The Second Circuit recently took an unexpected plunge into the torrid waters of insider trading law. Following several years of decisions limiting the government’s broad interpretation of what constitutes a
Continue Reading United States v. Blaszczak: Second Circuit Ruling Creates Opening for Significant Increase in Insider Trading Prosecutions

The C-Suite rarely wants to consider, much less worry about, the impacts of criminal conduct on their business. The reality is, however, companies can and do get pulled into criminal and quasi-criminal enforcement actions as both victims and (albeit unintentional) perpetrators. Two areas of criminal conduct that perhaps do not receive the amount of C-Suite attention they deserve are internal trade secret theft and human trafficking.
Continue Reading How to Prevent or Defend Against Business Crimes, including Trade Secrets and Human Trafficking

Once again, the Department of Justice’s (DOJ) efforts to hold a trader accountable for misrepresentations made during negotiations met with stiff resistance from the courts. On March 4, 2019, Judge Charles Breyer of the Northern District of California granted Robert Bogucki’s motion to dismiss the indictment in the middle of his criminal trial, ruling that the Government failed to prove that Bogucki’s statements could not possibly amount to fraud because there is no expectation of truth in the discussions between Bogucki and his customer. Judge Breyer’s ruling parallels the Second Circuit’s highly publicized 2018 repudiation of the DOJ’s attempts to prosecute Jessie Litvak, a former bond trader, for similar misrepresentations made in connection with trading residential mortgage-backed securities.
Continue Reading “Nanny” Government Rebuffed in Prosecution of Former Barclays Trader

In 2012, the Penn State Lions went 8-4 on the field, passing 3,283 yards, rushing 740 yards, and scoring 349 points. This credible performance earned it a respectable 38th ranking out of the 124 schools in the NCAA’s Division I Football Bowl Subdivision. But few will remember Penn State’s athletic performance in 2012. What people will remember instead is that 2012 was the year the University’s Special Investigative Counsel issued its report into the actions of Penn State Coach Gerald Sandusky.
Continue Reading From the Big Easy to the Big Ten, And Beyond: What the Process of Reforming the New Orleans Police Department Can Teach Colleges and Universities

In a news conference May 6, President Obama addressed recently announced rules and proposed regulations intended to help the U.S. fight tax evasion and other crimes connected to anonymous offshore companies and accounts.  The announcements come after a month of intense review by the administration following the first release of the so-called Panama Papers, millions of documents stolen or leaked from Panamanian law firm Mossack, Fonseca.  The papers have revealed a who’s who of international politicians, business leaders, sports figures and celebrities involved with financial transactions accomplished through anonymous shell corporations.
Continue Reading In Wake of Panama Papers Scandal Obama Calls for Stricter Bank Regulations, Tax Rules

On June 16, 2015, IAP Worldwide Services Inc., a private defense and government contracting company, agreed to pay $7.1 million to settle criminal charges under the U.S. Foreign Corrupt Practices Act (“FCPA”) related to bribing Kuwaiti government officials to secure a Kuwaiti government contract. On the same day, James Michael Rama, IAP’s former Vice President of Special Projects and Programs, also pleaded guilty to FCPA charges. For U.S. Government contractors, the opportunities to provide services and expertise to foreign governments are lucrative, but this enforcement action also highlights the risks associated with obtaining such contracts.
Continue Reading Government Contracting Abroad: Beware Compliance Risks

On December 10, 2013, the U.S. Court of Appeals for the Ninth Circuit denied a request for a rehearing en banc in United States v. Olsen, 2013 WL 6487376 (9th Cir. 2013) (ord. denying reh’g en banc).  The defendant, Kenneth Olsen, sought to vacate, set aside, or correct his sentence on grounds that the Government had committed a Brady violation by failing to divulge evidence that called into question the integrity of the lab analyst who determined that Olsen had laced allergy pills with ricin.  The Government had used the lab analyst’s testimony to convict Olsen of developing ricin for use as a weapon in violation of 18 U.S.C. § 175.
Continue Reading Chief Judge Kozinski’s Ninth Circuit Dissent in U.S. v. Olsen Offers Hope that Courts Will Keep Prosecutors Honest

By Alison Kleaver and Joseph Barton

One of the goals of the Foreign Corrupt Practices Act (“FCPA”) is to prevent U.S. companies and individuals from paying bribes to foreign officials in exchange for business. To this end, the FCPA prohibits any domestic individual or business entity from making payments to a “foreign official” for the purpose of obtaining or retaining business. 15 U.S.C. § 78dd-2(a)(1). However, who, precisely, qualifies as a “foreign official” is the subject of much uncertainty. In particular, whether employees of a state-owned company qualify as foreign officials for purposes of FCPA is an area of great concern—and potential liability—particularly for U.S. companies doing business in Latin America where governments often have at least some level of involvement in various business sectors from education to utilities to health care.


Continue Reading Meaning Of FCPA’s “Foreign Official” Causes Uncertainty For Companies Doing Business Abroad

By Thaddeus McBride & Cheryl Palmeri

On October 26, 2011, Joel Esquenazi was sentenced to 15 years in prison for committing and conspiring to commit both money laundering and violations of the Foreign Corrupt Practices Act (“FCPA”). Esquenazi is the former president of Terra Telecommunications Corporation (“Terra”), an international telecommunications company. According to the U.S. Department of Justice (“DOJ”), this is the longest prison sentence yet imposed in a case involving the FCPA.


Continue Reading Longest Prison Sentence Yet in FCPA Case

By Thaddeus McBride and Reid Whitten

On April 20, 2011, in a prosecution brought against Lindsey Manufacturing Company (“Lindsey”) and several of its officers and employees, a U.S. Federal District Court Judge ruled that the term “instrumentalities” applies to foreign state-owned enterprises under the Foreign Corrupt Practices Act (“FCPA”). Under this broad ruling, any employee or officer of a foreign state-owned enterprise would be considered a “foreign official” under the FCPA.
 


Continue Reading Federal Judge Upholds DOJ’s Expansive Application Of FCPA