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Victor L. Hou’s practice focuses on litigation, including government enforcement work, white-collar criminal defense, securities litigation, corporate governance, and general commercial litigation.

On March 4, a federal judge of the Northern District of California granted a directed verdict motion in favor of Robert Bogucki, the former head of Barclays’ foreign exchange (“FX”) trading desk.  Bogucki went to trial on charges that he had engaged in a “front-running” scheme to manipulate the FX options market in advance of a client’s corporate transaction.  Following the government’s presentation of its case at trial, Judge Charles Breyer acquitted Bogucki, finding that the government had failed to present sufficient evidence such that a reasonable jury could find Bogucki guilty of any fraud charges beyond a reasonable doubt. Continue Reading District Court Acquits Barclays FX Trader of Fraud Charges

Nearly a decade ago, WikiLeaks ushered in the age of mass leaks.  Since then, corporations, governments, public figures and private entities have increasingly had to reckon with a new reality: that vigilantes, activists, extortionists and even state actors can silently steal and rapidly disseminate proprietary information, including customer data and other sensitive information.  Last month, the Department of Justice (“DOJ”) indicted four individuals based on information first revealed in the “Panama Papers” leak.  This marks a significant milestone in law enforcement’s reliance on evidence based on an unauthorized mass leak of information.  While leaks and hacks are not a novel phenomenon—in 1971, the New York Times published top secret documents on the Vietnam War and, in 1994, a paralegal leaked tobacco industry documents that ultimately cost the industry billions of dollars in litigation and settlement costs—the frequency, scale and ease of dissemination of leaked information today presents a difference not only of degree, but of kind.  The new Panama Papers-based criminal case will likely raise a host of novel legal issues based on legal challenges to the DOJ’s reliance on information illegally obtained by a third party, as well as information that would ordinarily be protected by the attorney-client privilege.  In this memorandum, we discuss the potential issues raised by the prosecution and their implications. Continue Reading U.S. Criminal Prosecution Based on Panama Papers Hack Raises Novel Legal Issues

On November 30, 2018, Judge Richard Sullivan issued a long-anticipated decision in favor of the defendants in Commodity Futures Trading Commission v. Wilson, No. 13 Civ. 7884, following a four-day bench trial in December 2016 before the U.S. District Court for the Southern District of New York.  The court held that the CFTC failed to meet its burden of proof in establishing claims of market manipulation or attempted market manipulation under Sections 6(c) and 9(a)(2) of the Commodity Exchange Act (“CEA”) based on trading by Donald R. Wilson and his firm DRW Investments LLC (“DRW”) of a particular exchange-traded interest rate swap futures contract (the “IDEX Three-Month IRS Contract”).  The court found that although the defendants’ trading affected the price of the IDEX Three-Month IRS Contract in a way that benefitted defendants’ existing positions, there was no evidence that the resulting price was “artificial,” which the Second Circuit has held is a necessary element in establishing market manipulation under the CEA.

The Wilson decision is significant because it rejected the CFTC’s argument that the artificiality element could be satisfied merely by showing that a market participant structured bids in a manner intended to affect settlement prices.  Because the defendants had a “legitimate economic rationale” for the bids they submitted, the court held that defendants’ intent to trade in a manner that affected settlement prices does not itself create liability for market manipulation under the CEA.

Please click here to read the full alert memorandum.