TreatiseTreatise

Securities Investigations: Internal, Civil and Criminal (2nd Edition)

 by Mayer Brown LLP , Steven Wolowitz, Richard M. Rosenfeld, Lee H. Rubin
 
 Copyright: 2010-2017
 Last Updated: August 2017

 Product Details >> 

Product Details

  • ISBN Number: 9781402414459
  • Page Count: 784
  • Number of Volumes: 1
  •  

Securities Investigations provides the legal knowledge and practical strategies necessary to deal effectively with government investigations and internal investigations. The treatise guides attorneys in: conducting internal investigations; cooperating with the SEC and DOJ during investigations in ways that protect clients’ interests; implementing effective compliance measures; designing compliance programs that avoid common compliance deficiencies and help stave off lengthy SEC examinations; supporting clients during their investigation testimony; and handling a grand jury investigation.

Securities Investigations provides actionable coverage, beginning with an overview of enforcement efforts and response strategies, followed by discussions of:

  • Relevant substantive legal provisions, including the Securities Act of 1933, the Securities Exchange Act of 1934, and the Sarbanes-Oxley Act of 2002;
  • An examination of internal investigations, including SEC, DOJ, and FINRA Guidance, and issues under the attorney-client privilege and the work-product doctrine;
  • A detailed review of the types of securities investigations, including SEC and FINRA investigations, and issues under cross-border regulation and the Foreign Corrupt Practices Act; and
An in-depth examination of the various issues applicable to all types of securities investigations, including whistleblower protection under the Dodd-Frank Act and privacy considerations.
  Table of Contents
  Preface to Second Edition
Chapter 1: Overview of Federal, State and SRO Securities Enforcement Efforts: Strategies for Responding to Multiple Investigations and Related Actions
  • § 1:1 : Overview1-2
  • § 1:2 : SEC Enforcement1-5
  • § 1:3 : Self-Regulatory Organizations1-6
    • § 1:3.1 : Generally1-6
    • § 1:3.2 : FINRA1-6
    • § 1:3.3 : PCAOB1-7
  • § 1:4 : State Regulation1-8
  • § 1:5 : Criminal Prosecution1-10
Chapter 2: Civil Enforcement of Federal Securities Laws—Substantive Violations
  • § 2:1 : Introduction: Recent Civil Enforcement2-2
  • § 2:2 : SEC Enforcement of Securities Regulations2-3
  • § 2:3 : The Securities Act of 19332-3
    • § 2:3.1 : Generally2-3
    • § 2:3.2 : Section 122-3
    • § 2:3.3 : Section 172-5
  • § 2:4 : Securities Exchange Act of 19342-6
    • § 2:4.1 : Generally2-6
    • § 2:4.2 : Section 10(b)2-6
      • [A] : Generally2-6
      • [B] : Rule 10b-52-8
    • § 2:4.3 : Section 13—Reporting Requirements2-9
    • § 2:4.4 : Section 14(e)2-12
  • § 2:5 : Sarbanes-Oxley Act of 20022-13
  • § 2:6 : The Dodd-Frank Act of 20102-13
  • § 2:7 : Other Securities Regulations2-14
    • § 2:7.1 : Investment Advisers Act of 19402-14
    • § 2:7.2 : Investment Company Act of 19402-15
    • § 2:7.3 : Insider Trading Sanctions Act of 19842-16
    • § 2:7.4 : Insider Trading Securities Fraud Enforcement Act of 19882-16
    • § 2:7.5 : Stop Trading on Congressional Knowledge (STOCK) Act of 20122-17
    • § 2:7.6 : Recent Insider Trading Cases2-17
  • § 2:8 : Extraterritorial Application of U.S. Securities Laws2-25
