Federal and State Criminal Activities

confusion.jpgLawyers have often been the brunt of cruel jokes. But now, a recent study reported on by the Bureau of National Affairs shows, lawyers are the target of securities regulators. Why the sudden interest?

For one, cooperation initiatives between regulators and those caught violating securities law convince these people to turn on their lawyer who

Regulators seem to believe that lawyers and their law firms act like ostriches when it comes to their clients and Ponzi schemes.  For example, a law firm paid $25 million to settle malpractice claims over legal services rendered to certain hedge funds and related entities controlled by a Ponzi Scheme artist, Arthur Nadel.  See SEC

The DOJ has been making increasing and aggressive use of the Financial Institutions Reform Recovery and Enforcement Act (“FIRREA”)

FIRREA was an outgrowth of the savings and loan crisis in the late 80’s and early 90’s.  The DOJ is looking to prosecute and obtain civil penalties by using this statute.  This statute allows the DOJ to bring

Incredibly over the last several years, both the DOJ and SEC have been relentless in their aggressive enforcement of the Foreign Corrupt Practices Act.  As part of this pursuit, the FCPA’s facilitation payment exception might not be as viable as it once was, thereby, defending these actions has gotten that much more complicated.

Many are suggesting

Despite recent changes to the SEC’s no admit/no deny settlement policy, FCPA defense attorneys still have options. 

As many know, the SEC will no longer allow settling defendants either to admit nor deny the SEC’s allegations when convicted on parallel criminal charges or where facts were admitted in a criminal proceeding.  In particular, defense attorneys could differentiate the SEC

Companies that acquire or invest in offshore entities or in entities that conduct business overseas may inherit FCPA risks.

Clearly, the DOJ and the SEC are viewing these transactions and the resulting combinations with a jaundiced eye.  These regulators, most likely, will begin investigations, and, possibly, commence actions.  In fact, there have been recent FCPA actions

Okay, no one is suggesting that you start a Ponzi scheme!!!  However, now, that we have your attention, you should be aware of the United States Court of Appeals for the Second Circuit’s decision affirming a 25-year prison sentence for Ponzi scheme operator, Nicholas Cosmo.  See United States v. Cosmo, 2d Cir., No. 11-4506, 9/20/12, and

Over the course of many years, I have been questioned by American BDs as to their responsibilities for sales to people outside the United States.  My response has always been that they are required to obtain an opinion from counsel in those jurisdictions before proceeding.  Most likely, those foreign jurisdictions may have registration requirements before conducting business in their

Private equity companies have recently been hit with a barrage of regulatory subpoenas.

Responding to these subpoenas may cost the private equity firms to expend millions of dollars.  These entities should have D&O liability insurance.  Initially, the entity must make sure that responding to such a subpoena falls within the definition of a claim.  Some policies may

This blog entry about hedge fund insurance coverage almost sounds like a car insurance commercial.  Sadly, both are critical in today’s modern society.

Given the current regulatory environment, volatile market conditions, and the public perception of the industry, hedge funds face enormous risk in doing business.  Hedge funds should carry both D&O and E&O Liability Insurance to protect directors, officers, managers and the