White Collar Defense and Compliance : New Jersey White Collar Defense Lawyer & Attorney : Fox Rothschild Law Firm : Criminal Defense, Insider Trading, RICO, Consumer Fraud : New Jersey, New York City

Alain Leibman writes:

Under 15 U.S.C. § 78ff (a), a defendant who willfully violates any SEC rule or regulation is subject to imprisonment for up to 20 years, unless "he proves that he had no knowledge of such rule or regulation." This provision has been characterized as a safeguard implemented by Congress to ensure that severe criminal punishments fall only on those who have acted with scienter. United States v. O'Hagan, 521 U.S. 642, 665 (1997).

But what exactly does it mean to have "no knowledge" of the relevant rule or regulation? Must a defendant establish to the sentencing judge's satisfaction that he was unaware entirely of the existence of the particular rule or regulation which he has been convicted of violating? That would be a very high bar indeed for a defendant to prove. Or is it sufficient for him to show that, although aware of the existence of the provision, he did not know that it was applicable to his specific conduct? The latter interpretation would bring Section 78ff(a) very close in meaning to the "willfulness" required to be proven by the government in tax prosecutions, i.e., that only a taxpayer who knew of, and specifically intended to violate, a particular tax provision with his conduct could be punished. See Cheek v. United States, 498 U.S. 192, 200-02 (1991).

The Eighth Circuit recently addressed this fairly novel question in United States v. Behrens, 2013 WL 1760325 (8th Cir., April 25, 2013). Behrens, who held multiple securities licenses, pled guilty to violating Rule 10b-5 by issuing worthless promissory notes to investors in his company. At sentencing, he argued that the safe harbor provision of Section 78ff allowed him to avoid jail because he did not know that the Rule was applicable to promissory notes which he contended were not "securities" under its terms. The Court of Appeals, however, upheld the conviction.

Addressing for the first time the meaning of the safe harbor provision, the Court of Appeals rejected the alternative constructions placed on the language by the defendant and the government. The defendant's preferred construction, that the safe harbor applied in any situation where a defendant did not understand his specific conduct to violate a rule of which he was admittedly aware, was too great a departure from the general principle that ignorance of the law is no defense. The court saw no reason to import from the criminal tax area the requirement that prosecution, and exposure to jail, required proof of highly specific knowledge of legal requirements; unlike the former area, where unsophisticated laypersons would otherwise be prosecuted for violating technical or obscure provisions, in the securities area defendants are often licensed persons, like Behrens, who did not need the "added protection" from jail exposure which his interpretation offered. The government's proffered interpretation, which would have burdened a defendant with proving his complete lack of awareness even of the existence of a rule, would hardly offer a safeguard ensuring only scienter-based prosecutions, because it would provide a defense only to the most unwitting defendants.

Choosing instead to follow the Ninth Circuit case of United States v. Reyes, 577 F.3d 1069 (9th Cir. 2009), the Eighth Circuit adopted a middle ground. The safe harbor language, it held, means that a defendant succeeds in establishing a no-knowledge defense "if he can show that he had no knowledge of the substance of the SEC rule or regulation is convicted of violating," regardless of whether he understood its particular application to his conduct.  In the present case, Behrens' statements at sentencing showed that he fully understood both the existence of Rule 10b-5 and its substance, but simply maintained that his fraudulent promissory notes did not qualify as "securities" under the Rule. Thus, the appeals court held, he failed to carry his burden of showing that the safe harbor applied in his case and he was appropriately sentenced to prison.

(Alain Leibman, Esq., the author of this entry and a co-author of this blog, is a partner with Fox Rothschild LLP, based in our Princeton, NJ office. A former decorated federal prosecutor, he practices both criminal defense and commercial litigation in federal and state courts)
 

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Jana C. Volante writes:

On Monday, May 21, 2012, in the Southern District of New York, Rajat Gupta’s trial began. Gupta is charged with six criminal counts all related to insider trading, more specifically five counts of securities fraud and one count of conspiracy. If convicted, Gupta faces up to 25 years in prison. Barnini Chakraborty, "High-Profile Rajat Gupta Trial Underway; Blankfein, Buffett Could Be Called to Testify", FOXBusiness, May 21, 2012.

The prosecution of Gupta -- a former director at Goldman Sachs and Proctor & Gamble and as the former managing director at McKinsey & Co. -- by the U.S. Attorney’s Office shows that no corporate director or officer is “untouchable” in the government’s crusade against insider trading.

