgorgement Award

Last week, U.S. District Court Judge Shira Scheindlin of the Southern District of New York ordered disgorgement of $187.7 million in U.S. Securities and Exchange Commission v. Wyly et al, and further estimated that the amount will balloon to between $300 million to $400 million after the SEC recalculates pre-judgment interest.  The award, to be paid by Sam … Continue Reading

Losing Gamble: FinCEN Bars Casino Staffer from Financial Institutions Over Anti-Money Laundering Violations

Last week, the Financial Crimes Enforcement Network (FinCEN) permanently barred former casino staffer George Que from working at financial institutions for willfully violating the reporting requirements of the Bank Secrecy Act (BSA).  Que, the former VIP Services Manager at the Tinian Dynasty Hotel & Casino in the Northern Mariana Islands, also agreed to pay a … Continue Reading

FedEx Charged with Criminal Distribution in Crackdown on Prescription Drug Abuse

A federal grand jury in San Francisco indicted FedEx Corporation, FedEx Express, and FedEx Corporate Services, Inc. (collectively, “FedEx”) for its role in distributing controlled substances and prescription drugs for illegal internet pharmacies.  The 18-count superseding indictment charges FedEx with conspiring with two internet pharmaceutical rings (internet pharmacies, fulfillment centers, doctors) to distribute controlled substances such … Continue Reading

Bribers Beware! Company Agent Sentenced to 24 Months for Obstructing Federal FCPA Investigation

A former agent for mining company BSG Resources Ltd., Frederic Cilins, was sentenced Friday to 24 months in prison for obstructing a federal investigation into an alleged bribery and money laundering scheme.  The charges against Cilins stem from an FBI investigation into efforts to secure lucrative mining concessions in the Republic of Guinea.  According to prosecutors, the investigation … Continue Reading

Revisiting SEC Consent Decrees in the Wake of SEC v. Citigroup

With the Second Circuit’s recent reaffirmation of the SEC’s substantial discretion in negotiating the terms of settlement—notably vacating Judge Jed Rakoff’s rejection of the proposed $285 million settlement in SEC v. Citigroup Global Markets, Inc.—eyes are turning to the decision’s immediate impact on at least one other high-stakes case:  a $602 million insider trading settlement … Continue Reading

Will Rakoff’s “Legal Error” Change SEC’s View of Settlement Admissions?

On June 4, 2014, the Second Circuit Court of Appeals vacated Judge Rakoff’s November 28, 2011 Order that had rejected the Citigroup-SEC settlement on a number of grounds, including that the SEC had allowed Citigroup to avoid admitting guilt. The Appellate Court found that Judge Rakoff abused his discretion and committed “legal error” in requiring … Continue Reading

Too Big to Fail vs. Too Big to Jail

On Monday, U.S. Attorney General Eric Holder publicly addressed mounting criticism of the DOJ’s treatment of financial institutions implicated in potential criminal misconduct:  simply put, “there is no such thing as too big to jail.”  Though Holder noted that some have suggested that the size and influence of certain financial institutions effectively renders them immune … Continue Reading

Sixth Circuit: When Plea Agreements Waive the Right to Appeal Restitution

Over 90% of federal criminal cases are resolved by plea agreement, and plea agreements typically require defendants to waive their rights to appeal their sentences.  In many cases, prosecutors also require that defendants agree to pay restitution (compensation for loss) to the victims of the crime.  Practically speaking, the specific amount of restitution to be … Continue Reading

The SEC Speaks in 2014: Enhanced Statutory Regime Combined with Data Analytics Tools Results in Enforcement 2.0

The annual “SEC Speaks Conference,” where the U.S. Securities and Exchange Commission (SEC) and its senior staff review the major developments from the prior year, and preview the SEC’s enforcement priorities for the upcoming year, convened in Washington D.C. on February 21-22, 2014.  From the outset, it became clear that the SEC is eager to … Continue Reading
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