On October 28, 2021, Deputy Attorney General (DAG) Lisa Monaco outlined sweeping changes to the Department of Justice’s (DOJ) prosecution of corporate crime, signaling a tougher stance on white collar crimes than the previous administration. In a speech at the ABA’s National Institute on White Collar Crime, DAG Monaco announced key policy changes at DOJ,

No-poach and wage-fixing agreements – arrangements between companies seeking to prevent or limit the hiring of each other’s employees, or to suppress the wages and/or benefits of their respective current employees are not only currently under the spotlight in the US, but have also been subject to scrutiny by antitrust authorities in the European Union

A court in the Southern District of New York recently issued a noteworthy opinion in addressing a discovery dispute concerning communications between a non-party witness at the center of the SEC’s allegations and her attorneys, to whom she provided false information expecting they would pass it along to the SEC. In denying defendants’ request to examine the witness’s attorneys on these issues, the court held that although certain communications were no longer privileged because the witness waived the privilege and the crime-fraud exception applied, it would limit the extent to which the defendant could examine the attorneys on those communications on the basis of the proportionality requirement under Rule 26. The opinion serves as an apt reminder to defense counsel seeking exculpatory information being withheld as privileged that Rule 26’s proportionality requirement may pose an additional hoop through which to jump, even where arguments regarding the crime-fraud exception and waiver are successful.

Continue Reading Court Invokes Rule 26 Proportionality Requirement as Added Barrier to Discovery in SEC Action

In late December, the United States Court of Appeals for the Second Circuit affirmed the conviction of Chi Ping Patrick Ho on seven counts alleging multiple FCPA and money laundering (and related conspiracy) violations.[1] The decision is notable for its construction of various FCPA provisions, and further demonstrates the expansive jurisdictional reach of anti-money laundering laws to dollar-denominated transfers.

Ho, a citizen of Hong Kong, served as an officer and director of the Hong Kong-based non-governmental organization China Energy Fund Committee (CEFC-NGO), which was funded by Shanghai-based energy conglomerate China CEFC Energy Company Limited (CEFC).[2] Ho also served as an officer and director of a CEFC-affiliated US non-profit (US NGO), funded by CEFC NGO.[3]

Ho’s conviction, for which he was sentenced to 36 months imprisonment and a US$400,000 fine,[4] stemmed from two alleged bribery schemes involving (1) an attempted US$2 million cash delivery to the President of Chad (which was purportedly rejected by the President) and (2) a US$500,000 wire transfer to a charity associated with the foreign minister of Uganda.[5] Notably, the US dollar-denominated wire originated from a bank in Hong Kong, which was transmitted through its operating unit in the United States as a correspondent to another bank in New York, which in turn was acting as a correspondent for a beneficiary bank in Uganda for final credit to an ultimate beneficiary NGO. Both acts were allegedly made for the benefit of CEFC’s commercial interests in Africa.[6]

Continue Reading United States v. Ho

Earlier this year, we wrote about a decision from the Fourth Circuit[1] that seemed to cast doubt on the legality of taint teams. Since then, two recent district court cases affirmed the legality of the practice, but emphasized limitations on government review of privileged material. These cases, together, suggest that the days of courts rubber-stamping whatever privilege review protocol the government proposes may be over, and provide a preview for how courts will handle privilege review in the future. In both, courts set limits on filter team review, ruling that sending non-privileged material straight to the prosecution without prior review by the privilege-holder fails to adequately protect the privilege-holder’s interests.

Continue Reading DOJ ‘Taint Team’ Practice Affirmed but Protocols Questioned

On November 16, the Health and Human Services (HHS) Office of Inspector General (OIG) issued a Special Fraud Alert highlighting fraud and abuse risks associated with payments to physicians related to speaker programs sponsored by pharmaceutical and medical device companies.

Despite the pharmaceutical and device companies’ longstanding use of speaker programs to educate heath care

This month has so far seen two significant actions taken by the Department of Justice (DOJ) Antitrust Division (Antitrust Division) on wage-fixing and no-poach litigation and enforcement matters, which has shed additional light in an enforcement area that has needed it. Over the last few weeks, the Antitrust Division both served up its first indictment in a criminal wage-fixing case, and filed an amicus brief in a “no-poach” case to clarify its view of how the law should be interpreted relating to franchise agreements.
Continue Reading A Busy Month for DOJ on No-Poach/Wage-Fixing Enforcement Front

One of the most difficult questions faced by any management team is whether, absent a legal, regulatory or statutory duty to do so, its company should commence an internal investigation. The answer is simpler when a law enforcement agency is knocking at the company’s door, when the company receives a request for information to which it is compelled to respond or when it is the subject of a whistleblower or adverse press report. However, it is perhaps far less simple when an investigation is being voluntarily contemplated to assess the general health of the company. What happens if an issue is identified that might otherwise have remained undetected, that leads to significant costs, demands on management time, adverse press and, perhaps worse still, regulatory sanction or criminal prosecution? Might it be better to let sleeping dogs lie?

The question as to whether to undertake a voluntary investigation is one that, for many years, has caused management teams to scratch their collective heads. Given the issues that have affected many companies as a result of the worldwide COVID-19 pandemic, the question is increasingly being raised. As a result of the effects of COVID-19, some companies were rushed into decisions that they might otherwise have spent more time considering, compliance processes were shortened or even overlooked, and employees were afforded more opportunity to take autonomous decisions, often within the less supervised confines of a remote environment. Is 2021 the time to revisit some of the decisions that were made over the past year and to lift up the floorboards?

In this article, we suggest some of the advantages and disadvantages of undertaking a proactive, voluntary internal investigation. We also consider some of the ways in which a company could mitigate those potential disadvantages.

Continue Reading The Benefits and Risks of Conducting an Internal Investigation: Is it Better to Let Sleeping Dogs Lie?

Increasingly frequent cross-border investigations have raised difficult questions of privilege and work product protection over the last few years. In the United States, attorney-client privilege protects confidential communications between attorneys and clients for the purpose of seeking or rendering legal advice, and the work product doctrine protects documents or materials prepared in anticipation of litigation

On Wednesday, November 18, 2020, head of the DOJ Antitrust Division, Makan Delrahim, signed a Memorandum of Understanding (MOU) between the DOJ and the Korean Prosecution Service (KPS) that supports increased cooperation between the two agencies in criminal antitrust enforcement and policy development. Delrahim was joined virtually by Prosecutor General Yoon from KPS for the signing ceremony.

In his signing ceremony remarks, Delrahim stated: “The Memorandum of Understanding is a shared recognition of the close ties between our agencies and our commitment to assisting one another in criminal cartel matters… [It] serves to memorialize and formalize what we have been implementing over the past few years.” He went on to highlight DOJ and KPS’s recent collaborations: shared enforcement training, cooperation and coordination on investigations, and exchange of information regarding policy initiatives.

Continue Reading DOJ Antitrust Division, Korean Prosecution Service Sign MOU