  • § 2:9 : Aiding and Abetting Liability Under the Securities Laws2-29
  • § 2:10 : Remedies Available to the SEC2-32
    • § 2:10.1 : Judicial Remedies2-32
    • § 2:10.2 : Monetary Penalties2-33
    • § 2:10.3 : Disgorgement2-34
    • § 2:10.4 : Officer and Director Bars2-35
    • § 2:10.5 : Cease-and-Desist Orders2-37
    • § 2:10.6 : Section 15(c)(4) Orders2-39
    • § 2:10.7 : Administrative Fines2-39
    • § 2:10.8 : Company Controls2-42
    • § 2:10.9 : Bonus Forfeiture2-42
  • § 2:11 : Fair Funds2-43
Chapter 3: Criminal Statutes Charged in Securities Cases
  • § 3:1 : Introduction3-1
  • § 3:2 : Securities Act and Exchange Act Violations3-3
    • § 3:2.1 : Generally3-3
    • § 3:2.2 : Section 10(b) and Rule 10b-5 of the Exchange Act3-4
    • § 3:2.3 : Section 13 of the Exchange Act3-11
    • § 3:2.4 : Sections 5 and 17(a) of the Securities Act3-13
  • § 3:3 : Title 18 Violations3-14
    • § 3:3.1 : Conspiracy3-14
    • § 3:3.2 : Fraud Statutes3-16
      • [A] : Mail and Wire Fraud3-16
      • [B] : Bank Fraud3-20
      • [C] : Sarbanes-Oxley Additions to Fraud Statutes in Title 183-20
    • § 3:3.3 : Obstruction of Justice Statutes3-22
    • § 3:3.4 : Theft of Government Property3-25
Chapter 4: Organizational Sentencing Guidelines
  • § 4:1 : Important Considerations Regarding “Sentencing” of Business Organizations4-1
  • § 4:2 : Organizational Guidelines: A Brief History4-4
  • § 4:3 : Guidelines Implications for Securities Law Violations4-7
    • § 4:3.1 : Generally4-7
    • § 4:3.2 : Restitution4-8
    • § 4:3.3 : Fines4-9
    • § 4:3.4 : Other Remedial Orders4-10
  • § 4:4 : Diminished Impact of Organizational Guidelines4-10
    • § 4:4.1 : Impact of Booker on Organizational Guidelines4-11
    • § 4:4.2 : Increasing Emphasis on Pre-Charge Negotiations: What Constitutes Cooperation?4-12
      • [A] : Historical Use of DPAs and NPAs4-15
  • § 4:5 : Rise of Deferred and Non-Prosecution Agreements4-24
  • § 4:6 : Conclusion4-29
Chapter 5: The Role of Corporate Internal Investigations
  • § 5:1 : Overview5-2
  • § 5:2 : The Constituencies for an Internal Investigation5-3
  • § 5:3 : Statutory Provisions Implicating Internal Investigations5-5
    • § 5:3.1 : Generally5-5
    • § 5:3.2 : The Sarbanes-Oxley Act5-5
      • [A] : Generally5-5
      • [B] : Duties of the Audit Committee5-5
      • [C] : Duties of the Chief Executive Officer and Chief Financial Officer5-6
      • [D] : Duties of Auditors5-7
      • [E] : Duties of Lawyers5-8
    • § 5:3.3 : Duties with Respect to Employees5-9
  • § 5:4 : SEC Guidance Relating to Internal Investigations5-10
    • § 5:4.1 : The Seaboard Report5-10
    • § 5:4.2 : Principles for Imposing Monetary Penalties5-13
    • § 5:4.3 : The SEC’s “Cooperation Initiative”5-14
      • [A] : Generally5-14
      • [B] : Cooperation Tools5-15
      • [C] : SEC’s Use of DPAs and NPAs5-16
    • § 5:4.4 : Waiver of Privilege and Work Product Protection5-17
      • [A] : Generally5-17
      • [B] : Confidentiality Agreements and Collateral Proceedings5-18
    • § 5:4.5 : The Benefits of a Robust Internal Investigation5-19
  • § 5:5 : Department of Justice Guidance Relating to Internal Investigations5-19
    • § 5:5.1 : Generally5-19
    • § 5:5.2 : The Filip Memorandum5-20
    • § 5:5.3 : The DOJ and the SEC Resource Guide to the FCPA5-22
    • § 5:5.4 : DOJ’s Corporate Compliance Counsel5-23
