At an in Chambers hearing on February 16, 2012, Judge James Selna issued an Order in U.S. v. Carson, addressing the jury instructions regarding the terms "foreign official" and "instrumentality." In doing so, Judge Selna rejected a number of the proposed instructions submitted by the defendants, sticking closing to the list of non-exclusive factors he identified … Continue Reading
Another chapter ended in the series of FCPA criminal prosecutions arising out of the TSKJ Joint Venture this week, when Texas federal Judge Keith P. Ellison sentenced three men for their role in the portion of the case involving Kellogg Brown & Root. On Thursday, February 23, 2012, former KBR executive, Albert "Jack" Stanley was … Continue Reading
On February 17, 2012, both the U.S. Attorney for the Southern District of New York and the SEC announced that they had brought charges against John Kinnucan, the President of Broadband Research Corporation, for insider trading. The criminal charges allege that he tipped clients regarding three companies, while the SEC’s civil case, which also named … Continue Reading
In a Motion filed this morning, the Government moved to dismiss with prejudice the Superseding Indictment against the remaining defendants in the FCPA Sting Case. In doing so, the Government cited the two mistrials, as well as the acquittal of three defendants, and other rulings in the case.… Continue Reading
In a February 10, 2012 Memorandum Opinion and Order, Chief Judge Sidney Fitzwater ruled on the motions to compel pending in the SEC’s lawsuit against Mark Cuban. Although these disputes in the insider trading case are largely procedural, they are significant in that the Court considered whether the SEC would be required to produce certain … Continue Reading
Today (a day early), the Federal Securities Law Blog takes a look back at the last 30 days in the world of securities-related litigation in a regular feature which appears on approximately the 15th of each month. In the last month, there were dramatic results in two FCPA trials. Also, while the Citigroup matter remains … Continue Reading
On Friday, February 10, 2012, the U.S. Attorney for the Southern District of New York and the SEC announced charges against Douglas F. Whitman, the head portfolio manager at Whitman Capital, LLC, related to alleged insider trading. It is claimed that Mr. Whitman’s friend and neighbor, Roomy Khan, provided Mr. Whitman with the same information … Continue Reading
On Wednesday, February 8, 2012, the Public Company Accounting Oversight Board ("PCAOB") announced that it had settled a proceeding with Ernst & Young LLP ("E&Y"). PCAOB censured the accounting firm and imposed a $2 million penalty upon it, which was the largest civil money penalty ever imposed by the agency. In addition, four of its … Continue Reading
On Thursday, February 9 2012, prosecutors filed a motion in federal court in Texas requesting that the remaining charges against John O’Shea be dismissed. On January 16, 2012, the Court dismissed the FCPA charges against Mr. O’Shea, leaving one count of conspiring to violate the FCPA, four counts of money laundering and one count of … Continue Reading
A story from the Blog of the Legal Times states that prosecutors "are considering whether to abandon" the charges in the FCPA Sting Case in federal court in Washington, DC. Mike Scarcella’s blog entry (available here) states that prosecutor Joey Lipton reported to Judge Richard Leon at a February 7, 2012 status conference that "Assistant … Continue Reading
In a February 3, 2012 Opinion, the First Circuit Court of Appeals reversed a Massachusetts federal court decision and held that, while the whistleblower protections of the Sarbanes-Oxley Act apply to employees of "public companies" (i.e., a company with registered securities or one that files reports under Section 15(d) of the Exchange Act), they do … Continue Reading
On Monday, February 6, 2012, the SEC and DOJ resolved their respective investigations with a medical device company and its subsidiary by entering into settlements stemming from alleged bribes paid to doctors in Greece for more than a decade. The U.S. subsidiary, Smith & Nephew Inc., agreed to pay a $16.8 million fine as part … Continue Reading
For those readers of the blog who are litigators or follow litigation issues, today’s post from Professor Mike Koehler’s FCPA Professor Blog has a real treat: a guest post from the foreman of the recently concluded trial in the FCPA Sting Case. The foreman provides a detailed description of the issues considered by the jurors … Continue Reading
An article in today’s New York Times reports that over the last decade a number of large Wall Street companies, including JPMorganChase, Goldman Sachs and Bank of America, have avoided certain punishments specifically aimed at fraud cases and continued to have certain advantages reserved for the most dependable companies. According to Edward Wyatt’s article, there … Continue Reading
In a letter dated February 1, 2012 to the parties, Judge Rudolph Randa stated that the SEC’s Brief responding to certain questions the Court had raised regarding the language of the proposed settlement with Koss Corporation ("Koss") and Michael Koss "largely satisfies the Court’s concerns." As a result, the SEC will avoid the issues it … Continue Reading
In the on-going dispute as to whether the SEC can enforce an investigative subpoena on an accounting firm in China, Magistrate Judge Deborah Robinson issued a Minute Order on Wednesday February 1, 2012 which reiterated that the SEC can serve the Order to Show Cause on counsel for Deloitte Touche Tohmatsu CPA Ltd. ("D&T Shanghai") … Continue Reading
On January 31, 2012, Judge Richard Leon declared a mistrial in the trial of the second group of defendants in the FCPA Sting case when the jury was unable to reach a verdict as to John and Jeana Mushriqui and Mark Morales. The mistrial occurred the day after the jury returned a partial verdict, finding … Continue Reading
On Monday, January 30, 2012, the SEC filed two lawsuits in federal court in Indiana and commenced two administrative proceedings stemming from an accounting fraud scheme at the Thornton Precision Components ("TPC"), which is the Sheffield, England subsidiary of Symmetry Medical Inc. ("Symmetry"), an Indiana-based manufacturer of medical devices and aerospace products. According to the … Continue Reading
Four separate websites have reported this afternoon that two of the defendants in the FCPA Sting or "Shot Show" case have been acquitted and Judge Richard Leon has stated that he would declare a mistrial if the jury is unable to reach a verdict as to the remaining three defendants. Specifically, C. M. Matthews and … Continue Reading
In the on-going dispute as to whether the SEC can enforce an investigative subpoena on an accounting firm in China, the parties have submitted differing proposed scheduling orders. Although the arguments between the parties focus on procedure at this point, they are potentially significant in that the Court is being asked to address actually how … Continue Reading
On Tuesday, January 24, 2012, the SEC filed a Memorandum which defended the proposed settlement with Koss Corporation ("Koss") and its CEO. The Commission’s Memorandum was filed after a Wisconsin federal judge, Rudolph Randa, issued a letter order on December 20, 2011, directing the Commission to "provide a written factual predicate for why it believes … Continue Reading
On Monday, January 23, 2012, the SEC announced that Diamondback Capital Management LLC ("Diamondback"), the Stamford, Connecticut-based hedge fund named as a defendant in the SEC’s insider trading case last week (as discussed here), has agreed to settle charges with the Commission. Diamondback will pay more than $9 million as part of the settlement, which … Continue Reading
On January 11, 2012, Magistrate Judge John Acosta recommended the dismissal of the derivative lawsuit against the Board of Directors of Umpqua Holdings Corporation ("Umpqua") for breach of fiduciary duty. The lawsuit was filed after the shareholders, in an advisory vote, rejected the Board-approved executive compensation program. The Magistrate Judge found that the plaintiffs failed … Continue Reading
Today, federal prosecutors and the SEC named seven fund managers and analysts as defendants in an insider trading scheme based on nonpublic information about Dell’s quarterly earnings and similar inside information regarding Nvidia Corporation. The U.S. Attorney called the trading in Dell shares the "largest insider trading scheme involving single stock charged to date." Three of … Continue Reading