Gupta allegedly committed securities fraud and conspired to commit securities fraud when he leaked confidential – not to mention valuable – information about Goldman Sachs and Proctor & Gamble to the founder and former manager of the Galleon hedge fund, Raj Rajaratnam, who has already been convicted of related insider-trading charges and is currently serving an 11-year prison sentence. "Gupta Trial: A Who's Who of Those Who Will Come Up", Deal Journal, Wall Street Journal Blogs, May 22, 2012.

The government’s theory of prosecution indicates that, shockingly, Gupta was not paid for any of the insider tips that he allegedly provided. Although in the long term money may have played a part in his thinking, it may not have been his most prominent motivation. So, what motivated Gupta? Climbing the corporate ladder? He had already done that. Moving in elite social circles? He was already a part of those circles, counting Bill Clinton and Bill Gates among his many powerful business contacts.

Could the charges against Rajat Gupta be the result of his well-intentioned, but reckless, attempt to maintain and deepen those business contacts and relationships? Gupta and Rajaratnam were, by all accounts, good friends and frequently discussed business, sharing confidential details and improper tips which arguably should have remained in the Board room. Michael Rothfeld, "Gupta Case Targets Inside Culture", Wall Street Journal, Oct. 27, 2011.  In fact, the U.S. Attorney’s Office for the Southern District of New York seems to be proceeding on the theory that Gupta was motivated not by greed or profit, but by his desire to further his friendship, as well as his investing partnership, with Rajaratnam who was himself a billionaire. Gupta would allegedly share nonpublic, corporate information with Rajaratnam as soon as he received it, including information that Berkshire Hathaway, led by Warren Buffett, would soon be investing $5 billion in Goldman Sachs.

Although his motivation was undoubtedly complex, at least in part it seems that Gupta was confiding in a friend, peer, and colleague. And, in that case, it seems that if Gupta would have exercised a bit more discretion and if he would have better minded the confidentiality policies of Goldman Sachs and Proctor & Gamble, then he would not be facing criminal charges and, if convicted, an extended stay in prison. Supporting this theory, as speculated in a Wall Street Journal’s blog, Lloyd Blankfein as Chairman and CEO of Goldman Sachs as well as A.G. Lafley as former Chairman, President and CEO of Proctor & Gamble, among others, are expected to testify regarding the policies of each of their companies on confidentiality and inside information and how these policies apply to their respective Boards of Directors.

There is a lesson to be learned here for all corporate directors and officers: keep your friends close, but not so close that they are privy to confidential communications. 

(Jana C. Volante, Esq., the author of this entry, is an associate with Fox Rothschild LLP, based in our Pittsburgh, PA office. Her practice concerns white collar criminal defense and commercial litigation) 

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In an earlier post we explored the relatively new SEC policy encouraging cooperation. An individual facing an SEC inquiry and his/her counsel must, of course, consider all of their available options, which in certain circumstances sensibly include not cooperating and not responding to the SEC’s questions at all.

The Fifth Amendment privilege against self-incrimination, which enables a refusal to provide testimony and records to any governmental authority, is naturally available to an individual subject to a civil investigation by the SEC, where the alleged conduct may also drive a parallel or subsequent criminal proceeding. The ways in which the same conduct can readily support both civil and criminal charges was explored in an earlier post on Raj Rajaratnam of Galleon.  See Marchetti v. United States, 390 U.S. 39, 53 (1968) (privilege available when invoker “is confronted by substantial and ‘real’ . . . hazards of incriminating); Hoffman v. United States, 341 U.S. 479, 486-87 (1951) (privilege applies where a response constitutes a “link in the chain” of evidence of criminal conduct).

Invoking the privilege carries its own set of issues. See, e.g., SEC Division of Enforcement, Enforcement Manual § 4.1.3 (2011). These include the public perception and reputational consequences of “taking the Fifth,” especially for high profile targets. See Ullmann v. United States, 350 U.S. 422, 426 (1956) (“Too many, even those who should be better advised, view this privilege as a shelter for wrongdoers. They too readily assume that those who invoke it are either guilty of crime or commit perjury in claiming the privilege”). Asserting the privilege may preclude an opportunity to provide mitigating evidence of the kind which could affect the outcome of the SEC proceeding. See, e.g., SEC v. Grossman, 887 F. Supp. 649 (S.D.N.Y. 1995) (precluding evidence about matters as to which the defendant refused to testify, including exculpatory evidence in opposition to summary judgment). Invoking the right to remain silent in a civil deposition may also subject the deponent to a devastating adverse inference or assumption by the fact-finder that the testimony or information withheld would have been unfavorable. Baxter v. Palmigiano, 425 U.S. 308, 316-20 (1976).