    • § 5:5.5 : Information Relevant to Earning Cooperation Credit5-24
      • [A] : Generally5-24
      • [B] : “Relevant Facts”5-25
      • [C] : “Core” Privileged Information5-26
    • § 5:5.6 : The Yates Memorandum5-26
    • § 5:5.7 : Deferred and Non-Prosecution Agreements in Criminal Actions5-27
      • [A] : Generally5-27
      • [B] : Deutsche Bank AG5-28
      • [C] : Lending Processing Services Inc.5-29
    • § 5:5.8 : Independent Corporate Monitors5-30
      • [A] : Generally5-30
    • § 5:5.9 : Federal Sentencing Guidelines5-32
  • § 5:6 : FINRA Guidance As It Relates to Internal Investigations5-34
    • § 5:6.1 : Generally5-34
    • § 5:6.2 : The Benefits of “Extraordinary Cooperation”5-35
    • § 5:6.3 : What Is “Extraordinary Cooperation”?5-36
      • [A] : Generally5-36
      • [B] : Self-Reporting of Violations5-36
      • [C] : Extraordinary Steps to Correct Deficient Procedures and Systems5-37
      • [D] : Extraordinary Remediation to Customers5-37
      • [E] : Providing Substantial Assistance to FINRA Investigations5-37
  • § 5:7 : State Investigations and Internal Investigations5-38
    • § 5:7.1 : The Martin Act5-38
    • § 5:7.2 : Martin Act Investigations5-39
  • § 5:8 : Conclusions—The Role of the Internal Investigation5-39
Chapter 6: Conducting Internal Investigations
  • § 6:1 : Overview6-2
  • § 6:2 : Initiating an Investigation6-3
    • § 6:2.1 : Events Triggering an Investigation6-3
    • § 6:2.2 : Selecting the Oversight Committee6-5
    • § 6:2.3 : Retention of Counsel6-8
    • § 6:2.4 : Scope of Investigation6-9
    • § 6:2.5 : Document Preservation6-11
  • § 6:3 : Gathering Relevant Facts6-12
    • § 6:3.1 : Planning Phase6-12
    • § 6:3.2 : Data Collection6-14
    • § 6:3.3 : Document Review and Organization6-15
    • § 6:3.4 : Witness Interviews6-16
      • [A] : Timing and Order of Interviews6-16
      • [B] : Interview Documents6-17
      • [C] : Interviewing Former Employees6-17
      • [D] : Witness Warnings6-17
        • [D][1] : Upjohn Warning6-17
        • [D][2] : Zar Warning6-19
        • [D][3] : Separate Counsel Warning6-20
      • [E] : Note-Taking and Interview Memoranda6-21
  • § 6:4 : Managing External Constituents6-22
    • § 6:4.1 : Disclosure Requirements6-23
    • § 6:4.2 : Auditors6-24
    • § 6:4.3 : The Government6-26
    • § 6:4.4 : Board Members6-26
    • § 6:4.5 : Insurance Carriers6-27
  • § 6:5 : Presenting the Investigation’s Findings6-29
    • § 6:5.1 : Forms of Reports6-29
    • § 6:5.2 : Contents of a Written Report6-31
Chapter 7: Attorney-Client and Work Product Considerations in Internal Investigations
  • § 7:1 : Overview7-2
  • § 7:2 : The Attorney-Client Privilege7-2
    • § 7:2.1 : Elements Generally7-2
    • § 7:2.2 : Application to Internal Investigations7-6
  • § 7:3 : The Work Product Doctrine7-7
    • § 7:3.1 : Elements Generally7-7
    • § 7:3.2 : Application to Internal Investigations7-9
  • § 7:4 : Self-Evaluative Privilege7-10
  • § 7:5 : Safeguarding the Attorney-Client Privilege and Work Product Protection During Internal Investigations—Specific Applications7-11
    • § 7:5.1 : Investigation by Independent Counsel7-11
    • § 7:5.2 : Employee Interviews7-13
    • § 7:5.3 : Former Employee Interviews7-17
  • § 7:6 : Waiver and Exceptions: General Principles7-17
    • § 7:6.1 : Waiver of Attorney-Client Privilege7-17
    • § 7:6.2 : Waiver of Work Product Material7-19
