Criminal Enforcement

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On June 17, 2019, in a decision interpreting the Fifth Amendment’s Double Jeopardy Clause, the United States Supreme Court in Gamble v. United States upheld the doctrine of dual-sovereignty.[1]  In doing so, the Court confirmed that one sovereign may prosecute a defendant under its laws even if another sovereign has already prosecuted the defendant for the same conduct, notwithstanding the Fifth Amendment’s prohibition against multiple prosecutions for the “same offence.”[2]  While Gamble does not represent a shift in the law, the Court’s opinion has implications for companies facing parallel investigations by the Department of Justice (“DOJ”) and other prosecutors, whether state or foreign authorities.
Continue Reading Supreme Court Upholds Dual-Sovereignty Doctrine Allowing Parallel Criminal Prosecutions At Home and Abroad

Choices made at the outset of a crisis can play a critical role in a company’s ability to maintain future privilege claims. Recent cases highlight the risks of:

1. Sharing privileged communications with third-party consultants;
2. Conducting witness interviews through non-lawyers; and
3. Discussing the crisis with a former employee.
Continue Reading Preserving Privilege in a Crisis

A company faced with a crisis needs to act quickly to assess and determine the scope of any potential liability in order to guide its first response and frame the forthcoming investigation.  Issues overlooked in the early phases of an investigation could prove very costly down the road, limiting options or potentially subjecting a company to greater penalties.
Continue Reading Assessing Risks and Potential Liability in Responding to a Crisis

As discussed in our most recent blog post, on April 30, 2019, the Criminal Division of the U.S. Department of Justice (“DOJ” or “the Department”) announced updated guidance for the Criminal Division’s Evaluation of Corporate Compliance Programs (“the Guidance”).  The Guidance is relevant to the exercise of prosecutorial discretion in conducting an investigation of a corporation, determining whether to bring charges, negotiating plea or other agreements, applying sentencing guidelines and appointing monitors.[1]  The Guidance focuses on familiar factors: the adoption of a well-designed compliance program that addresses the greatest compliance risks to the company, the effective implementation of the company’s compliance policies and procedures, and the adequacy of the compliance program at the time of any misconduct and the response to that misconduct.  The Guidance makes clear that there is no one-size-fits-all compliance program and that primary responsibility for the compliance program will lie with senior and middle management and those in control functions.
Continue Reading DOJ Guidance on Corporate Compliance Programs: A Checklist for Directors

On April 30, 2019, the Criminal Division of the U.S. Department of Justice announced updated guidance for the Criminal Division’s Evaluation of Corporate Compliance Programs (“the Guidance”) in charging and resolving criminal cases.  This memorandum highlights key updates and discusses the themes present across versions of the Guidance.  Overall, this newest version places greater emphasis…

Legal and regulatory scrutiny regarding the use of non-disclosure agreements by companies to resolve allegations of sexual harassment and misconduct continues to increase in the wake of the #MeToo movement.  Such scrutiny featured prominently this month in two high-profile sexual harassment matters: the Wynn Resorts investigation and the various legal proceedings following the allegations against Harvey Weinstein.  Both in-house and outside counsel for companies with senior executives facing such allegations should take note of these developments, as they call into question whether the use of NDAs could in certain circumstances amount to investigatory obstruction or a violation of ethical obligations.
Continue Reading New Scrutiny for NDAs in Sexual Harassment Matters

On April 3, 2019, Senator (and Democratic Presidential contender) Elizabeth Warren announced proposed legislation—dubbed the “Corporate Executive Accountability Act”—that would effect a dramatic change in white collar criminal law by permitting prosecution of corporate executives for negligent conduct.  Under traditional criminal law principles, defendants must typically have at least knowledge with respect to the conduct that constitutes the crime.  However, under Senator Warren’s proposed law, executives of large companies could be criminally prosecuted (and fined and/or jailed if convicted) if they are found to have acted negligently in failing to prevent criminal acts committed by the companies they supervise.  The bill is unlikely to be enacted, but it nonetheless represents a significant policy indication from a Presidential candidate.
Continue Reading Senator Warren Proposes Bill to Hold Corporate Executives Criminally Accountable for Negligent Conduct

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

As discussed in Cleary Gottlieb’s December 21, 2018 Alert Memorandum, on December 18, 2018, the U.S. Court of Appeals for the D.C. Circuit issued an important ruling in In re Grand Jury Subpoena, holding, inter alia, that foreign state-owned corporations are subject to criminal jurisdiction in the United States and upholding Special Counsel…