One way to avoid the dilemma posed by the Fifth Amendment issue is to seek a stay of the civil proceeding. However, this relief may be unavailable if the criminal prosecution is merely inchoate. A federal court in New York recently refused to stay an SEC proceeding in the face of claimed criminal jeopardy because no indictment had yet been returned, leaving the individual to the Hobson’s choice between invoking or waiving the Fifth Amendment privilege before the government’s criminal investigation was complete and thereby risking prejudice to his defenses in both matters. SEC v. Wheeler, No. 11-cv-6169-CJS (W.D.N.Y. Oct. 7, 2011).  Following the decision, the defendant in Wheeler was reported by the Rochester Business Journal to have invoked his Fifth Amendment right and declined to answer the SEC civil suit, preferring, it seems, to face the civil penalties able to be summoned by the SEC, rather than put his head in the criminal noose and risk losing his liberty.
 

(Edward J. Mullins III, Esq., the author of this entry, is an associate with Fox Rothschild LLP, based in our Roseland, NJ office. His practice concerns litigation in the areas of financial services and corporate governance, including white collar defense and securities)

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For years, the Securities and Exchange Commission has settled cases using a standard disclaimer stating that the defendant neither admits nor denies wrongdoing. This standard disclaimer allowed the SEC to claim victory and the defendant to avoid the type of public admission of wrongdoing that could be used against the defendant by shareholders or other injured parties in subsequent private lawsuits seeking damages. Thus, under this policy, the defendant could admit certain criminal conduct when criminally prosecuted by the Department of Justice or could be criminally convicted of that conduct, but the defendant could simultaneously settle civil charges with the SEC without admitting or denying nearly identical allegations in the SEC’s complaint.

Late last year, federal judge Jed Rakoff, sitting in the Southern District of New York, refused to approve a nearly $300 million settlement in an SEC action brought against Citigroup because the bank -- which had not been charged criminally -- had not been obliged under the terms of the settlement to acknowledge any wrongdoing. Chastened, the SEC on January 9th announced that it would be modifying the long-standing policy criticized by Judge Rakoff. The SEC will no longer allow defendants to settle cases involving civil fraud or insider trading charges without the defendant admitting or denying wrongdoing in circumstances where the defendant has admitted such conduct in its resolution with the DOJ or another government agency. Now, any civil settlement that the defendant enters into with the SEC will cite the admission of conduct or the conviction in the corresponding criminal case.

However, the SEC will continue to use the “neither admits nor denies” language in the large majority of SEC settlements, since most settlements are accomplished with defendants who have neither been prosecuted nor admitted wrongdoing to another government agency. Since Citigroup was not criminally prosecuted, the new policy would have left intact the formulation of that much-criticized settlement. It remains to be seen, therefore, whether the policy change implemented by the SEC will stem the judicial criticism so pointedly directed to the agency.
 

(Jana Volante, Esq., the author of this entry, is an associate with Fox Rothschild LLP, based in our Pittsburgh, PA office. Her practice concerns white collar criminal defense and commercial litigation)

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The same willful conduct which violates civil and regulatory provisions, including securities laws, often also constitutes a crime, and ignites separate civil and criminal proceedings against a defendant. The government has a greater likelihood of success in a civil or administrative proceeding where it must prove its case only by a preponderance of the evidence, or something less than beyond a reasonable doubt. So, a defendant who overcomes a criminal investigation may still face harsh civil penalties for the same or related conduct. But why would the government continue to pursue a parallel civil proceeding after obtaining a criminal conviction and an order for enormous fines, forfeitures, and restitution? Why, for example, did the SEC pursue summary judgment in its parallel civil lawsuit against former Galleon Group (“Galleon”) founder and hedge fund manager, Raj Rajaratnam, after his conviction for insider trading? What then is left for the government to gain and for the defendant to lose?

