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Government Enforcement Exposed - "The GEE"
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23 Dec 2014 CRIMINAL INSIDER TRADING CONVICTIONS OVERTURNED IN FAR-REACHING RULING

In a stunning reversal that threatens Southern District of New York U.S. Attorney Preet Bharara’s signature achievement, the Second Circuit recently reversed the insider-trading convictions of former hedge fund managers Todd Newman and Anthony Chiasson. Over the last seven years, Bharara’s office has secured more than 80 convictions for insider trading. Many of those may now be imperiled by the appellate court’s decision, which appears to substantially raise the bar for what most be proved in an insider trading case.   Newman and Chiasson were “remote tippees,” individuals who allegedly received material inside information indirectly, and often several steps removed, from corporate insiders. Remote tippees were part of Mr. Bharara’s effort to aggressively push the envelope with respect to who might be liable for insider…

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22 Dec 2014 Still Waiting: House of Representatives Over-Criminalization Task Force Report

Over the past six months, we have been keeping a watchful eye on the U.S. House of Representatives Over-Criminalization Task Force and awaiting the results of their efforts. Since June 2013, the Task Force has held eight hearings to discuss a wide array of topics and to obtain expert testimony pertaining to the federal criminal code and the consequences of this country’s perpetually expanding federal criminal laws. The Task Force concluded its proceedings in early August 2014, but a report has not yet been issued. As we await the report, we anticipate some very interesting observations and recommendations from the Task Force – recommendations that may have a significant impact on the federal criminal landscape.   In its first session in June 2013, the Task…

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15 Dec 2014 DOJ Offers Opinion on Successor Liability Under FCPA

The Department of Justice recently issued Opinion Release 14-02, its second release of the year regarding the Foreign Corrupt Practices Act, and it offers valuable insight for any U.S. company looking to merge with or acquire a foreign entity. The opinion request came from a U.S. consumer products company that intends to acquire a foreign manufacturer with no direct sales or distribution contracts in the U.S. In the course of its pre-acquisition due diligence of the foreign company, the U.S. entity identified a number of likely improper payments to government officials, as well as substantial accounting and recordkeeping problems. In light of these identified concerns, the U.S. company set forth a plan to take remedial pre-acquisition measures and post-acquisition integration steps. The opinion request, however,…

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02 Dec 2014 Prosecutorial Over-criminalization: Fishing for Guilty Pleas

On November 5, 2014, the Supreme Court heard oral argument in a case involving a fisherman, Mr. Yates, who was convicted of violating the so-called “anti-shredding” provision of the Sarbanes-Oxley Act, which was passed in 2002 in the wake of the Enron scandal. The case arose from a 2007 search of the Miss Katie, Mr. Yates’ fishing vessel. A Florida state officer boarded the ship at sea and noticed fish that appeared less than 20 inches long, which was under the minimum legal size of grouper. The officer placed the smaller fish into a crate, issued Yates a citation, and ordered Yates to take the crate to port for seizure.   Instead, Yates ordered his crew to throw some of the smaller fish overboard. Officials…

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