The Eighth Circuit recently held that only a defendant who demonstrably lacked knowledge of the substance of an SEC rule or regulation which he is charged with violating can avoid jail under the no-knowledge safe harbor provision in Section 78ff of Title 15; it is not enough for the defendant to show that he mistakenly thought the rule or regulation did not apply to his conduct.
Rajat Gupta, the latest subject of the government’s war on insider trading, may have shared confidential information regarding Goldman Sachs and Proctor & Gamble with his high profile business contact Raj Rajaratnam for friendship, and not for profit.
Defendant must actually be under indictment, says federal court in Western District of New York, before his criminal culpability is sufficient palpable and imminent to permit a stay of a parallel SEC action against him.
Facing mounting criticism of its no-admission settlement policy, the SEC has modified the policy, but in doing so is unlikely to mollify its critics.
Federal judge imposes unprecedented $92.8 million civil penalty against hedge fund titan Raj Rajaratnam in his parallel S.E.C. lawsuit, which was in addition to $63.8 million in criminal penalties, and a record 11-year prison sentence imposed earlier.
Sensitive to the expressed concerns of corporate counsel, the SEC’s final release of Dodd-Frank whistleblower rules enhances the recovery for individuals who first report wrongdoing through internal compliance programs, but does not require that they do so in order to recover in the first instance.
The SEC has for the first time entered into a deferred prosecution agreement, with a global manufacturer of oil industry equipment which had bribed Uzbekistan officials in order to secure contract awards. The SEC chose, however, not to require a third-party monitor, signalling that self-reporting companies with strong internal compliance programs may avoid the most onerous conditions of conventional DPA’s.
A corporate employee who provides information of wrongdoing to outside counsel may qualify under Dodd-Frank’s whistleblower provisions even though he did not actually communicate with the SEC.
One year into its effort to solicit cooperators in order to make securities cases, the SEC is off to a halting start, signing up only 25 individuals.
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.