    • § 7:6.3 : “Crime-Fraud” Exception to Privilege7-19
    • § 7:6.4 : Extent of Waiver7-20
      • [A] : Partial Waiver7-20
      • [B] : Successors in Interest7-21
    • § 7:6.5 : Corporate Clients and Authority to Waive7-21
    • § 7:6.6 : Waiver Issues Concerning Investigative Reports7-23
  • § 7:7 : Intentional Selective Waiver of the Attorney-Client Privilege and Work Product Protection7-25
    • § 7:7.1 : Selective Waiver of Attorney-Client Privilege7-25
    • § 7:7.2 : Selective Waiver of Work Product Protection7-28
  • § 7:8 : Federal Rule of Evidence 5027-29
  • § 7:9 : Cooperation with Government Investigations and Disclosure of Protected Material7-35
    • § 7:9.1 : Background: Government Requests for Privilege Waivers7-35
    • § 7:9.2 : Recommendations7-37
Chapter 8: Defending Federal Grand Jury Investigations
  • § 8:1 : The Role of the Grand Jury8-2
  • § 8:2 : The Role of the Prosecutor8-3
  • § 8:3 : Constitutional and Statutory Authority and Guidelines8-4
  • § 8:4 : Composition of the Grand Jury8-4
    • § 8:4.1 : Generally8-4
    • § 8:4.2 : Qualifications8-5
    • § 8:4.3 : Challenges to the Grand Jury8-5
  • § 8:5 : The Grand Jury’s Term8-6
  • § 8:6 : The Participants8-6
  • § 8:7 : Secrecy Requirement8-7
  • § 8:8 : Powers and Limitations8-9
    • § 8:8.1 : Generally8-9
    • § 8:8.2 : The Grand Jury Subpoena8-9
    • § 8:8.3 : Issuing Subpoenas8-9
    • § 8:8.4 : Service of the Grand Jury Subpoena8-10
    • § 8:8.5 : Limitations on the Use of the Subpoena Power8-11
    • § 8:8.6 : Evidentiary Rules8-12
  • § 8:9 : Returning an Indictment8-13
  • § 8:10 : Handling the Investigation8-13
    • § 8:10.1 : Determining Governmental Interest8-13
    • § 8:10.2 : Invoking the Privilege Against Self-Incrimination8-15
      • [A] : Generally8-15
      • [B] : Incriminating Testimony8-16
      • [C] : Incriminating Documents8-17
      • [D] : Privilege Does Not Apply to Corporations8-18
    • § 8:10.3 : Immunity8-19
      • [A] : Generally8-19
      • [B] : Advantages of Immunity8-19
  • § 8:11 : Responding to a Subpoena for Documents8-20
    • § 8:11.1 : Generally8-20
    • § 8:11.2 : The Document Hold Memo8-20
    • § 8:11.3 : The Scope of the Subpoena8-21
      • [A] : Generally8-21
      • [B] : Negotiating with the Prosecution8-21
      • [C] : Motion to Quash8-22
    • § 8:11.4 : Records Witness8-23
    • § 8:11.5 : Reviewing the Documents8-23
  • § 8:12 : Responding to a Subpoena for Testimony8-23
    • § 8:12.1 : Preparation8-24
    • § 8:12.2 : Advice to the Witness8-24
    • § 8:12.3 : Testifying8-25
      • [A] : Generally8-25
      • [B] : Advice of Rights8-26
    • § 8:12.4 : Debriefing8-26
    • § 8:12.5 : Aftermath8-27
  • § 8:13 : Conclusion8-28
Chapter 9: Defending an SEC Investigation
  • § 9:1 : Overview of an SEC Investigation9-2
  • § 9:2 : Initial Stages of an Investigation9-5
    • § 9:2.1 : Early Contacts with Enforcement Division9-5
      • [A] : Market Intelligence and Whistleblower Program9-5
      • [B] : The Investigation Begins9-8
    • § 9:2.2 : The Decision Whether to Cooperate9-11
    • § 9:2.3 : Public Disclosure and Trading Restrictions9-18
  • § 9:3 : Document Production and Testimony9-19
    • § 9:3.1 : Staff Requests for Documents and Other Records9-19
    • § 9:3.2 : Interaction with Other Counsel9-22
    • § 9:3.3 : Preparation for Investigative Testimony9-23
