Today, President Obama will sign the financial reform bill passed by Congress. One of the little known provisions of the law allows whistle-blowers to recover a bounty for disclosing securities violations committed by their employers. This new law may create new challenges and risks for companies operating in the US. (more…)
Archive for July, 2010
Caught in the storm of a corporate internal investigation, many executives never stop to consider how being indicted would impact themselves, their families, their finances and their hard-earned reputations. One potential consequence of an internal investigation is that the corporation will provide the government with the investigation’s findings or that the corporation will enter into a plea agreement with the government that may leave executives out in the cold. Consider the recent article “Executives find reputations don’t return after criminal charges dropped” from Bloomberg News and the “You Are Closer to Being Indicted Than You Think… ” article in the Construction Financial Management Association magazine describing the wrenching experiences of executives who were indicted but had charges dismissed pre-trial or were acquitted at trial. (more…)
On Tuesday, June 29, 2010 the U.S. Supreme Court vacated the government corruption convictions against former Alabama Gov. Don Siegelman and ex-HealthSouth CEO Richard Scrushy. The Court ordered the 11th U.S. Circuit Court of Appeals to review the matters in light of the ruling in Skilling v. United States, 561 US ___ (2010), the case of former Enron chief Jeffrey Skilling.
In the Skilling case (reported in our blog), the Supreme Court interpreted the honest services fraud statute, 18 U.S.C. § 1346, which prohibits “a scheme or artifice to deprive another of the intangible right of honest services.” The Supreme Court limited the scope of the honest services fraud statute so that it covers only bribes and kickback schemes. In other words, the Supreme Court limited the scope of prosecutions under the honest service fraud statute to those cases where prosecutors put forward evidence that defendants accepted bribes or kickbacks. (more…)