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Government Enforcement Exposed - "The GEE"
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24 Mar 2016 The Best Policy: Fifth Circuit Finds Prosecutorial Misconduct and Vindictiveness

  Giving credence to the adage that honesty is the best policy, a panel from the Fifth Circuit Court of Appeals in United States v. Dvorin affirmed the district court’s finding that the lead prosecutor “exhibited a reckless disregard for her duties and conducted the proceedings in an irresponsible manner” during a bank fraud prosecution by withholding material evidence concerning the credibility of a key government witness, and also by knowingly using false testimony to obtain a conviction. The panel also found that the government failed to overcome the presumption of prosecutorial vindictiveness because it added an additional forfeiture notice once forced to retry the case as a result of prosecutorial misconduct during the first trial.   In 2012, a grand jury indicted Jason Dvorin…

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23 Mar 2016 A New Approach: DOJ Antitrust Division in Wake of Yates Memo

  For more than five years, the Department of Justice’s (DOJ) Antitrust Division and the FBI have had the automotive parts industry under a microscope. In September 2015, the DOJ announced it would undertake a policy shift to focus more ardently on the investigation and prosecution of individuals responsible for company misconduct. This new policy shift may already be influencing the manner in which the Antitrust Division is conducting criminal investigations.   The ongoing federal investigation into price fixing, bid rigging, and other anticompetitive conduct has netted at least 38 corporate convictions, 58 indictments of corporate executives, and approximately $2.6 billion in criminal fines. Most recently, INOAC Corp., an auto parts supplier and major player in the advanced materials industry, pled guilty for conspiring to…

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10 Mar 2016 Watch What You Write, Watch What You Say

  While market manipulation cases typically involve circumstantial evidence, prosecutors are finding more sophisticated ways to get defendants’ direct statements into evidence. In market fraud cases, government prosecutors are required to prove a defendant’s state of mind (the criminal intent component of a case). Historically, they have done so based on what the defendant did under specific circumstances—something referred to as “circumstantial evidence.” For example, an insider trading case may turn on the circumstance that a corporate insider had earnings information on the date she sold large quantities of corporate stock. Or, a market manipulation case may turn on the trades a defendant entered into after receiving a specific phone call.   Another significant component of such cases is the defendant’s own notes and comments….

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08 Mar 2016 DOJ Leaves Much Unsaid After Announcing Need for Corporate Certifications to Finalize Settlements

  On Feb. 4, the Department of Justice’s (DOJ) Fraud Section announced it will start requiring companies involved in white-collar crime investigations to “certify” that it has disclosed all information regarding individuals involved in the alleged misconduct. According to the Wall Street Journal, this corporate certification will be required before the DOJ will finalize a settlement agreement with a company. The new certification process is still in the “development” stage, “according to the department, but it could be a written certification.” While the U.S. Attorney Manual already requires companies “identify all individuals involved in the misconduct” and disclose “all facts relating to the misconduct;” it does not require a formal, written certification as a prerequisite to finalize a settlement. See U.S.A.M. § 9-28.700.   The…

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07 Mar 2016 SEC Busts Tech Company for Bribing Chinese Officials

  On Feb. 16, the SEC announced settlement of parallel civil and criminal actions involving violations of the Foreign Corrupt Practices Act (FCPA) by Massachusetts-based tech company PTC, Inc. As part of the agreement, PTC and two Chinese subsidiaries agreed to pay more than $28 million in fines, interest and disgorgement for providing Chinese officials with vacations, improper gifts and entertainment that were disguised as legitimate business expenses. Specifically, PTC agreed to pay $13.6 million in disgorgement ($11.858 million) plus interest ($1.764 million) while its two Chinese subsidiaries agreed to pay a $14.54 million fine as part of a non-prosecution agreement.   In related action, the SEC also announced its first deferred prosecution agreement (DPA) with an individual involved in an FCPA investigation. Yu Kai…

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