Civil Procedure Administrative Agency Criminal Law

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The Meaning of “Malfeasance in Office” and the Lifetime Ban to Holding Office it Carries

The California Attorney General concluded in a recent opinion that the City of Commerce has the right to sue a sitting city councilmember convicted of a crime to test if he has the right to hold office. The Attorney General...more

U.S. Chamber of Commerce Joins Chorus Pushing For Overhaul in SEC Enforcement Practices

A recent report by the Center for Capital Markets Competitiveness at the U.S. Chamber of Commerce (Chamber Report) regarding the enforcement program of the Securities and Exchange Commission (SEC or Commission) identified...more

The evolving nature of legal risk: Legal risk, as we once understood it, is changing. Companies need to be prepared to respond...

Over the past decade, many of the legal risks facing companies under US law have narrowed dramatically while others have proliferated. The advent of streaming news and social media means that local issues can become global...more

Supreme Court Decides Mata v. Lynch

On June 15, 2015, the United States Supreme Court decided Mata v. Lynch, No. 14-185, holding that federal courts of appeals have jurisdiction to review the Board of Immigration Appeals’ (Board) rejection of an alien’s motion...more

Texas Supreme Court: Companies Shielded from Defamation Claims for Statements in Internal Investigation Reports

Last week, the Texas Supreme Court joined the majority of jurisdictions in holding that a company enjoys an absolute privilege when providing the Department of Justice (DOJ) with an internal investigation report containing...more

Powers of Regulators Brought Into the Spotlight by High Court Decision - Australian Communications and Media Authority v Today FM...

Recently the High Court of Australia handed down its unanimous decision in Australian Communications and Media Authority v Today FM (Sydney) Pty Ltd [2015] HCA 7 (HCA Decision) which relates to the powers of the Australian...more

International Fraud & Asset Tracing (3rd Edition), United States

In this Guide: - Introduction - Managing the Internal Investigation - Disclosure from Third Parties - Steps to Preserve Assets/Documents - Civil Proceedings - Anti-Bribery/Anti-Corruption Legislation -...more

The Rule of Lenity: Should Courts Defer to Agency Interpretations of RESPA § 8?

On November 10, 2014, the U.S. Supreme Court denied a petition for a writ of certiorari in a case entitled Douglas F. Whitman v. United States. Whitman was seeking to have the Supreme Court review (and, hopefully, overturn)...more

Searching for Greener Pastures: SEC Insider Trading Enforcement in a Post-Newman Era

In United States v. Newman, the U.S. Court of Appeals for the Second Circuit dealt a substantial blow to federal prosecutors’ epic crackdown on insider trading by raising the bar for the government’s burden of proof in...more

SEC’s Authority to Interpret the Securities Laws Comes Under Fire in Criminal Enforcement

A recent statement by Justice Antonin Scalia accompanying the Supreme Court’s denial of certiorari in a criminal insider trading case raises fundamental questions about how the courts interpret the federal securities laws and...more

Corporate Responses to Investigative Requests by the Federal Government

In light of these new realities corporations face, the first step a company should take is to establish internal guidelines addressing interaction with government agents. Companies should have a response policy in place and...more

Argument Report: Illinois Supreme Court Appears Skeptical of Due Process Challenge to Liquor License Revocation

The Illinois Supreme Court appeared skeptical of a due process challenge to revocation of a liquor license during the recent oral argument in WISAM 1, d/b/a Sheridan Liquors v. Illinois Liquor Control Commission. ...more

What to Do When the Government Comes Calling – Interview with Peter Chavkin, Member, Mintz Levin

Attorney Peter Chavkin, Chair of Mintz Levin's White Collar Criminal Defense & Parallel Proceedings and Corporate Compliance & Internal Investigations Practices, discusses the steps individuals and companies should take when...more

The Mexican Anti-money Laundering Law

On October 17, 2012, Mexico's Ministry of Finance published the Federal Law for the Prevention and Identification of Transactions from Illegal Funds (Ley Federal para la Prevención e Identificación de Operaciones con Recursos de Procedencia Ilícita), commonly known as the “Money Laundering Law”.more

A Widening Circuit Split in the Interpretation of the Computer Fraud and Abuse Act

