Friday, November 9, 2012

United Water Case: Not Guilty. All Defendants. All Counts.

by: Solomon L. Wisenberg

In a major environmental prosecution out of the Northern District of Indiana, a great white collar team proves once again that you CAN go to trial and beat the government. The indictment alleged a conspiracy to violate the Clean Water Act and 26 substantive violations by United Water Services and two of its employees. Some counts were dropped along the way by the government. All three defendants were acquitted of all remaining charges by the jury.

This was a complete victory for the defense. The jury deliberated about 8 hours over two days. Congratulations go to the following members of the respective white collar/environmental defense teams:

Representing United Water Services were my colleagues at Barnes & Thornburg: Larry Mackey, George Horn, Pat Cotter, Harold Bickham, Meredith Rieger, and Tim Haley.

Representing Dwain Bowie were Jackie Bennett and Bob Clark of Taft Stettinius & Hollister.

Representing Gregory Ciaccio were J.P. Hanlon and Kevin Kimmerling of Faegre Baker Daniels.

The case was tried in Hammond, Indiana.

Here is the Post-Tribune story.

(wisenberg)

November 9, 2012 in Defense Counsel, Environment, Prosecutions | Permalink | Comments (0) | TrackBack (0)

Wednesday, November 7, 2012

Billion Dollar "Unauthorized Trade" Suggests Criminal Statute Prohibiting "Reckless Trading"

by: Lawrence S. Goldman 

As the New York Times reports (see here), once again a trader has apparently taken an enormous bet with his employer's money and lost, thereby costing his employer, a small Connecticut brokerage firm, millions of dollars and threatening its continued existence.  David Miller, described by the Times as a "journeyman" with a career that includes stints at some of Wall Street's less distinguished firms, bought roughly $1 billion of Apple stock hours before Apple was to announce its earnings for his employer Rochdale Securities in what the firm's president called an "unauthorized trade."  When the announced earnings were below expectations, Apple's stock price fell and the firm was then forced to sell the securities at a considerable loss.

I have no idea whether Miller's trading was a calculated effort of his own to secure a huge gain for his employer and perhaps a corresponding large bonus for himself, an execution of a strategy approved by supervisors, a ministerial error resulting from a "fat finger" (as Rochdale has reportedly told potential financial rescuers) or something else.   However, this situation, along with better-known recent examples of purportedly unauthorized trades which have caused massive losses (some of which, potentially at least, might eventually be borne by taxpayers) lead me to wonder whether there should be a criminal statute prohibiting "reckless" trading of other people's money.  Many statutes, generally state, prohibit reckless behavior which causes, or just puts people at risk of, death or physical harm, including in New York reckless assault, reckless endangerment, and reckless driving.  I wonder whether just as the law criminalizes reckless conduct which may cause physical harm, it should criminalize reckless conduct which may cause monetary harm.  Such a statute might criminalize conduct when one "takes a substantial and unjustifiable risk in making trades with money other than his own and that such risk is a gross deviation from the standard of conduct a reasonable person would observe in that position."  (Cf. N.Y. Penal Law Section 15.05).

The bonus system which gives great incentives to hugely successful trading by one whose own funds are not put at risk (at least directly) and lesser disincentives to hugely unsuccessful trading encourages taking long-shots.  Perhaps that is the way the markets should work.  However, contrary to my visceral feeling that governments enact too many penal statutes, I believe a prohibition of reckless trading which results in severe financial loss might be worthy of consideration.

(goldman) 

November 7, 2012 in News, Securities, Statutes | Permalink | Comments (3) | TrackBack (0)

Tuesday, November 6, 2012

NACDL Launches Publicly Available Restoration of Rights Database

Check out NACDL's new resource for its members "a collection of individual downloadable documents that profile the law and practice in each U.S. jurisdiction relating to relief from the collateral consequences of conviction." The website notes:

"The 54 jurisdictional profiles include provisions on loss and restoration of civil rights and firearms privileges, legal mechanisms for overcoming or mitigating collateral consequences, and provisions addressing non-discrimination in employment and licensing. In addition to the full profiles, there is a set of charts covering all 50 states (plus territories and the federal system) that provide a side-by-side comparison and make it possible to see national patterns in restoration laws and policies. The information covered by the charts is summarized on the page for each jurisdiction. These materials will be an enormous aid to lawyers in minimizing the collateral consequences suffered by clients and in restoring their rights and status."

