Archives: Government Investigations & White Collar Criminal Defense

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Big win for SFO in LIBOR trial – Tom Hayes sentenced to 14 years. More SFO prosecutions to come in financial sector?

The conviction of Tom Hayes in the first UK LIBOR trial (click here to read more) is a watershed moment. It’s a big win for the SFO, although it must be said that a more damning book of evidence could not be imagined. The judge’s sentencing remarks (link to judiciary.gov.uk) repay detailed study. Hayes received … Continue Reading

FinCEN Imposes Largest-Ever Penalty Against a Casino

On June 3, the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) issued a $75 million penalty against a Northern Mariana Islands casino for Bank Secrecy Act violations – the largest-ever FinCEN penalty assessed against a casino. FinCEN’s announcement follows an investigation of the casino, Hong Kong Entertainment (Overseas) Investments, Ltd., d/b/a Tinian Dynasty Hotel & … Continue Reading

CFPB’s Federal Court Action Against PayPal Sheds Important New Light on the Meaning of ‘Abusive’ Acts or Practices

On May 19, 2015, the Consumer Financial Protection Bureau (“CFPB” or “Bureau”) filed a complaint and proposed consent order against PayPal, Inc. and its subsidiary Bill Me Later, Inc. (collectively, “PayPal”) in the U.S. District Court for the District of Maryland. If the court approves, the settlement will require PayPal to pay $15 million in … Continue Reading

The UK shines a spotlight on enablers of organised crime

From 3 May 2015, businesses in the UK will face new risks as a reform in the law will mean that those enabling the criminal activities of an organised crime group, including professionals, can be prosecuted more easily. It is important that all businesses are alive to the risk of not asking questions, or of … Continue Reading

FCA Acquires New Competition Powers; Increased Regulatory Activity in Future

As of April 1, 2015, the Financial Conduct Authority (FCA) has acquired new functions and powers in relation to competition including powers under the Enterprise Act 2002 (the 2002 Act) to conduct market studies and make references to the Competition and Markets Authority (CMA), and powers under the Competition Act 1998 (the 1998 Act) to … Continue Reading

Toward Class Actions for Health-Related Claims in France

Class actions – which are progressively becoming part of the legal landscape in France as “actions de groupe” – will probably soon be extended to personal injury claims against health products manufacturers, suppliers or service providers using health products. On March 17, 2015, a new bill proposal was issued, advocating the creation of a class … Continue Reading

Bank Settles Criminal Bank Secrecy Act and Civil Fraud Charges Arising from Its Inadequate Anti-Money Laundering Program

On March 10, 2015, the U.S. Department of Justice (“DOJ”) announced a $4.9 million settlement of criminal and civil charges against CommerceWest Bank (“CommerceWest” or the “Bank”) brought pursuant to the Bank Secrecy Act (“BSA”), the Financial Institutions Reform, Recovery and Enforcement Act (“FIRREA”), and the Fraud Injunction Statute. The government alleged that, between December … Continue Reading

French Supreme Administrative Court decision significantly broadens the scope of the French Sunshine Act

A decision of the French Supreme Administrative Court (Conseil d’Etat) dated 24 February 2015 has significantly broadened the scope of the French ‘Sunshine Act’: Whereas initially health care companies were only obliged to disclose the existence of agreements with health care professionals (HCPs), they will now also be required to disclose the remuneration of French … Continue Reading

From ‘Akzo’ to ‘Loi Macron': There is still no Legal Privilege for In-House Lawyers in France

A significant difference between the French and U.S. and UK legal systems is in the understanding of legal privilege: it does not exist for in-house counsel in France. The French approach is in line with the 2010 Akzo decision, in which the Grand Chamber of the European Court of Justice (ECJ) ruled that the requirement … Continue Reading

Enforcement Action by the FCA is on the Rise

In 2014, there was an increase by 20 percent in open investigations by the UK’s Financial Conduct Authority (FCA). An increase that is speculated to be the result of the FCA’s new stricter regime, in comparison to its supposedly less confrontational predecessor, the FSA. Click here for the Reed Smith Client Alert to lean more … Continue Reading

