The U.S. Court of Appeals for the Ninth Circuit has broadly
interpreted the Computer Fraud and Abuse Act (CFAA), 18 U.S.C.
§ 1030(a)(4). The court reversed the district court's dismissal of
an indictment that charged a firm's former employee with
conspiring to violate the CFAA by having current employees send
information to him. The Ninth Circuit held that "an employee
'exceeds authorized access' under § 1030(a)(4) when he
or she violates the employer's computer access
restrictions--including use restrictions." But that ruling has
been vacated because the court decided to hear the case en banc on December
Skilling Alone Can't Keep Bruno Out of Jeopardy
The Second Circuit held that the honest-services-fraud conviction
of former New York State Senate Majority Leader Joseph L. Bruno
should be vacated in light of United States v. Skilling. But that
was a Pyrrhic victory because Mr. Bruno now faces a retrial. Mr.
Bruno argued "that the government adduced insufficient
evidence at his first trial," such that re-prosecution is
barred by the Double Jeopardy Clause. The court engaged in a
sufficiency-of-the-evidence review, finding a reasonable jury could
convict Bruno for honest-services fraud if properly charged in
light of Skilling, and rejected Bruno's argument.
A Lawyer's "Privilege" to Produce
The First Circuit rejected a series of arguments from the client
of an attorney who received a grand-jury subpoena for the
client's records. The client tried to avoid production by
making every conceivable argument that the documents were
privileged, but the First Circuit disagreed with them all.
Mo' Money, Mo' Years in the Hoosegow ... Sometimes
Assistant Attorney General Lanny A. Breuer addressed sentencing
disparities, including white-collar sentencing disparities, in a
recent speech. He noted that "[w]ith increasing
frequency, federal judges have been sentencing fraud
offenders--especially offenders involved in high-loss fraud
cases--inconsistently." He continued that "a defendant in
one district may be sentenced to one or two years in prison for
causing hundreds of millions of dollars in losses, while a
defendant in another district is sentenced to ten or 20 years in
prison for causing much smaller losses."
Madoff: A Scandal That Keeps Making Waves
The SEC shook up its reporting structure by issuing a final rule to make the Office of the Ethics
Counsel a stand-alone office that reports to the chairman of the
commission instead of its general counsel. This change reflects the
recommendation of the SEC's Office of the
Inspector General in light of the purported conflict of interest
between the SEC's former general counsel and the Madoff-related
investigations by the agency.
Blowing the Whistle Loud and (Not Necessarily) Often
The SEC also reported it received a total of 334 tips from
individuals in 37 states and foreign countries in the seven weeks
since the creation of the Office of the Whistleblower. California
and New York led all states with the most tips. More tips were
expected in the wake of the creation of the office.
Add Forfeiture to the Inevitability of Death and Taxes
The Ninth Circuit held that if an indictment properly includes
forfeiture allegations for an offense that authorizes criminal
forfeiture, the sentencing court must impose forfeiture of the
proceeds of the crime. As the court explained, "[c]riminal
forfeiture is separate from the discretionary sentencing
considerations under 18 U.S.C. § 3551." The court also
noted that "[c]riminal forfeiture is also separate from
restitution, which serves an entirely different purpose"; a
district court is empowered to impose both.
Corporate Officers Take Heed
The U.S. District Court for the Eastern District of Pennsylvania
imposed jail sentences on three officers of a medical-device
company who had pleaded guilty to misdemeanor offenses under the
controversial corporate-officer doctrine, which can hold executives
criminally liable for failing to prevent or promptly correct
certain corporate violations. According to the press release from the U.S. Attorney's
Office for the Eastern District of Pennsylvania, which prosecuted
the case, "[t]he Department of Justice is committed to holding
individual corporate officers accountable for their criminal
Best Government-Report Title Ever
The Office of the National Counterintelligence Executive issued
its biennial report, titled "Foreign Spies Stealing US
Economic Secrets in Cyberspace," to Congress. The report noted
that "[t]he proliferation of malicious software, prevalence of
cyber tool sharing, use of hackers as proxies, and routing of
operations through third countries make it difficult to attribute
responsibility for computer network intrusions." The report
includes "Best Practices in Data Protection Strategies,"
which are worth a look.
In a recent decision, Judge Laura Taylor Swain of the U.S. District Court for the Southern District of New York held that J.P. Morgan Chase & Co.'s (JPMorgan) disclosure of information to FINRA in response to a routine chronology/name recognition inquiry constituted a waiver of privilege in a subsequent criminal insider trading case.
On 12 May 2016, the UK Ministry of Justice ("MoJ") announced that it would be considering whether to extend the scope of the UK Bribery Act's section 7 offence of a corporate failing to prevent bribery to other economic crimes such as fraud and money laundering.
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