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White Collar
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May 16, 2012
Gupta Loses Bid To Keep Rajaratnam Wiretap From Jury
A federal judge on Wednesday refused former Goldman Sachs Group Inc. director Rajat Gupta's request to exclude a wiretapped conversation between him and jailed hedge fund founder Raj Rajaratnam from his upcoming trial on insider-trading-related charges.
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May 16, 2012
Hedge Fund Hit With $800M Suit Over Inflated Valuations
An offshore hedge fund that went bust after its now-indicted manager allegedly conspired to overvalue its holdings was hit with a proposed class action Monday in New York by investors seeking to recoup $800 million in losses.
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May 16, 2012
2nd Circ. Says NYU Properly Denied MBA To Insider Trader
New York University's Stern School of Business acted appropriately when it declined to award a Master of Business Administration degree to a student convicted for insider trading, the Second Circuit ruled Wednesday.
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May 16, 2012
Rothstein Kass Gets OK For $1.4M Ponzi Suit Settlement
A California federal judge on Wednesday approved most of a $1.4 million settlement between auditing firm Rothstein Kass & Co. PC and a class of investors over hedge fund investments in Ponzi schemes run by Thomas J. Petters and Bernie Madoff.
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May 16, 2012
Covington Snags FCPA, International Trade Pro For UK Office
Covington & Burling LLP has added to its European anti-corruption and trade control practices by luring a Steptoe & Johnson LLP partner who has extensive experience with the Foreign Corrupt Practices Act and global bribery laws to its London office, the firm said Wednesday.
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May 16, 2012
McNamee Tells Jury Clemens And Canseco Discussed Steroids
Roger Clemens’ former strength coach Brian McNamee admitted Wednesday in Washington federal court that he had no physical evidence the pitcher used steroids prior to 1998, but said he had overheard Clemens and ex-teammate Jose Canseco discuss the subject earlier that year.
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May 16, 2012
Last Dewey Leader Calls It Quits As Partner Exits Continue
The final member of Dewey & LeBoeuf LLP’s Office of the Chairman bowed out Wednesday, leaving for Arnold & Porter LLP, making room for the struggling firm’s general counsel to step in in order to wind down the day-to-day operations.
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May 15, 2012
ABN Amro, Other Madoff Funds To Get Review By NY Judge
A New York federal judge on Tuesday agreed to review a slew of cases against Bernard Madoff feeder funds, as well as ABN Amro Bank (Ireland) Ltd., in order to consider tax and securities issues contained within them that involve nonbankruptcy law.
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May 15, 2012
Freight Manager Gets 6 Months For Illegal Iran Exports
A former manager with a Netherlands-based freight-forwarding company who was part of a conspiracy to illegally export spray paint coatings and other goods to Iran was sentenced in New Jersey federal court on Tuesday to six months in prison.
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May 15, 2012
Clemens Trainer Tells Jury He Saved Steroid Evidence
Although strength coach Brian McNamee had a close relationship with his premier client, Roger Clemens, he saved evidence of the pitcher's performance-enhancing drug use to ensure his credibility if their illegal actions ever came to light, the trainer told the jury in Clemens' perjury trial Tuesday.
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May 15, 2012
Fishing Co. Still On Hook In $24M Pollution Suit
A federal judge in Washington on Monday refused to toss out criminal charges lodged against commercial fishing company Sanford Ltd. for allegedly discharging oil-contaminated sludge into the ocean, leaving the shipper on the hook for $24 million worth of illegal pollution activity.
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May 15, 2012
5th Circ. Upholds Wastewater Cos.' Convictions In CWA Case
The Fifth Circuit on Tuesday affirmed the Clean Water Act and permit violation convictions and sentences of wastewater treatment provider Jeffrey Pruett and his two companies, ruling on a question of first impression that only ordinary negligence is required for criminal penalties tied to negligent violations of CWA permits.
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May 15, 2012
K&L Gates Malpractice Suit Over Le-Nature's Scam Revived
A Pennsylvania appeals court on Monday revived the Le-Nature's Inc. liquidating trustee's $500 million malpractice suit against law firm K&L Gates LLP for failing to uncover during its internal investigation the massive fraud that brought the company down and landed its CEO in prison.
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May 15, 2012
Temple Settles With Feds Over Bogus Health Billing Allegations
Temple University in Philadelphia will pay more than $400,000 to settle allegations of health care fraud involving a convicted eye doctor and plastic surgeons on the campus payroll, federal prosecutors said Tuesday.
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May 15, 2012
DOJ Launches Probe Into JPMorgan's $2B Trading Loss
The U.S. Department of Justice has opened an investigation into JPMorgan Chase & Co.'s $2 billion trading loss, as shareholders refused calls Tuesday to strip CEO Jamie Dimon of his title as chairman of the board.
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May 15, 2012
High Court Won't Review Ponzi Schemer's 50-Year Sentence
The U.S. Supreme Court on Monday denied convicted Ponzi schemer Thomas J. Petters’ request for a rehearing of his appeal after he was sentenced in April 2010 to 50 years in prison for his alleged $3.7 billion fraud.
