In this article for Law.com, Partner Robert R. Stauffer and Associate Andrew D. Kennedy note that the recently enacted Dodd-Frank Act may increase the risk of government enforcement for companies covered by it because of the incentive it creates for whistleblowers - between 10 and 30 percent of any recovery in excess of $1 million.  The authors put the new law into context by highlighting other whistleblower provisions already in effect, describing the whistleblower provisions in the Dodd-Frank Act and discussing the steps public corporations should take in light of the increased scrutiny they may face under the new law. 

Jenner & Block has published its 2010 issue of the “FCPA Business Guide.”  This unique resource provides practice guidance for companies competing in the global marketplace and analyzes the latest developments in FCPA enforcement.

The number of FCPA enforcement matters brought by the DOJ and SEC increased yet again in 2009.  Two important trends that are documented in the Guide are incipient signs of possible changes in the use of corporate monitors and an increased focus by enforcement authorities on prosecution of individuals.  In 2009 alone, 21 of the DOJ’s 26 cases and four of the SEC’s 14 cases were brought against individuals.  Due to the high personal stakes involved, most individuals elect to litigate these matters and, as a result, 2009 saw an unprecedented number of FCPA trials.

Other important trends discussed in the guide include the DOJ’s and SEC’s use of aggressive tactics -- such as undercover operations, and increased cooperation between the DOJ and foreign enforcement authorities.

This insightful guide uses several real-world examples of enforcement activities and DOJ opinions to illustrate how to avoid running afoul of the FCPA.  It also addresses typical questions that a company with a multinational presence might have about remaining in compliance with the FCPA. 

Jenner & Block’s FCPA Practice Group offers a wealth of experience, with two former Assistant U.S. Attorneys, including the former Chief of the Justice Department’s international fraud enforcement component, and the former Chief of the Criminal Division of the U.S. Attorney’s Office for the Eastern District of New York.  In addition, the Practice Group includes three former SEC enforcement attorneys, including the former Associate Director of the Division of Enforcement, and two former Assistant Chief Litigation Counsels. We provide a wide array of services to clients facing FCPA compliance issues and advise clients on the development, implementation, and auditing of their FCPA compliance programs.  Because our attorneys have a heightened understanding of Sarbanes-Oxley issues, we approach the FCPA with a profound sensitivity to the intersection between these two statutory and regulatory regimes.

For more information about this publication or Jenner & Block's FCPA Practice, Contact:

Joseph P. Covington jcovington@jenner.com

Thomas C. Newkirk tnewkirk@jenner.com

Andrew Weissmann aweissmann@jenner.com

Iris E. Bennett ibennett@jenner.com

If you would like a hardcopy of this publication mailed to you, please contact Elsie Henson at ehenson@jenner.com or at 202-639-6894.

In this client advisory, Partners Kali N. Bracey, Lorelie S. Masters, Matthew L. Jacobs, Jerry J. Burgdoerfer, Ronald L. Marmer and Andrew Weissmann discuss increased investigations by state and federal authorities into alleged violations of the securities laws and the issue of getting D&O insurers to defend or pay claims in these situations. Specifically, the advisory outlines how a decision by Judge Richard Berman of the United States District Court of the Southern District of New York gave D&O policyholders ammunition against insurers.

In this article, Partner Robert R. Stauffer and Associate Sandi J. Toll  discuss the Seventh Circuit Court of Appeals's decision to reject its long-standing minority position that an FCA lawsuit is "based upon" a public disclosure when the relator’s allegations are essentially dependent upon publicly disclosed information and are actually derived from that information. Instead, in Glaser v. Wound Care Consultants, Inc., et al., No. 07-4036, 2009 WL 1885500 (7th Cir. July 2, 2009), the Seventh Circuit held that courts in that jurisdiction will now determine whether a relator’s allegations are based upon a public disclosure solely by considering whether the relator’s allegations are "substantially similar" to those already in the public domain. This new, more lenient standard will make it easier to obtain dismissals of qui tam lawsuits on jurisdictional grounds and potentially help companies avoid the extensive costs associated with defending this type of litigation.

In this article, Partners Joseph P. Covington and Iris E. Bennett and Associate Martina E. Vandenberg discuss the U.S. Department of Justice’s current FCPA enforcement approach as reflected in the agency's expansive reading of the FCPA statutory provisions, such as the "in furtherance of" clause.  According to the attorneys, companies must consider how federal enforcement authorities will view the question of what constitutes conduct “in furtherance of” an improper payment if they wish to minimize their FCPA risk.

Partner Richard F. Ziegler, a former general counsel of the 3M Corporation, recently wrote an article, published as a stand-alone paper by the Center for Ethical Business Cultures, on practical steps boards of directors can take to assure that their companies' compliance and ethics programs are effective. The article was also just published in shorter form in the July 2008 issue of Corporate Secretary magazine. The article identifies four key issues that directors face in implementing post-Sarbanes-Oxley corporate ethics and compliance programs. Mr. Ziegler's article dubs them the "state-of-the art dilemma," the "distant board dilemma," the "confidentiality dilemma," and the "police state dilemma." The article includes pragmatic suggestions directors can take to overcome these obstacles. The article is entitled "New Obstacles in Setting the Tone at the Top ... and Some Solutions."

On June 6, 2008, Jenner & Block filed an amicus brief before the Second Circuit advocating new limits on the scope of corporate criminal liability.  Supporting reversal of the criminal conviction of the corporate defendant, Ionia Management, the brief urges the court to follow the dictates of three recent Supreme Court decisions that severely restrict the application of respondeat superior.  The brief maintains that the failure of lower federal courts to heed the principles of these cases, and the misreading of the single Supreme Court decision 99 years ago addressing criminal corporate liability, has resulted in the anomalous situation that it is currently easier to impute liability in a criminal, rather than a civil, case.