Last week’s unprecedented civil penalty levied against Mr. Rajaratnam instructs that the answer may be “a lot.” Mr. Rajaratnam must pay a $92.8 million fine, less than a month after being sentenced to 11 years in prison and pay a $63.8 million criminal fine and forfeiture. While the scale and notoriety of Mr. Rajaratnam’s case have produced the longest prison sentence and largest civil penalty of any insider trading case (and may be an example of insider trading enforcement pushed to its limit), he also provides an object lesson that convicted defendants may not in parallel civil proceedings rest comfortably on the argument that additional civil penalties may be avoided as superfluous. The federal judge overseeing this civil case rejected this very argument and sternly explained that “SEC civil penalties, most especially in a case involving such lucrative misconduct as insider trading, are designed, most importantly, to make such unlawful trading a money-losing proposition not just for this defendant, but for all who would consider it, by showing that if you get caught . . . you are going to pay severely in monetary terms.” Criminal fines, on the other hand, reflect related, but different, values of blameworthiness, and criminal restitution.

Of further note, the SEC’s motion for summary judgment following Mr. Rajaratnam’s conviction also sought civil penalties against Galleon, which settled before prior to the decision. A parallel civil proceeding exposes to monetary liability co-defendants who lack, or at least cannot be convicted of having had, criminal intent. The targets of civil investigations should not underestimate the consequences that may befall them following a related criminal conviction, particularly when the government need only prove a civil and regulatory violation by a mere preponderance.
 

(Edward J. Mullins III, Esq., the author of this entry, is an associate with Fox Rothschild LLP, based in our Roseland, NJ office. His practice concerns litigation in the areas of financial services and corporate governance, including white collar defense and securities.)

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The Securities and Exchange Commission recently released the final versions of the Dodd-Frank whistleblower regulations, to become effective on August 12th. A previous post addressed the statutory whistleblower scheme, which these final rules implement fully.

The final form of the rules was accompanied by a release containing the SEC’s analysis of the comments received as to its proposed rules, and the reason for the resulting changes made in the final version. (The analysis, entitled “Implementation of the Whistleblower Provisions of Section 21F of the Securities Exchange Act of 1934,” is available as a .pdf file on the Commission’s website) (hereafter, “Release, at ____”). The SEC has estimated that the financial rewards awaiting whistleblowers whose disclosures meet the eligibility criteria will result in as much as 30,000 tips per year. (Release, at 209).

The final rules merit more extended analysis than is possible in this limited space. But one of the hot-button corporate compliance issues raised by the rules when first proposed was the effect on corporate compliance programs of a bounty system which, it was feared, would incentivize employees to avoid their company’s internal procedures in favor of direct report to the SEC. The corollary fear was that corporate management, and outside counsel, would not have an ability to determine when negative information about the company was reaching the SEC.

Sensitive to comments that the proposed rules insufficiently buttressed the role of internal compliance, the final rules seek to give compliance a boost without requiring first resort to internal mechanisms. Rule 21F-6 (17 C.F.R. § 240.21F-6), for example, lists a series of factors to be considered by the SEC in setting the amount of reward, and “participation in internal compliance systems” is a criterion which may increase a reward, while “interference with internal compliance and reporting systems” may cause a decrease (Release, at 118-126).

Of particular interest to those who conduct internal investigations as outside counsel, the final rules include the following points: (a) Rule 21F-4 (17 C.F.R. § 240.21F-4) requires that any qualifying disclosure be “voluntary,” which excludes information provided to the SEC pursuant to a duty to a contractual duty to the SEC. The SEC’s commentary makes clear that the Rule would not consider “voluntary” a statement made to the SEC pursuant to a cooperation or similar agreement with the Department of Justice obligating the individual to provide information to government agencies in general (Release, at 38); and (b) for the disclosure to qualify as “original information” it cannot, under the terms of the same Rule, derive from knowledge obtained by the individual as the result of what a United States court determines was a violation of criminal law, state or federal (Release, at 80).
 

(Alain Leibman, Esq., the author of this entry and a co-author of this blog, is a partner with Fox Rothschild LLP, based in our Princeton, NJ office. A former decorated federal prosecutor, he practices both criminal defense and commercial litigation in federal and state courts)

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Earlier posts, here, here and here, discussed the announced intention of the Securities and Exchange Commission to newly employ prosecutorial-type devices in an effort to bring a greater number of enforcement actions. One such tool, the deferred prosecution agreement, or DPA, has long been used by U.S. Attorney’s Offices to bring corporate targets into compliance with law and emplace a system within the corporation to ensure continued compliance.