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May 15, 2012
Gupta Got $4M JV Boost For Tipping Rajaratnam, Feds Say
Rajat Gupta, the former Goldman Sachs Group Inc. director facing insider trading-related charges, received a $4 million increase to his stake in a joint investment with hedge fund founder Raj Rajaratnam shortly after giving Rajaratnam an illicit tip, prosecutors said Monday.
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May 15, 2012
News Corp. Hacking Probe Yields Charges For Rebekah Brooks
British prosecutors on Tuesday brought criminal charges against former News of the World editor Rebekah Brooks, her husband and four others in connection with a phone hacking scandal that has threatened to topple Rupert Murdoch’s News Corp. empire.
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May 14, 2012
AUO Exec Says DOJ Overreaching In Bid To Bar Hogan Atty
Convicted AU Optronics Corp. executive Hui Hsiung accused the government Monday of overstating the reach of ethics law to bar him from hiring Hogan Lovells attorney Neal Katyal even though the former acting solicitor general worked not on the price-fixing prosecution but on a related appeal.
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May 14, 2012
Atty Charged With Swiping $3M From Oil Scheme Investors
A Dallas-area attorney has been indicted for allegedly stealing $2.8 million from investors in his oil and gas scheme and for failing to tell them he had been the target of suits accusing him of federal and state securities violations.
Expert Analysis
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Pottage V. FSA — A Welcome Decision For UK Bank Execs
The recent U.K. Upper Tribunal decision in Pottage v. Financial Services Authority makes clear that senior managers working in business and risk management functions are expected to act reasonably on the timing of reviews and the appropriate responses to business issues — and should not be held personally culpable in the absence of clear evidence to the contrary, say attorneys with Skadden Arps Slate Meagher & Flom LLP.
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Plea Agreements With Antitrust Division Post-VandeBrake
If it is not an abuse of discretion for a trial judge to apply whichever sentencing guideline he prefers — as in the Eighth Circuit's decision in the VandeBrake case — then it becomes much more palatable for a defendant to roll the dice at trial rather than taking his chances that a judge will impose the sentence in a plea deal, say Brady Dugan and Diana Gillis of Akin Gump Strauss Hauer & Feld LLP.
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Limiting The Application Of The CFAA And EEA
After U.S. v. Nosal and U.S. v. Aleynikov, we can expect that prosecutors at least in the Ninth Circuit may be more conservative in their application of the Computer Fraud and Abuse Act, limiting CFAA prosecutions to hackers, and that courts in the Second Circuit and elsewhere may apply limits to the Economic Espionage Act as well, say Robyn Crowther and Benjamin Au of Caldwell Leslie & Proctor PC.
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The Latest FCPA Target: Private Fund Advisers
The U.S. Securities and Exchange Commission's Foreign Corrupt Practices Act case against a former Morgan Stanley executive — the first FCPA case involving a private fund investment adviser — reemphasizes to investment firms the importance of establishing effective anti-corruption internal controls in protecting both the entity and individual personnel from such enforcement, say attorneys with Ropes & Gray LLP.
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What Companies Can Learn From AU Optronics
The U.S. v. AU Optronics Corp. case demonstrated that the U.S. Department of Justice can successfully prosecute non-U.S. corporate and individual members of a global cartel. The verdicts provide a number of important lessons about the risks and rewards of forcing the government to prove its case in court, say John Majoras and Ryan Thomas of Jones Day.
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Where Rubber Hits Road: Examples Of Alternative Fees
Creating new approaches to fee agreements is something to embrace rather than fear — and when structured and managed correctly, it can be financially advantageous. Take, for example, fixed-fee arrangements, result-based billing and portfolio billing, say Bill Rudnick and Keith Maziarek of DLA Piper.
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FCA Cases May Be Lurking Within CMS Refund Obligation
The U.S. Center for Medicare and Medicaid Services has published a proposed rule implementing a section of the Patient Protection and Accountable Care Act that requires providers to report and repay Medicare and Medicaid overpayments within a set period. As-is, the CMS proposal leaves open a maze of questions that affect False Claims Act liability, say Robert Hauberg and Jonell Beeler of Baker Donelson Bearman Caldwell & Berkowitz PC.
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Lessons From Review Of UK Banks' Anti-Bribery Systems
Although the U.K. Financial Services Authority's recent review of anti-bribery and corruption systems at investment banks was critical of the investment banks’ systems in a number of respects, the FSA has provided valuable pointers for all financial firms — not just investment banks, say Karolos Seeger, Matthew Getz and Warren Balakrishnan of Debevoise & Plimpton LLP.
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Reducing Corruption Risk By Disrupting Moral Hazard
Controlling "moral hazard" — a phenomenon inherent in third-party business relationships — is a key factor in efforts to counter corruption. Yet, moral hazard is seldom addressed or discussed by anti-corruption professionals in the context of mitigating the risk of a regulatory event, say Glenn Ware and Shanti Salas of PwC and Suzanne Folsom of Academi.
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Dismissing FCA Cases Over Relators' Objections
The Tenth Circuit's recent decision in U.S. ex rel. Wickliffe v. EMC Corp. highlights a tool rarely used by the government in qui tam actions brought under the federal False Claims Act — dismissing the case over a relator’s objection — and provides guidance to approaches defense counsel may take with regard to this powerful procedural tool, say Lawrence Kraus and Christina Taylor of Foley & Lardner LLP.