Trump Taj Mahal Fined Record $10 Million for Inadequate AML Program

As disclosed recently in a bankruptcy court filing, on January 27, 2015, the Financial Crimes Enforcement Network (“FinCEN”) imposed a $10 million civil money penalty pursuant to the Bank Secrecy Act (the “BSA”) on Trump Taj Mahal Associates LLC. Trump Taj Mahal consented to the imposition of the penalty (subject to the bankruptcy court’s approval) … Continue Reading

Jail for UK directors and corporate sentencing to come

The prosecution of Smith and Ouzman Ltd. for bribery is winding to a close, with the sentencing of two directors of the company for corruption. See the basics of the story here. The 43-year-old sales director of the company got three years. The 72-year-old former chairman of the company got 18 months suspended, plus 250 … Continue Reading

Second Circuit Reverses Major Insider Trading Convictions (or Preet Bharara’s Terrible, Horrible, No Good, Very Bad Day)

In a widely anticipated decision, the Second Circuit on Wednesday clarified the standard for insider trading actions against tippees, downstream recipients of inside information who trade on that information. The court overturned the criminal convictions of two hedge fund portfolio managers who were convicted in 2013 as part of a massive sweep by New York … Continue Reading

FCA Enforcement: The Landscape After FX

This briefing discusses the new approach of the UK’s regulator, the FCA, to regulatory enforcement of wholesale markets, as revealed by the recent settlements between the agency and five banks relating to FX manipulation. These are the largest regulatory settlements in UK history, a total of £1.1 billion (or $1.72 billion), the largest slice of … Continue Reading

U.S. Supreme Court Upholds Fourth Circuit Victory for Omnicare, Inc. in High-Profile, Precedent-Setting False Claims Act Case

This post was also written by James C. Martin. In a decision that has significant repercussions both for the pharmaceutical and health care industries and False Claims Act jurisprudence more broadly, the U.S. Supreme Court denied review of a groundbreaking Fourth Circuit decision affirming the dismissal of a novel False Claims Act suit against Reed Smith … Continue Reading

Indonesia’s Presidential Elections Dispute and Idul Fitri 2014 – Are You and Your Company Prepared?

On July 9, within just a few hours of the polls closing in the tightly contested presidential election in the world’s third-largest democracy – the Republic of Indonesia – the only two contestants running had claimed victory. Nearly 200 million people in the world’s fourth-largest country had turned out to vote for either the current … Continue Reading

Supreme Court Clarifies Scope of Federal Bank Fraud Statute, But Leaves Some Questions

On June 23, 2014, the U.S. Supreme Court clarified – and arguably expanded – the reach of the federal bank fraud statute. In Loughrin v. U.S., petitioner Kevin Loughrin challenged the lower court’s interpretation of the federal bank fraud statute as not requiring that the government prove that the defendant specifically intended to defraud a … Continue Reading

Overview of Primary Provisions of U.S. and French Sunshine Reporting Requirements

This post was also written by Elizabeth B. Carder-Thompson. 2013 was a year of unprecedented scrutiny of financial relationships between manufacturers and health care professionals, such as physicians. Both the United States and France imposed sweeping new reporting and disclosure requirements in an effort to provide transparency and, theoretically, to enable the public – including … Continue Reading

‘Daimler’ and US Jurisdiction Over Foreign Corporations

This post was also written by Ian M. Turetsky. For many lawyers, the words “personal jurisdiction” do little more than invoke distant memories of a civil procedure course in law school, or perhaps a tortured essay question on the bar exam. But for global companies with a U.S. presence, those words have often invoked shock … Continue Reading

Chicago United States Attorneys’ Office Halts Health Care Fraud Prosecution After More Than Two Years

Dr. Neelesh Patel, DC through his lawyers, Steven A. Miller and Denise M. Ware of Reed Smith, LLP, announced today that a Deferred Prosecution Agreement has been entered between Dr. Patel and the United States Attorneys’ Office — effectively ending his criminal prosecution more than two years after charges were brought against him.  On August … Continue Reading

Federal Appeals Court Rejects False Claims Act Suit Based on Drug Packaging cGMP Violations

This post was also written by James C. Martin. Recently the U.S. Court of Appeals for the Fourth Circuit affirmed the district court’s dismissal of the relator’s False Claims Act (FCA) complaint against Omnicare in United States ex rel. Rostholder v. Omnicare, Inc., a decision having significant repercussions for the pharmaceutical industry and broader FCA jurisprudence. … Continue Reading
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