Introduction - The Computer Fraud and Abuse Act (CFAA) criminalizes unauthorized access to a private computer system and allows for individuals suffering harm from such conduct to bring private civil actions for relief. Congress originally enacted the CFAA asan anti-hacking statute, targeting third-party individuals accessing private computer systems without authority. Because the CFAA originally targeted third-party offenders, the language is unclear as to whether it applies to an employee who has authorized access to a computer, but then exceeds the scope of the authorized access and engages in the misuse or misappropriation of confidential information. Courts have had trouble applying the ambiguous language of the CFAA. The Circuit Courts of Appeals have not provided clear guidance regarding the interpretation of two important terms used in the CFAA; namely, "authorization" and "exceeds authorized access." A Narrow Interpretation of the Terms "Authorization" and "Exceeds Authorized Access" The United States Court of Appeals for the Ninth Circuit recently settled on a narrow interpretation of the terms "authorization" and "exceeds authorized access" in an en banc decision. In United States v. Nosal, an employee left an executive search firm to start his own competing business. Before leaving, the defendant convinced several former colleagues still employed by the firm to download source lists and to transfer the confidential information to him. The employees had authorized access to the database, but the firm had a policy that prohibited: (1) using confidential information for nonbusiness purposes and (2) transferring the information to third parties. The government indicted the defendant with aiding and abetting the employees in accessing a protected computer "without authorization," or "[exceeding] authorized access" with the intent to defraud. Please see full alert below for more information.more

AUDIT OF THE DRUG ENFORCEMENT ADMINISTRATION’S ADOPTIVE SEIZURE PROCESS AND STATUS OF RELATED EQUITABLE SHARING REQUESTS

EXECUTIVE SUMMARY of the OIG Report: During law enforcement operations, state and local law enforcement agencies often seize assets and proceeds from assets linked to criminal activity. The purpose of the seizures typically is to ensure that criminal organizations and individuals do not benefit from illegal activities. State and local law enforcement agencies may seek to have such assets forfeited under state law or, alternatively, agencies may transfer the seized assets to the Drug Enforcement Administration (DEA) or another component of the Department of Justice (DOJ or the Department) for forfeiture under federal law through the Department’s Asset Forfeiture Program. Transferred seizures are referred to as “adoptive” seizures because the federal agency adopts the seizures made by state and local law enforcement agencies. The DEA Agents Manual states that, in reviewing an adoption request from state or local law enforcement agencies, the DEA should take into consideration whether: •state law authorizes the transfer of the asset(s) to the federal government for forfeiture, •state law or procedures are inadequate or forfeiture experience is lacking in the state system, •the appropriate state or local prosecuting official has reviewed the case and declined to initiate forfeiture proceedings, •a "significant amount" (that is, an amount sufficient to warrant federal prosecution) of drugs is involved, and •the government is likely to be able to satisfy its requisite burden of proof that the asset is subject to forfeiture. Federal law authorizes the Department to share with state and local law enforcement agencies the property and proceeds from adoptive and joint seizures forfeited under federal law. This process is called equitable sharing. Any property or proceeds transferred to a state or local law enforcement agency must have a reasonable relationship to the degree of participation the agency had in the law enforcement effort that led to the seizure. Equitable sharing of seized property encourages cooperation among federal, state, and local law enforcement agencies. To receive an equitable share of seized property, a participating law enforcement agency must submit an equitable sharing request form to the federal agency processing the asset for forfeiture. Seized assets and equitable sharing requests are tracked in the Department’s Consolidated Assets Tracking System (CATS). The objective of our audit was to assess the design and implementation of the DEA’s adoptive seizure process. We selected the DEA Atlanta Division for testing because, within the DEA, the Atlanta Division processed the largest dollar value of adoptive seizures and testing at the Atlanta Division enabled us to make efficient use of time and cost resources. RESULTS IN BRIEF: We found that the DEA generally complied with its internal controls for adoptive seizures that we tested. The DEA’s adoptive seizure process was designed to ensure compliance with laws and regulations except that the process did not require the DEA to make and preserve records of adoption requests that it denied. Without these records, we could not assess whether the DEA made the appropriate decisions pertaining to denied adoptive seizure requests. We also found that the form published by the DOJ Criminal Division and submitted to the DEA by state and local law enforcement agencies to request a federal adoption should be revised. The revised form should provide DEA managers who approve adoption requests with more information about whether the state and local law enforcement agencies followed state forfeiture law, if required, before seeking a federal adoption. Nationwide, 9,035 equitable sharing requests estimated at $318.8 million were still in a “pending” (not paid) status for more than 4 years after the assets were seized. As a result of our audit, we make three recommendations to improve the DEA’s adoptive seizure process and the Department’s Asset Forfeiture Program. First, we recommend that the DEA implement procedures to create and maintain records pertaining to adoption requests that were denied and the reasons for the denial. Those records could consist of emails containing details about the seizures and the reasons the DEA denied the adoption requests. Second, we recommend that the DEA coordinate with the Criminal Division, Asset Forfeiture and Money Laundering Section, to modify the adoption request form to include questions pertaining to whether state and local law enforcement agencies followed state forfeiture laws, if applicable, before seeking a federal adoption. Finally, we recommend that the DEA coordinate with Justice Management Division’s Asset Forfeiture Management Staff regarding the need for a system to: (1) identify equitable sharing requests pending for more than 6 months after forfeiture and disposal actions are completed, and (2) ensure that the appropriate DOJ component updates CATS as necessary for each pendingmore