    • § 9:3.4 : Conduct of Investigative Testimony9-24
    • § 9:3.5 : Subpoena Enforcement9-27
    • § 9:3.6 : Ongoing Attention to the Cooperation and Seaboard Process9-29
    • § 9:3.7 : Foreign Assistance9-30
  • § 9:4 : The Wells Process and Possible Settlement9-30
    • § 9:4.1 : The Staff’s Wells Notice9-30
    • § 9:4.2 : The Wells Submission9-31
    • § 9:4.3 : Settlement Discussions9-33
  • § 9:5 : Transitioning to Litigation9-38
    • § 9:5.1 : Civil Actions in U.S. District Court9-38
    • § 9:5.2 : SEC Administrative Proceedings9-40
  • § 9:6 : Conclusion9-46
Chapter 10: Cooperation in SEC and DOJ Cases
  • § 10:1 : Overview10-2
  • § 10:2 : Cooperating with the SEC: Lessons from the Years Since the Seaboard Report10-5
    • § 10:2.1 : Generally10-5
    • § 10:2.2 : Selected SEC Enforcement Actions After Seaboard10-9
      • [A] : Generally10-9
      • [B] : Xerox10-10
      • [C] : Dynegy10-11
      • [D] : Homestore10-11
      • [E] : Lucent Technologies10-12
      • [F] : Banc of America Securities LLC10-13
      • [G] : Gemstar-TV Guide International, Inc.10-14
      • [H] : Royal Ahold10-15
      • [I] : Putnam Fiduciary Trust Company10-16
      • [J] : American International Group (AIG)10-17
      • [K] : KLA-Tencor Corporation10-17
      • [L] : Aspen Technology, Inc.10-18
      • [M] : General Reinsurance Corporation10-18
      • [N] : State Street Bank and Trust Company10-19
      • [O] : Carter’s10-20
      • [P] : Tenaris10-21
      • [Q] : Fannie Mae and Freddie Mac10-22
      • [R] : Amish Helping Fund10-23
      • [S] : Ralph Lauren Corporation10-24
      • [T] : PBSJ Corporation10-25
      • [U] : Nortek, Inc.10-26
    • § 10:2.3 : Summary of Lessons Learned and Guidance Going Forward10-27
  • § 10:3 : Cooperating with the Department of Justice: Lessons from the Years Since the Thompson Memorandum10-29
    • § 10:3.1 : Generally10-29
    • § 10:3.2 : Selected Enforcement Actions Since the Release of the Thompson, McNulty, Filip, and Yates Memoranda10-33
      • [A] : Generally10-33
      • [B] : Agreements Governed by the Thompson Memorandum10-34
        • [B][1] : Banco Popular de Puerto Rico10-34
        • [B][2] : Bank of New York10-35
        • [B][3] : Symbol Technologies, Inc.10-36
        • [B][4] : Bristol-Myers Squibb10-37
        • [B][5] : Computer Associates10-37
        • [B][6] : Riggs Bank10-38
      • [C] : Agreements Governed by the McNulty Memorandum10-40
        • [C][1] : El Paso Corporation10-40
        • [C][2] : Baker Hughes10-41
      • [D] : Agreements Governed by the Filip Memorandum10-42
        • [D][1] : Fiat S.p.A.10-42
        • [D][2] : UBS AG10-43
        • [D][3] : General Reinsurance Corporation10-44
        • [D][4] : Wachovia Bank, N.A.10-45
        • [D][5] : Tyson Foods, Inc.10-46
        • [D][6] : Biomet10-47
        • [D][7] : Barclays Bank PLC10-48
        • [D][8] : Hewlett-Packard10-49
        • [D][9] : SunTrust Mortgage Inc.10-50
      • [E] : Agreements Governed by the Yates Memorandum10-51
        • [E][1] : Swisher Hygiene, Inc.10-51
        • [E][2] : North American Health Care Inc.10-52
    • § 10:3.3 : Summary of Lessons Learned and Guidance Going Forward10-53
  • § 10:4 : Conclusion10-55
Chapter 11: The SEC’s Office of Compliance Inspections and Examinations
  • § 11:1 : Overview11-2
    • § 11:1.1 : Authority11-3