(esp)

November 6, 2012 | Permalink | Comments (0) | TrackBack (0)

Monday, November 5, 2012

Voter Fraud

The right to vote is one of the most important rights that we as U.S. citizens have in our democracy. The civil rights division of DOJ has set up a voting rights violations reporting website to provide general information for protecting this right. On their website here it states that "[I]f you believe that you have been denied the right to vote based on your race, color, or language minority status or that otherwise your voting rights under federal law have been violated, you may contact the Civil Rights Division of the United States Department of Justice:" and the telephone, internet, or mail numbers are provided on this webpage.

It was particularly good to see that the Justice Department intended to monitor polls in 23 States on Election Day (see here).  Their press release states that, "[t]he Justice Department announced today that its Civil Rights Division plans to deploy more than 780 federal observers and department personnel to 51 jurisdictions in 23 states for the Nov. 6, 2012, general election."

Assuring that voter fraud does not occur is crucial to having a fair election.

(esp)

November 5, 2012 in Fraud | Permalink | Comments (0) | TrackBack (0)

Alleged Theft of Trade Secrets

An area that has long fascinated me is intellectual property and prosecutions premised on theft of trade secrets. It is particularly intriguing when the actors are outside the United States. The U.S. Attorney in the Eastern District of Virginia issued an indictment of a company and several executives "for allegedly engaging in a multi-year campaign to steal trade secrets related to DuPont’s Kevlar para-aramid fiber and Teijin Limited’s Twaron para-aramid fiber.  The indictment seeks forfeiture of at least $225 million in proceeds from the alleged theft of trade secrets from Kolon’s competitors."  What will make this case particularly interesting is that the company - Kolon- is "[h]eadquartered in Seoul, South Korea, yet the indictment came from a grand jury in Richmond, Virginia. (see here).

(esp)

November 5, 2012 in International, Prosecutions | Permalink | Comments (0) | TrackBack (0)

Sunday, November 4, 2012

Carbon Copy Prosecutions - New Article

T. Markus Funk, Perkins Coie Partner and former federal prosecutor, and Chicago Assistant U.S. Attorney Andrew S. Boutros examine the growing - but still largely under-recognized - international phenomenon of what Funk and Boutros term "carbon copy prosecutions." A country’s incentive to vindicate its own laws is not insubstantial, especially when a company or individual has already admitted, in a foreign proceeding, to having violated local law.  With the increase in FCPA and money laundering cases, globalization presents many new concerns. Check out -  Andrew S. Boutros & T. Markus Funk, "Carbon Copy" Prosecutions: A Growing Anticorruption Phenomenon in a Shrinking World

(esp)

November 4, 2012 in International, Scholarship | Permalink | Comments (0) | TrackBack (0)

Anti-trust

Maurice E. Stucke has a piece on SSRN titled, Is Competition Always Good?  The abstract states:

Competition is the backbone of U.S. economic policy. The U.S. Supreme Court observed, "The heart of our national economic policy long has been faith in the value of competition." Competition advocacy is also thriving internationally. Promoting competition is broadly accepted as the best available tool for promoting consumer well-being. Competition officials, who regularly try to protect the public from anticompetitive special interest legislation, are justifiably jaded about complaints of excess competition. Although the economic crisis has prompted some policymakers to reconsider basic assumptions, the virtues of competition are not among them.

Nonetheless to effectively advocate competition, officials must understand when competition itself is the problem's cause, not its cure. Market competition, while harming some participants, often benefits society. But does competition always benefit society? This is antitrust’s blind spot. After outlining the virtues of competition, and discussing some well-accepted exceptions to competition law, this Article addresses four scenarios where competition yields a suboptimal result.

(esp)

November 4, 2012 in Scholarship | Permalink | Comments (0) | TrackBack (0)