Corporate Defense and Disputes

Important developments in U.S. securities law, white collar criminal defense, regulatory enforcement and other emerging issues impacting financial services institutions, publicly traded companies and private investment funds

Category Archives: White Collar

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Supreme Court To Resolve Circuit Split Over Bank Fraud Statute

On Monday April 25, the U.S. Supreme Court granted certiorari in United States v. Shaw, a closely watched case out of the Ninth Circuit addressing the bank fraud statute, 18 U.S.C. § 1344.  That statute has two subsections, the first of which criminalizes schemes “to defraud a financial institution.”  The question presented in Shaw is … Continue Reading

Supreme Court Clarifies That Untainted Assets Cannot Be Frozen Pre-Trial By The Government

Last week the Supreme Court further clarified the procedures and limits regarding the government’s ability to freeze assets in connection with criminal prosecutions. Following the 2014 decision in Kaley v. United States, where the Court ruled (in the government’s favor) that a defendant could not challenge the legality of a pre-trial asset seizure by contesting … Continue Reading

Justice Department Launches New FCPA Pilot Program

The Department of Justice yesterday upped the ante in its efforts to encourage companies to self-report potential Foreign Corrupt Practices Act (“FCPA”) violations when it unveiled a one-year pilot program that includes carrots for companies who take the self-reporting route and sticks for those that don’t.  This announcement follows the Department’s recent emphasis on prosecuting individuals … Continue Reading

The Modern Slavery Act 2015 and Supply Chain Transparency

Introduction The Modern Slavery Act 2015 is new legislation introduced in the UK with the intention of combatting slavery and human trafficking.  Continuing the trend for legislation to have extra-territorial reach, as illustrated by the UK Bribery Act, it can apply to entities based outside of the UK. Of particular importance to businesses is Section 54. … Continue Reading

Second Circuit Rejects Riley Appeal over Personal-Benefit Standard for Insider Trading

The Second Circuit last week affirmed the conviction of a former corporate executive on charges of insider trading.  The court’s unpublished decision on January 14 in United States v. Riley held that the Government had adduced sufficient evidence that the defendant had received a personal benefit – in the form of investment advice – in exchange … Continue Reading

Supreme Court to Review Insider-Trading Decision on Personal Benefit

The Supreme Court agreed today to review the Court of Appeals for the Ninth Circuit’s decision concerning the “personal benefit” required to establish a claim for insider trading.  The grant of certiorari in Salman v. United States (No. 15-628) could resolve a possible split between the Ninth Circuit and the Second Circuit on the type of … Continue Reading

ARB Rules That Secret Recording of Workplace Conversations Can Be Protected Whistleblowing Activity

On September 28, 2015, the U.S. Department of Labor Administrative Review Board (“ARB”) held that the recording of workplace conversations can be protected whistleblower activity under the Energy Reorganization Act of 1974 (“ERA”).  Franchini v. Argonne National Laboratory, ARB Case No. 13-081 (Sep. 28, 2015).… Continue Reading

Third Circuit Decision Could Have Broad Implications For Sentencing In Federal Fraud Cases

Last week, the Third Circuit issued a decision that could have major ramifications for sentencing in federal fraud cases. United States v. Nagle dealt with a fraud perpetrated against the Department of Transportation’s Disadvantaged Business Enterprise (“DBE”) program. The DBE program requires states that receive federal transportation funds to set goals for the awarding of … Continue Reading

Supreme Court Denies Review of Second Circuit Insider-Trading Case

The Supreme Court today refused to grant review of the Second Circuit’s restrictive insider-trading decision in United States v. Newman.  The Government, through the Solicitor General, had asked the Supreme Court to clarify the nature of the “personal benefit” that a tipper must receive in order to create liability for insider trading.  But the Supreme … Continue Reading

D.C. Circuit Joins Seventh Circuit in Rejecting Court Challenges to Pending SEC Administrative Enforcement Proceedings

The U.S. Court of Appeals for the District of Columbia Circuit held today that federal District Courts do not have subject-matter jurisdiction to entertain challenges to ongoing SEC administrative enforcement proceedings. A party to a pending administrative proceeding must defend against that proceeding and then seek review from the SEC Commissioners and, eventually, the federal … Continue Reading

Justice Department Prioritizes Prosecution of Individuals for Corporate Misconduct in New Guidance

After prolonged criticism over its lack of prosecution of individuals responsible for corporate misconduct, the Justice Department has issued new internal guidance that makes clear that prosecuting individuals in white collar cases is a high priority and should be considered at the very early stages of a corporate misconduct investigation. … Continue Reading