    • § 11:1.2 : Organization11-4
      • [A] : Investment Adviser/Investment Examination Program11-5
      • [B] : Broker-Dealer and Exchange Examination Program11-5
      • [C] : Clearance and Settlement Examination Program11-6
      • [D] : FINRA and Securities Industry Oversight Examination Program11-6
      • [E] : Technology Controls Program11-6
      • [F] : Office of Risk and Strategy11-6
      • [G] : Office of Chief Counsel11-6
      • [H] : Steering Committees11-6
  • § 11:2 : Overview of Examinations11-7
    • § 11:2.1 : Types of Exams11-8
      • [A] : “Sweep” Exams11-8
      • [B] : For-Cause Exams11-8
      • [C] : Risk-Based Exams11-9
      • [D] : “Presence” Exams11-9
      • [E] : Never-Before Examined Advisers Initiative11-10
      • [F] : Never-Before Examined Investment Companies Initiative11-10
      • [G] : Oversight Exams11-10
    • § 11:2.2 : Process11-11
      • [A] : Before the Visit11-11
      • [B] : On-Site Visit11-12
      • [C] : Exit Interviews/Closure Notification11-13
      • [D] : Post-Examination11-13
  • § 11:3 : Strategies for a Successful Examination11-14
    • § 11:3.1 : Pre-Exam Communications11-14
    • § 11:3.2 : The Examination11-14
    • § 11:3.3 : Document Production and Requests for Extensions11-16
  • § 11:4 : Keeping Abreast of Current Trends11-16
    • § 11:4.1 : Common Deficiencies in Compliance Programs11-17
    • § 11:4.2 : Current OCIE Examination Initiatives11-19
      • [A] : Protecting Retail Investors11-19
      • [B] : Focusing on Senior Investors and Retirement Investments11-20
      • [C] : Market-Wide Risks11-21
      • [D] : Other Initiatives11-22
    • § 11:4.3 : Historical Registrant-Specific Examination Priorities11-22
      • [A] : Broker-Dealers11-22
      • [B] : Investment Advisers/Investment Companies11-23
Chapter 12: FINRA Investigations
  • § 12:1 : Introduction12-2
  • § 12:2 : FINRA Background12-3
  • § 12:3 : Violations of FINRA and NASD Rules12-6
    • § 12:3.1 : Generally12-6
    • § 12:3.2 : Investigation of Violations12-7
      • [A] : Office of Fraud Detection and Market Intelligence12-7
      • [B] : Examinations As Sources of Investigation12-8
        • [B][1] : Generally12-8
        • [B][2] : Routine Examinations12-9
        • [B][3] : For-Cause Examinations12-9
        • [B][4] : Market Regulation Examinations12-10
      • [C] : Sweeps12-10
      • [D] : Referrals As Sources of Investigations12-11
      • [E] : Insider Trading Investigations12-12
      • [F] : Investigative Powers of FINRA12-12
        • [F][1] : Use of FINRA Rule 8210 to Obtain Documents and Testimony12-12
        • [F][2] : “On the Record” Testimony12-13
      • [G] : Wells Submissions12-14
    • § 12:3.3 : Disciplinary Proceedings12-15
      • [A] : Generally12-15
      • [B] : Sanctions and Penalties for Violations12-17
      • [C] : Cooperation12-18
Chapter 13: Cross-Border Regulation of the Financial Markets; and Appendix 13A
  • § 13:1 : Overview13-2
  • § 13:2 : The SEC—U.S. Cross-Border Securities Regulation and Enforcement13-3
    • § 13:2.1 : Generally13-3
    • § 13:2.2 : Cross-Border Cooperation and Domestic Law13-4
    • § 13:2.3 : Formal Mechanisms of Cooperation13-5
      • [A] : Multilateral Organizations13-5
      • [B] : Bilateral Arrangements13-9
        • [B][1] : Memoranda of Understanding13-9
        • [B][2] : Bilateral Dialogues13-12
