Archives: Government Investigations & White Collar Criminal Defense

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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

The Isle of Man bolsters its regulatory standards with the new Bribery Act 2013

  The Isle of Man is an unusual place. Constitutionally it is a dependency of the British Crown and depends on Britain in matters of defence and foreign affairs. But it isn’t part of the United Kingdom and has a separate legal system. The island has made the most of its differences by creating an … Continue Reading

“Bribery” In Football: What Are the Legal Consequences?

The top story in the UK media today is about alleged corruption in English football. Someone said to be a “fixer” for betting syndicates was secretly recorded boasting that the results of English lower-league matches and even international matches could be bought, once the price was right. Six people, including three players, have been arrested … Continue Reading

SFO Sweeping the Focus to Construction and Energy Industries

In a recent speech, David Green, the Director of the Serious Fraud Office (SFO) stated that the agency would adopt a “sweep” approach, focusing on specific industries, to identify businesses which might be breaking the law. The SFO has made it clear that its anti-bribery investigations are focused on the construction and energy industries. Most … Continue Reading

More Bribery Enforcement in the UK (and More To Come)

The UK’s Serious Fraud Office is gradually lengthening the role of prosecutions for overseas corruption with an important new prosecution, and clear indications that more are in the pipeline. The new case involves Smith & Ouzman, a printing company, and four individuals connected with it. The company and some of its officers are accused of … Continue Reading

Beijing MOH Launches Medical Device Sector Investigation

This post was also written by Crystal Xu. China has been undergoing a significant regulatory crackdown on its life sciences industry over the past several months, primarily in the pharmaceutical and infant formula sectors. The focus of these enforcement actions may now have spread to the medical device sector. On August 15, 2013, the local … Continue Reading

Finally… the Serious Fraud Office (the “SFO”) has brought its first charges under the UK Bribery Act and, as feared, it concerns the energy market.

Charges have been brought against four individuals in connection with a £23 million fraud at Sustainable AgroEnergy, whose parent company, Sustainable Growth Group, is in administration. The SFO has been looking at the promotion of bio fuel investment products to UK investors between April 2011 and February 2012. Sustainable AgroEnergy, a £40 million investment scheme, … Continue Reading

Virtually Identical Trade Secret Theft Cases Result in Opposite Conclusions: Lessons from the Second Circuit’s Attention to Detail

On August 1, 2013, the Second Circuit affirmed Samarth Agrawal’s criminal convictions for violating both the National Stolen Property Act (NSPA) and the Economic Espionage Act (EEA) after he misappropriated SocGen’s high-frequency trading code at the time he was leaving the company. The Second Circuit’s decision in Agrawal is puzzling if not downright shocking to … Continue Reading

UK Proposes Corporate Sentencing Guidelines

For the first time, the UK has proposed a specific and detailed sentencing regime for corporations involved in bribery, fraud and other economic crimes. Of course, individual executives who commit crimes of dishonesty can generally expect prison time. Corporates can’t be locked up, but they can be fined and/or have other penalties applied. Up to … Continue Reading

The U.S. Has a New MOU with Securities Regulators in China: Real Change or Just Déjà vu?

The Securities and Exchange Commission’s (“SEC”) power to obtain documents from U.S. companies and their auditors is a key component of its mandate to protect the marketplace from fraud. But what happens when the exercise of that power conflicts with the civil and criminal laws of another country? In the case of the SEC seeking … Continue Reading
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