Qui Tam Relator Not Original Source; U.S. ex rel. Repko v. Guthrie Clinic

In U.S. ex rel. Repko v. Guthrie Clinic et al., the Third Circuit recently ended an attempt by Rodney Repko, former general counsel and executive vice president for Guthrie Healthcare System and its related entities, to bring a qui tam case against his former employer. After he left his job at Guthrie, Repko allegedly attempted to steal two million dollars by forging the name of Guthrie officials on loan documents. As part of a plea agreement to bank fraud charges, prosecutors required Repko to cooperate by “providing information concerning the unlawful activities of others.” more

D.C. Circuit Rejects Length of Purdue Executives’ Exclusion but Remands for Reconsideration

On July 27th, the U.S. Court of Appeals for the D.C. Circuit purportedly handed the Office of Inspector General for the Department of Health and Human Services (OIG) a loss in its bid to exclude Purdue Frederick Company (Purdue) executives from the federal health care programs for twelve years, based on their misdemeanor convictions for misbranding the painkiller OxyContin. Even so, the D.C. Circuit’s ruling should not be viewed as a long-term win for the executives because the court upheld the OIG’s right to permissively exclude the executives for a misdemeanor that did not require proof of intent and deferred to the OIG’s authority to assess aggravating factors to reach the twelve-year term of exclusion. The court merely held that the OIG failed to justify the unusual length of the exclusion in light of other permissive exclusion cases. On remand the OIG will have the opportunity to justify the term of exclusion. Overall, the opinion should be viewed as a win for the OIG, which is attempting to hold more individual managers and executives responsible for corporate behavior.more

FCPA Case Dismissed, But With Leave To Replead

Jonathan Strong v. Dean E. Taylor, et al. and Tidewater, Inc. (nominal Defendant), Civil Action No. 11-392 (E.D. La. 2012), addresses several international practice issues in the context of a motion to dismiss a derivative suit. As the District Court assumed for purposes of the motion to dismiss for failure to make a demand on the Board to investigate before suing, Tidewater renders offshore service vessels and marine support services to the global offshore energy industry. Tidewater provides these services in support of all phases of offshore exploration, field development, and production. Tidewater Marine International, Inc. (“TMII”) is a wholly-owned subsidiary of Tidewater. Tidewater does business in Nigeria and Azerbaijan through TMII. more

Arizona v. United States: Supreme Court Reaffirms Federal Government’s Power in Immigration Arena

In a 5-3 decision authored by Justice Kennedy, the Supreme Court struck down most of the main provisions of an Arizona law targeting illegal immigration. The law, known as the “Support Our Law Enforcement and Safe Neighborhoods Act” or “S.B. 1070,” codified Arizona’s policy of “attrition through enforcement.” This policy presumes that undocumented individuals will leave the United States in response to unfavorable or hostile laws. Four provisions of the law were at issue in this case: *Section 3, criminalizing the “willful failure to complete or carry an alien registration document …”...more