    • § 13:2.4 : Informal Mechanisms of Cooperation13-13
    • § 13:2.5 : Cross-Border Enforcement Issues13-14
      • [A] : Obtaining Testimony and Evidence13-14
      • [B] : Cross-Border Enforcement Cooperation, by the Numbers13-15
    • § 13:2.6 : Enforcement Issues13-15
      • [A] : Insider Trading13-15
      • [B] : Securities Fraud13-16
      • [C] : Market Manipulation13-17
      • [D] : FCPA13-18
    • § 13:2.7 : Cross-Border Regulatory Cooperation13-19
    • § 13:2.8 : Obstacles to Cross-Border Securities Regulation13-20
  • § 13:3 : U.K. Financial Conduct Authority—An EU Regulator’s Approach to Cross-Border Regulation13-23
    • § 13:3.1 : Background and Approach to Regulation13-23
    • § 13:3.2 : Enforcement Policy, Powers, and Procedures13-25
      • [A] : Authority to Investigate and Prosecute13-25
      • [B] : Investigative and Enforcement Process13-27
    • § 13:3.3 : Cross-Border Cooperation and Collaboration in Investigations and Enforcement13-29
      • [A] : Methods of Cross-Border Cooperation13-29
      • [B] : FSA v. Amro International SA and Creon Management SA13-31
    • § 13:3.4 : Restrictions on Cooperation—Confidentiality of Information Provided to the FCA and Legal Privilege13-34
    • § 13:3.5 : Cross-Border Collaboration13-35
  • § 13:4 : Looking Ahead and Conclusion13-36
  • Appendix 13A : Cooperative Arrangements Between the SEC and Foreign RegulatorsApp. 13A-1
Chapter 14: Enforcement of the Foreign Corrupt Practices Act and Other Anti-Bribery Laws
  • § 14:1 : Overview14-3
  • § 14:2 : Legal Elements14-5
    • § 14:2.1 : Anti-Bribery and Accounting Provisions14-5
      • [A] : Anti-Bribery Provisions14-5
      • [B] : Accounting Provisions14-5
    • § 14:2.2 : Jurisdiction Pursuant to the FCPA14-6
      • [A] : Anti-Bribery14-6
        • [A][1] : Issuers14-6
        • [A][2] : Domestic Concerns14-6
        • [A][3] : Persons Other Than Issuers or Domestic Concerns14-7
      • [B] : Scope of the Term “Foreign Officials”14-8
    • § 14:2.3 : Facilitation Payments14-11
    • § 14:2.4 : Affirmative Defenses14-12
    • § 14:2.5 : Statute of Limitations14-13
    • § 14:2.6 : DOJ Opinion Process14-14
    • § 14:2.7 : Penalties14-15
    • § 14:2.8 : Consultants, Agents, and Other Third-Party Intermediaries: Managing the Risks of Liability for the Conduct of Others Under a Willful Blindness Theory14-17
  • § 14:3 : Mergers & Acquisitions14-20
  • § 14:4 : FCPA Enforcement Activity and Developments14-21
    • § 14:4.1 : Whistleblower Rules Under the Dodd-Frank Act14-21
    • § 14:4.2 : Review of Enforcement Actions14-22
      • [A] : Generally14-22
      • [B] : Some Significant Cases Brought by the DOJ and the SEC14-23
        • [B][1] : Braskem, S.A.14-23
        • [B][2] : JPMorgan14-24
        • [B][3] : VimpelCom14-25
        • [B][4] : Alstom SA14-26
        • [B][5] : Avon Products Inc.14-27
        • [B][6] : Archer Daniels Midland14-28
        • [B][7] : Weatherford International14-29
        • [B][8] : Siemens AG14-29
        • [B][9] : BAE Systems PLC14-30
        • [B][10] : Diebold Inc.14-31
        • [B][11] : Marubeni Corporation14-32
        • [B][12] : Johnson & Johnson14-33
        • [B][13] : BizJet International Sales and Support Inc.14-34
        • [B][14] : The Gabon “Sting” Prosecutions14-35
      • [C] : SEC Enforcement Actions Taken Without the DOJ14-36
        • [C][1] : Eastern Europe14-36
