United States: White Collar Roundup - October 2015

Last Updated: October 12 2015
Article by Day Pitney LLP

Individuals, Individuals, Individuals

The biggest news from the past month (as far as the WCR is concerned) arrived on September 9, when Deputy Attorney General Sally Quillian Yates issued a memorandum to all federal prosecutors, called "Individual Accountability for Corporate Wrongdoing." The "Yates Memo" sets new goals for the Department of Justice (DOJ) to "combat corporate misconduct ... by seeking accountability from the individuals who perpetrated the [organization's] wrongdoing." The DOJ had not been ignoring the prosecution of individuals in the past, but the Yates Memo expressed an aversion to allowing organizations to simply pay a fine and move forward. Although the DOJ will certainly continue to seek fines from organizations, prosecutors are now instructed that "[c]orporate cases should not be resolved without a clear plan to resolve related individual cases before the statute of limitations expires." Prosecutors also must obtain supervisory approval for "declinations as to individuals," which "must be memorialized." Is this a response to criticism of past prosecution trends, a revolution in how investigations will unfold, or a little of both? Only time will tell. Click < here for the memo. Click here or here for news articles about it.

No Retaliation Against Whistleblowers, but Only If They Tell the SEC

The U.S. Court of Appeals for the Second Circuit in Berman v. Neo@Ogilvy LLC confronted the question of whether the anti-retaliation provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) apply to whistleblowers who report violations internally but not to the SEC. In the case, plaintiff Daniel Berman brought a wrongful-termination action against his employer, Neo@Ogilvy LLC, alleging it violated the anti-retaliation provisions of Dodd-Frank when it fired him for internally reporting possible accounting fraud. Berman never reported anything to the SEC before his termination. The district court granted Neo@Ogilvy's motion to dismiss for failure to state a claim on the basis that Dodd-Frank's anti-retaliation provisions apply only when the retaliation is against an employee-whistleblower who made a report to the SEC. Berman appealed to the Second Circuit, which held in a split decision that "the pertinent provisions of Dodd-Frank create a sufficient ambiguity to warrant our deference to the SEC's interpretive rule, which supports Berman's view of the statute."

Sunken Ships, Misstatements and the Crime-Fraud Exception

The First Circuit in In re Grand Jury Proceedings emphasized the importance of providing a privilege log in response to a grand jury subpoena. The case arose from a subpoena issued to the attorneys for a target of a fraud investigation. The purported fraud involved the salvage of a ship that had been sunk or destroyed during World War II. The government contended the target had falsified the entries for the sunken vessel in the famed Lloyd's War Losses, which is a compendium of lost ships and their likely cargo. The original entry in Lloyd's listed the ship's cargo as "1600 tons of automobile parts & 4000 tons military stores." The target had allegedly altered the entry to include in the ship's cargo "1,707,000 troy ounces of platinum" and also told potential investors it possibly contained "ten tons of gold bullion." During its investigation, the government moved for an order to compel production of files withheld on the basis of privilege in light of the crime-fraud exception. The target asked the court to conduct an in camera review of documents alleged to fall outside any possible crime-fraud exception. The district court refused to conduct any in camera review, held that the exception applied and ordered the documents produced. On appeal, the First Circuit affirmed. In doing so, it noted that because the target never provided a privilege log, which is required by Federal Rule of Civil Procedure 45(e)(2)(A), he waived any request for in camera review.

SEC Loses Enforcement Action

The SEC faced a rare setback in an ALJ's decision in In re Ruggieri. The SEC brought an administrative proceeding against Joseph C. Ruggieri, alleging he had engaged in insider trading. The ALJ had previously held that the Division of Enforcement had to establish that the tipper tipped Ruggieri in exchange for "a personal benefit in accordance with Newman." The ALJ then gave the Division an opportunity to meet that burden by holding a 12-day hearing. After the hearing, the ALJ determined the Division had failed to prove by the preponderance of the evidence that the tipper received a personal benefit. As a result, the ALJ dismissed the action against Ruggieri. The Division has 21 days to file a petition for review of the decision.

SEC Administrative Proceedings Might Be Curtailed

The New York Times suggested the SEC's ability to use its administrative arm to adjudicate enforcement actions might be curtailed because some federal courts have bristled at the practice. Dodd-Frank authorized the SEC to bring almost any case in its own administrative forum rather than in federal district court. Several defendants have asserted that the administrative procedures available in such a forum violate their due process and equal protection rights. The SEC has won some of these challenges and lost others. Perhaps in reaction to the criticism, the SEC has proposed changes to its administrative procedures to "modernize" its rules of practice. It proposes to adjust the timing of administrative proceedings, permit parties to take depositions and require electronic filing. It is unclear whether these proposed adjustments will change the minds of federal judges who have prohibited the SEC from proceeding administratively. The SEC will publish the proposed changes in the Federal Register and will seek comments on them for 60 days.

Justice Is Not for Sale

So say Senator Bernie Sanders, I-Vt., and other sponsors of legislation (called the Justice Is Not for Sale Act) introduced in Congress to ban private prisons, reinstate the federal parole system and eliminate quotas of immigrants held in detention. Senator Sanders contends our criminal justice system has suffered because "corporations are allowed to profit from mass incarceration" and calls for an end to "the private prison racket in America." He extols the importance of "treating people with dignity and ensuring they have the resources they need to get back on their feet when they get out." Click here to read the bill.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.