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Government Enforcement Exposed - "The GEE"
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25 Jun 2015 U.S. v. Sigelman: Another FCPA Enforcement Setback for the DOJ

On Monday, June 15, 2015, the criminal trial of Joseph Sigelman, a former co-chief executive of PetroTiger Ltd. came to an abrupt end when he pleaded guilty to a single count of conspiracy and, the following day, received a sentence of probation. Mr. Sigelman had faced a potential 20-year sentence for charges including alleged violations of the Foreign Corrupt Practices Act (FCPA). All charges except the guilty plea to a single count of conspiracy to violate the FCPA were dropped as a result of the plea. While the sudden conclusion to the Sigelman trial appears to have been brought on by a witness’s surprise change in testimony, it certainly appears to be the latest in a series of setbacks for the DOJ in its efforts…

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23 Jun 2015 FALSE CLAIMS ACT: INCREASED PROSECUTIONS AND HIGHER SENTENCES

As Assistant Attorney General Leslie R. Caldwell warned last September, the Department of Justice has increased its “commitment to criminal investigations and prosecutions that stem from allegations in False Claims Act lawsuits.” The continued rise in criminal FCA investigations, combined with substantial sentences received by those Defendants, show that Caldwell’s pronouncement was not an empty promise. Recent cases exemplify a clear intent by DOJ to continue aggressive investigation and prosecution of FCA matters. When convictions are obtained, the government has sought and obtained significant sentences against both institutional and individual wrongdoers.   Riverside General Hospital (Riverside) in Houston, Texas, is one of the more recent examples of this increased prosecutorial fervor toward FCA violations in the healthcare arena. On June 9, 2015, the former President…

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19 Jun 2015 The MCDC Orders: Everything is material

Pursuant to Rule 15c2-12 under the 1934 Act, official statements for municipal securities offerings are to contain a description of any time in the prior five years when the issuer failed to comply, “in all material respects,” with prior contractual commitments to provide continuing financial and operational disclosures. The SEC’s Division of Enforcement has taken the position that a failure to disclose such instances of material non-compliance in an official statement violates the federal securities laws.   In March 2014, the Division announced the Municipalities Continuing Disclosure Cooperation (MCDC) Initiative pursuant to which issuers and underwriters could obtain favorable settlement terms if they self-reported to the Division of Enforcement any instances in which there had been a materially inaccurate statement in a final official statement…

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08 Jun 2015 Justice Department Guidelines Seek to Focus Enforcement of Structuring Law on Most Serious Cases

Prosecutorial discretion is a powerful and necessary component of our justice system. Prosecutors exercise charging decisions with few limits and often use their charging discretion to extract valuable information from targets. Nevertheless, the Department of Justice (DOJ) has recently implemented a number of high-profile initiatives aimed at directing the exercise of prosecutorial discretion in a manner that focuses enforcement actions on the most serious violations of federal law.   One of the DOJ’s initiatives limits the use of asset forfeiture in connection with the federal structuring law found at 31 U.S.C. § 5324. The Bank Secrecy Act requires banks to report cash transactions over $10,000. The structuring law prohibits individuals from structuring banking transactions in order to evade that reporting requirement. Congress passed the law…

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05 Jun 2015 CFTC and CME Collaborate to Chase Alleged Spoofers

The Commodity Futures Trading Commission’s (CFTC) ongoing use of its new anti-spoofing authority (Section 4c(a)(5)(C) of the Commodity Exchange Act) demonstrates a heightened awareness by exchanges of efforts by market participants to rapidly enter and cancel trades in order to manipulate market prices. In May 2015, the CFTC filed a complaint (Complaint) in the Southern District of New York against two traders who allegedly engaged in spoofing by layering trades in the Gold and Silver futures on the Commodity Exchange, Inc. (COMEX). The case is noteworthy for several reasons.   The Complaint alleges that defendants Heet Khara and Nasim Salim “entered orders or layered multiple orders to encourage market participants to trade opposite … smaller orders on the opposite side of the book.”  Once the…

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