The brief was filed on behalf of the Association of Corporate Counsel, the U.S. Chamber of Commerce, the National Association of Criminal Defense Lawyers, the National Association of Manufacturers, the New York State Association of Criminal Defense Lawyers, and the Washington Legal Foundation.  

 Click here to view a copy of the brief.

On April 3, 2008, Partner Andrew Weissmann testified before the House Judiciary Committee's Subcommittee on Crime, Terrorism, and Homeland Security regarding current proposals to amend federal restitution laws, including the proposed "Preservation of Assets for Restitution Act."

In his testimony, Mr. Weissmann analyzed how the proposed bill would allow the pre-conviction, and even pre-indictment, ex parte restraint of untainted assets that may be needed to satisfy a restitution order.   Mr. Weissmann stated the bill has a dearth of procedural safeguards for defendants and putative defendants and would lead to an unwarranted increase in prosecutorial power, without concomitant benefits to the public and crucial procedural protections.  He also testified about the potential Draconian impact on corporate and individual defendants if the bill were enacted.

On April 3, 2008, Partner Andrew Weissmann testified before the House Judiciary Committee's Subcommittee on Crime, Terrorism, and Homeland Security regarding current proposals to amend federal restitution laws, including the proposed "Preservation of Assets for Restitution Act."

In his testimony, Mr. Weissmann analyzed how the proposed bill would allow the pre-conviction, and even pre-indictment, ex parte restraint of untainted assets that may be needed to satisfy a restitution order.   Mr. Weissmann stated the bill has a dearth of procedural safeguards for defendants and putative defendants and would lead to an unwarranted increase in prosecutorial power, without concomitant benefits to the public and crucial procedural protections.  He also testified about the potential Draconian impact on corporate and individual defendants if the bill were enacted.

In this article, Partner Andrew Weissmann discusses the evolving standards of corporate criminal liability.  According to Mr. Weissmann's article, despite benefits from legal reforms and DOJ and SEC efforts in the wake of Enron’s demise, this increased scrutiny of corporate malfeasance has also brought to light a significant fissure in the current legal system, namely the scope of corporate criminal liability.  Mr. Weissmann notes that in spite of a company's best efforts to deter corporate criminality, a company can nevertheless be held criminally liable based on the conduct of a single employee, even if that employee acted in contravention of corporate policy.  Mr. Weissmann notes that this current legal standard is the product of federal appellate case law, as neither the Supreme Court nor Congress has addressed this issue. 

Mr. Weissmann argues for a reform of the standard for corporate criminal liability that ties corporate criminal liability to the lack of an effective compliance program. Such a reform would create greater incentives for boardrooms to devise, implement, and monitor compliance measures.  By placing the burden on the government to prove that a company’s program was inadequate as a prerequisite to criminal corporate liability, the article says, these reforms will also provide a systemic check on prosecutors who seek to institute such actions in the future, helping to ensure that they do so only where the company should be justifiably responsible for the criminal conduct of its employees.

This Client Advisory, authored by Partners Andrew Weissmann, Robert R. Stauffer, Alex Lipman and Associate Ana R. Bugan, describes the latest development in the so-called KPMG case, namely the dismissal of charges against thirteen of sixteen former KPMG employees based on the finding by the Honorable Lewis A. Kaplan, District Court Judge for the Southern District of New York, that the government violated those defendants' Fifth and Sixth Amendment rights by causing their employer to withhold advancement of attorneys' fees.

In three previous client advisories, Jenner & Block followed the developments in this criminal case involving sixteen former KPMG employees and others accused by the government of promoting allegedly illegal tax shelters.  See Jenner & Block Client Advisories: District Court Rules the Government’s Use of the Threat of Corporate Indictment Was Unconstitutional; United States v. Stein; Second Circuit Rejects Ancillary Jurisdiction in Fee Indemnification Claim Against KPMG.

The following client advisory discusses recent scrutiny by Congress and one court of the Thompson Memorandum, which may result in a revision of the Memorandum or in new guidance to prosecutors as to its implementation.

In this article from The Corporate Compliance & Regulatory Newsletter, Jenner & Block Partner Andrew Weissmann discusses the role of the Enron scandal in changing corporate perspectives on compliance programs. 

Mr. Weissmann is the former Enron Task Force Director for the U.S. Department of Justice, and the former Chief of the Criminal Division in the U.S. Attorney’s Office for the Eastern District of New York.  His practice concentrates on internal corporate compliance and investigations, including representation before the Department of Justice, the Securities and Exchange Commission and state and local authorities.

The following client advisory discusses a recent landmark ruling from a federal district court striking down a controversial portion of the Thompson Memorandum requiring U.S. Attorneys to consider whether a company was paying an employee's legal fees when deciding to charge that company with a crime.

The attached Client Advisory discusses the recent conviction and sentencing of two officers of American Rice, Inc. for violations under the Foreign Corrupt Practices Act ("FCPA").

The following article, "Preventing Wrongful Convictions," appeared in the September-October 2002 edition of Judicature, the journal of the American Judicature Society.  It was written by Jenner & Block Partner Thomas P. Sullivan, who served as Co-Chair of Illinois Governor George Ryan's Commission on Capital Punishment.

An article discussing the implications of the Sarbanes-Oxley Act of 2002 and the rule amendments that the Securities and Exchange Commission (SEC) adopted on August 29 in response to the new law.

A summary of the key provisions of the Sarbanes-Oxley Act of 2002.