Arizona's Attempt To Crackdown On Immigration (Mostly) Rejected By Supreme Court

On June 25, 2012, the Supreme Court held that certain provisions of Arizona's immigration statute (signed into law in 2010) were preempted by federal immigration law. The preempted provisions include those making it a criminal offense for an undocumented worker to solicit, apply for, or perform work in the state; making it a misdemeanor for an individual to fail to comply with federal alien-registration requirements; and authorizing state and local officers to arrest persons who the officer has probable cause to believe has committed a public offense making the person removable from the United States. But the Court upheld the section requiring police officers to make a determination of the immigration status of any person stopped, detained, or arrested before the state courts had an opportunity to interpret the law and without a showing that its enforcement would conflict with federal immigration law and its objectives. The Court's decision today will impact pending cases involving U.S. Department of Justice (DOJ) challenges to other state immigration laws (including Alabama and South Carolina) currently in federal court. Please see full alert below for more information.more

Sleeping With the Enemy: Can Corporate Counsel Be “Too Cooperative” With the Government?

In 1999, then-United States Deputy Attorney General Eric Holder issued the “Holder Memorandum” – a document that has come to profoundly impact the way in which corporations conduct internal investigations and deal with the government in the face of misconduct allegations. The Holder Memorandum set forth specific factors to be considered in determining whether to file criminal charges against a corporation. Among them were “[t]he corporation’s timely and voluntary disclosure of wrongdoing and its willingness to cooperate in the investigation of its agents, including, if necessary, the waiver of the corporate attorney-client and work-product privileges.” Although the guidelines set forth in the Holder Memorandum have undergone several iterations, a corporation’s timely and voluntary disclosure of wrongdoing and its willingness to cooperate in the investigation of its agents remain factors to be considered by prosecutors in determining whether a corporation should be criminally charged. While the current guidelines provide that “[e]ligibility for cooperation credit is not predicated upon the waiver of attorney client privilege or work product protection,” they nevertheless provide that “the government's key measure of cooperation” is whether the corporation has timely disclosed “the relevant facts about the putative misconduct.” Please see full article below for more information. more

Advice of Counsel: An Effective Shield

Companies hire lawyers for a reason. Hopefully, they do so for more than one reason. Lawyers provide several important benefits, contrary to all the jokes and ridicule against the profession. The attorney-client privilege encourages confidential communications between business actors and attorneys. As the Supreme Court has stated, “[t]he purpose of the privilege is to encourage clients to make full disclosure to their attorneys.” In addition, assuming a business acts on the basis of the attorney’s advice, the client has an added protection under the law – an advice of counsel defense. more

Credit Crunch Digest -- March 2012

This digest collects and summarizes recent media reports regarding potential liability, government initiatives, litigation and regulatory actions arising from the subprime mortgage crisis and credit crunch, as well as the increasing number of reported cases of financial fraud. This issue focuses on the U.S. Department of Justice (DOJ) intent to bring criminal charges against banks and individuals with regard to mortgage-backed securities; the dismissal of Merrill Lynch from an auction rate securities action; settlement of the New York Mets’ Madoff case; the conviction of R. Allen Stanford; the result of the latest Federal Reserve stress tests; and resistance to the current funding proposal for the Office of Financial Research. Litigation and Regulatory Investigations: *Bank of America Challenges MBIA Discovery Tactics *Department of Justice Signals Uptick in Financial Crisis Criminal Actions *Federal Judge Finds ARS Disclosures Adequate; Dismisses Claims Against Merrill Lynch and Investment Adviser Fraud and Ponzi Schemes *Game Over – Mets Strike a Deal with Picard for $162 Million *Stanford Found Guilty on Charges of Fraud and Conspiracy Government and Regulatory Intervention *Latest Stress Test on Big Banks Yields Mostly Positive Results *Banks Oppose Funding New Regulatory Agency Please see full digest below for more information. more

Spotlight on the Economic Espionage Act

When the Economic Espionage Act (“EEA”) was passed in 1996, it was hailed as a much-needed remedy to combat the growing threat to the United States’ national and economic security posed by efforts, largely foreign, to steal proprietary information by criminalizing such behavior. E.g., S. Rep. No. 104-359 (1996). The federal government believes that this threat is very much alive today. As noted by Senator Kohl last March, “trade secret theft and economic espionage continue to pose a threat to U.S. companies to the tune of billions of dollars a year.” 157 Cong. Rec. S1978 (daily ed. Mar. 30, 2011). Reinforcing this sentiment, an October 2011 Report of the Office of the National Counter Intelligence Executive notes that “[f]oreign economic collection and industrial espionage against the United States represent significant and growing threats to the nation’s prosperity and security” with the pace of such activity accelerating...more

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