On May 17th, the SEC announced that it had executed its very first DPA, with Tenaris S.A. Tenaris, a manufacturer of piping used in the energy industry, had apparently paid off Uzbekistani officials in order to win multiple government contracts to supply oilfield equipment. Although the DPA was entered into as part of a no-admission settlement, in which Tenaris disgorged nearly $5 million in profits on the contracts obtained through bribery, the DPA contained a length factual statement by the SEC of the offense and the corrupted contract bidding process. In nearly thirty paragraphs, the DPA set forth in indictment-like terms the series of communications, secret arrangements, and illegal payments by which Tenaris obtained information about others’ supposedly secret bids and its own resulting lowest bids, enabling the company to secure a series of lucrative contracts.

Tenaris agreed in the DPA not to publicly dispute the accuracy of those facts; to cooperate with the SEC and encourage current and former officers and employees to also cooperate; and to enforce newly-strengthened internal codes of conduct. Interestingly, the SEC did not require -- as many prosecutors’ offices have required -- the corporation to have segments of its activities overseen by a third-party monitor. This omission may have been due to the relatively isolated nature of the misconduct within this global entity and the self-reporting of that activity by Tenaris to the SEC and Department of Justice.
 

(Alain Leibman, Esq., the author of this entry and a co-author of this blog, is a partner with Fox Rothschild LLP, based in our Princeton, NJ office. A former decorated federal prosecutor, he practices both criminal defense and commercial litigation in federal and state courts)

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A recent post here discussed the new Dodd-Frank whistleblower provisions. Among them is a bounty program which entitles persons, either acting alone or jointly with others, who provide information of violations to the Securities and Exchange Commission to receive a portion of monies eventually recovered by the SEC. See 15 U.S.C. § 78u-6(a). There is also a companion anti-retaliation provision which protects a whistleblower from discharge if he or she either provides information of violations to the SEC or makes disclosures to others of information required under a defined and limited number of statutes, such as Sarbanes-Oxley. See 15 U.S.C. § 78u-6(h).

In an opinion of first impression, a district court recently held that a fired whistleblower could avail himself of the anti-retaliation provisions, and accompanying private right of action, even though he did not directly provide any information to the SEC or to other agencies within any of the other defined statutory categories. Egan v. TradingScreen, Inc., 2011 WL 1672066 (S.D.N.Y., May 4, 2011).

Egan, an employee of financial software company TradingScreen, had passed information to the company president about the CEO’s diversion of company assets. The president in turn communicated the information to independent Board members, who retained outside counsel to conduct an investigation. Counsel interviewed Egan, among others, and issued a report detailing the CEO’s improper actions, a report which was provided to the SEC. Both the president and Egan were fired by the CEO, and Egan brought a private damages action under the Dodd-Frank anti-retaliation provisions.

Egan, however, had not himself made any disclosure to the SEC, or to any other agency. The company and its CEO claimed that Egan was simply interviewed by outside counsel and that he was not the exclusive source of information in the hands of the SEC, disentitling Egan to rely on the anti-relation provisions. Yet, the district court denied a motion to dismiss the claim. Judge Sand held that Egan had acted jointly with outside counsel, the former president and the independent directors to provide the necessary information to the SEC.

The holding of Egan, if undisturbed on appeal, may substantially expand both the group of bounty-eligible and discharge-proof whistleblowers to include any number of corporate employees who are interviewed during an internal investigation and can later claim to have provided an incrementally new piece of information with the intention that it be communicated to the SEC. Arguably, the legislation was intended to focus its benefits more narrowly on those who actually communicate eligible information to the SEC, and other lower courts may well adopt a narrower construction.
 

(Alain Leibman, Esq., the author of this entry and a co-author of this blog, is a partner with Fox Rothschild LLP, based in our Princeton, NJ office. A former decorated federal prosecutor, he practices both criminal defense and commercial litigation in federal and state courts)

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A recent entry here discussed the adoption by the Securities and Exchange Commission of a set of enforcement tools new to the agency, but hardly new in the law enforcement world. We described the SEC’s adoption last year of a formal cooperation policy, designed to garner usable leads and evidence for the agency while assuring cooperating individuals that they would not be sued, or limiting their exposure to suit, based on the nature and quality of their cooperation.