Scope of Attorney-Client Privilege And Work Product Doctrine In Internal Investigations Clarified

The scope of the attorney-client privilege and work product doctrine for internal investigation reports has once again been clarified by the D.C. Circuit in a False Claims Act case against defense contractor KBR, Inc.  In its most recent decision, the D.C. Circuit rejected whistleblower Harry Barko’s arguments that KBR’s internal investigation documents were rendered discoverable … Continue Reading

Government Seeks Supreme Court Review In Second Circuit Insider-Trading Case

After months of will-he-or-won’t-he speculation about whether the U.S. Solicitor General would ask the Supreme Court to review the Second Circuit’s restrictive insider-trading decision in United States v. Newman, the question has now been answered. The Government filed a certiorari petition on July 30, 2015 asking the Supreme Court to clarify the nature of the “personal … Continue Reading

Louis Berger International Pays $17 Million Penalty for FCPA Violation

On July 17, 2015, Louis Berger International, Inc., a New Jersey-based construction management company, entered into a deferred prosecution agreement (DPA) with the Department of Justice under which it agreed to pay a $17.1 million penalty for violating the Foreign Corrupt Practices Act (FCPA). In addition to the hefty penalty paid, the company agreed to … Continue Reading

9th Circuit’s Insider-Trading Decision in US v. Salman

The U.S. Court of Appeals for the Ninth Circuit appears to have rebuffed aspects of the Second Circuit’s recent effort to narrow liability for insider trading. The Ninth Circuit’s decision today in United States v. Salman holds that insiders can engage in insider trading if they disclose material nonpublic information with the intent to benefit … Continue Reading

DOJ Breaks its Silence in 2015 FCPA Enforcement

Last week, the DOJ announced its first corporate enforcement action under the Foreign Corrupt Practice Act (“FCPA”) for 2015. IAP World Services, Inc., a Florida-based defense and government contractor, agreed to pay $7.1 million in a non-prosecution agreement (NPA) for conspiring to bribe Kuwaiti officials in exchange for a contract to build a large-scale homeland … Continue Reading

U.S. Supreme Court Rejects Indefinite Tolling of False Claims Act under Wartime Suspension of Limitations Act; Holds First-to-File Bar Only Applies to Pending Cases

Yesterday, in Kellogg Brown & Root Services, Inc., et al. v. United States ex rel. Carter, 575 U.S. __ (2015), the Supreme Court settled two important questions under the False Claims Act (the FCA).  In a unanimous decision authored by Justice Alito, the Court held: (1) the Wartime Suspension of Limitations Act (WSLA) applies only … Continue Reading

Texas Supreme Court: Companies Shielded from Defamation Claims for Statements in Internal Investigation Reports

Last week, the Texas Supreme Court joined the majority of jurisdictions in holding that a company enjoys an absolute privilege when providing the Department of Justice (DOJ) with an internal investigation report containing statements later alleged by an employee to be defamatory. The decision in Shell Oil Co. v. Writt, __S.W.3d__ (Tex. 2015) should provide … Continue Reading

Head Of Criminal Division Speaks On Corporate Cooperation

Leslie Caldwell, head of the Justice Department’s Criminal Division, is, in her own words, “pounding the pavement on cooperation and transparency.”  Speaking on Tuesday at the New York City Bar’s fourth annual White Collar Crime Institute in Manhattan, Caldwell took another opportunity to discuss what the government expects of companies that seek to cooperate with criminal … Continue Reading

Another Insider-Trading Case Survives Newman Scrutiny

Another insider-trading case has survived a motion to dismiss under the more stringent standards that the Second Circuit adopted last year in United States v. Newman.  On May 12, 2015, a federal District Court in Massachusetts declined to dismiss the indictments in United States v. McPhail and held that the Government had alleged sufficient facts showing … Continue Reading

CFTC Whistleblower Awards On The Horizon

In a recent interview with Law360 (subscription required), Chris Ehrman, the Director of the U.S. Commodity Futures Trading Commission’s Whistleblower Office, predicted that the number and size of the CFTC’s whistleblower awards will increase in the near future. Ehrman also said that the agency will conduct “straight marketing” to ensure that potential whistleblowers are aware … Continue Reading

Mark Harris Speaks with Compliance Week on Proposed Changes to Sentencing Guidelines

Mark Harris, a partner in Proskauer’s White Collar Defense and Investigations Group, recently spoke to Joe Mont at Compliance Week to discuss the U.S. Sentencing Commission’s proposed changes to the guidelines for punishment of white collar crime.  Besides his ongoing focus on white collar sentencing in his legal practice, Harris serves as a member of … Continue Reading
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