A formalized system of assuring non-prosecution in exchange for information and testimony has, of course, been a staple of U.S. Attorney’s Offices for many years, and the SEC has been slow to embrace its utility in the civil context. So, one year into the brave new world of soliciting cooperators, how is the SEC doing?

According to recent comments from Bob Khuzami, head of SEC Enforcement, just so-so. As reported in The Blog of Legal Times, Mr. Khuzami spoke on May 6th to a securities law conference in Colorado about the state of the new venture. He is reported to have said that only about 25 individuals to date have signed agreements with the SEC for reduced or no sanctions in exchange for their assistance.

Predictably, the blame for the very modest numbers to date is placed by Mr. Khuzami on the uncertainty of lawyers for individuals regarding the effect of their cooperation and admissions on potential and related DOJ criminal proceedings. While that hesitation is entirely appropriate, a fuller explanation for the fitful start to the program would likely also include an acknowledgment that the SEC’s attorneys have not yet become adept at making the early, and sometimes case-dispositive, judgments needed to identify and distinguish eligible cooperators from investigation targets.

Presumably, the SEC’s attorneys will over time gain a facility in making quick determinations, as individuals’ attorneys also achieve greater confidence in predicting the consequences of cooperating with a civil agency. As those respective learning curves flatten and become stable, one would expect to see an ever-increasing use of the cooperation vehicle in SEC investigations.

(Alain Leibman, Esq., the author of this entry and a co-author of this blog, is a partner with Fox Rothschild LLP, based in our Princeton, NJ office. A former decorated federal prosecutor, he practices both criminal defense and commercial litigation in federal and state courts)

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Earlier this month, I had the privilege of participating as a panelist the ABA Business Law Section’s spring meeting concerning the Dodd-Frank Act’s whistleblower provisions. Those statutory provisions, together with follow-on regulations, are intended to better equip the Securities and Exchange Commission to perform its enforcement function by incentivizing corporate insiders to provide information about corporate wrongdoing, such as insider trading, reporting violations, or Foreign Corrupt Practice Act violations.

The new SEC whistleblowing regime borrows from existing, and successful, protocols long-established by the Internal Revenue Code and the False Claims Act. The IRS rewards tipsters with a percentage of eventual tax recoveries, while typically allowing the sources of the information to remain anonymous. See 26 U.S.C. § 7623. The FCA in contrast requires the filing of a qui tam complaint which is sealed for a period of time while the Department of Justice evaluates the matter and determines whether or not to take over the civil, treble-damages litigation and, commonly, to initiate a criminal investigation of the underlying misconduct; successful civil lawsuits yield percentage recoveries for the initial qui tam complainant. See 31 U.S.C. § 3729 et seq. The SEC model does not involve the filing of a complaint, even under seal, but the submission of a claim form, and the anonymity of the informant is not assured. An excellent discussion of these different, but related, approaches is found in co-panelist Michael E. Clark’s The Dodd-Frank Act’s Bounty Hunter Provisions, 44 Rev. of Sec. Comm. Reg., No. 3, Feb. 9, 2011.

As part of a tactical modernization, the SEC last year finally adopted a formal cooperation policy, allowing the Enforcement Division to assure cooperating individuals that they would not be sued, or limiting their exposure to suit, all tied to the nature and quality of their cooperation. The adoption of both a whistleblowing reward system and a formalized methodology for recognizing and developing cooperation may seem to be radical changes for the SEC, but attorneys with experience in white-collar defense are intimately familiar with both models, since they have for years been staples of the Department of Justice.

The adoption by the SEC of these new/old weapons raises a number of interesting questions, including: (i) do internal corporate governance mechanisms need to be modified to capture reports of wrongdoing before the reporters go to the SEC and to incentivize officers and employees to first exhaust their internal reporting approaches; (ii) are these SEC regulations broadly destructive of internal corporate cultures and concepts of attorney-client privilege and fiduciary duties owed to the company and shareholders; and (iii) does the new whistleblowing culture make it even more imperative that in-house counsel act quickly to enlist outside counsel, with experience in these new/old issues, and that outside counsel move more quickly to conduct investigations of activities which are feared to be the subject of a whistleblower report?

These and other Dodd-Frank whistleblower issues will be developed through further entries on this blog.

(Alain Leibman, Esq., the author of this entry and a co-author of this blog, is a partner with Fox Rothschild LLP, based in our Princeton, NJ office. A former decorated federal prosecutor, he practices both criminal defense and commercial litigation in federal and state courts)
 

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