        • [C][2] : Asia/South Asia14-37
        • [C][3] : South America14-39
        • [C][4] : Africa/Middle East14-40
    • § 14:4.3 : Trends14-41
      • [A] : Individual Enforcement and the Yates Memo14-41
      • [B] : A Voluntary Disclosure Renaissance? DOJ’s Enforcement Plan and Pilot Program14-43
      • [C] : Global Enforcement and Cooperation Remain on the Rise as the UK Bribery Act Heats Up14-45
      • [D] : Unexpected Enforcers: Brazil and Operation Lava Jato14-48
      • [E] : The World Bank As an Anticorruption Agent14-49
      • [F] : Judicial Scrutiny of Deferred Prosecution Agreements14-49
      • [G] : Jurisdiction Over Foreign Nationals14-50
      • [H] : Control Person Liability14-52
      • [I] : Sovereign Wealth Funds and the Financial Services Industry14-53
  • § 14:5 : Overview of FCPA Compliance Practice14-54
    • § 14:5.1 : Generally14-54
    • § 14:5.2 : Sources of Guidance14-55
  • § 14:6 : Conclusion14-61
Chapter 15: Dealing with Parallel Actions
  • § 15:1 : Introduction: Types of Parallel Actions15-2
  • § 15:2 : Statutes of Limitations15-6
  • § 15:3 : Use of Information Across Proceedings15-8
    • § 15:3.1 : Disclosure of DOJ Involvement15-8
    • § 15:3.2 : Discovery15-8
    • § 15:3.3 : Sharing of SEC Investigative Material15-10
    • § 15:3.4 : Access to SEC Files and FOIA Requests15-11
    • § 15:3.5 : Requesting Information from Government Investigations15-12
    • § 15:3.6 : Grand Jury Secrecy and Criminal Procedure Rule 6(e)(3)15-13
    • § 15:3.7 : Remedies for Government Misconduct15-14
  • § 15:4 : Waiver of Privilege15-16
    • § 15:4.1 : Generally15-16
    • § 15:4.2 : Waiver Demands by the SEC and DOJ15-16
      • [A] : The Legislative Response—The Financial Services Regulatory Relief Act and the Proposed Attorney-Client Privilege Protection Act15-17
      • [B] : The DOJ’s Revised Approach—The Filip Memo15-18
      • [C] : The SEC15-20
    • § 15:4.3 : Scope of the Waiver15-21
    • § 15:4.4 : Potential Waiver Assertions by Defendants—SEC v. Gupta15-23
  • § 15:5 : Fifth Amendment Considerations15-24
  • § 15:6 : Stays of Parallel Proceedings15-25
  • § 15:7 : Proceedings to Block Agency Actions—Gupta v. SEC15-28
    • § 15:7.1 : Subject Matter Jurisdiction and Administrative Adjudication15-30
  • § 15:8 : Effects on Later Proceedings15-33
    • § 15:8.1 : Disclosure of Evidence at Trial15-33
    • § 15:8.2 : Settlement Agreements15-33
    • § 15:8.3 : Disclosure of Facts Underlying SEC Settlements15-35
    • § 15:8.4 : Collateral Estoppel15-37
Chapter 16: Representing Individuals in Securities Investigations
  • § 16:1 : Overview16-3
  • § 16:2 : Types of Investigations16-4
    • § 16:2.1 : Generally16-4
    • § 16:2.2 : SEC Investigations16-4
      • [A] : Generally16-4
      • [B] : Matters Under Inquiry16-4
      • [C] : Informal Investigations16-5
      • [D] : Formal Investigations16-6
    • § 16:2.3 : Criminal Investigations16-7
    • § 16:2.4 : Corporate Internal Investigations16-8
  • § 16:3 : Status of the Individual16-9
    • § 16:3.1 : Generally16-9
  • Figure 16-1 : The Spectrum of Culpability16-10
    • § § 16:3.2 : Determining the SEC’s Perspective16-10
    • § § 16:3.3 : Is There a Parallel Criminal Investigation?16-12
      • § [A] : Generally16-12
      • § [B] : “Subjects” and “Targets”16-13
      • § [C] : “Non-Subject” Letters16-13
    • § § 16:3.4 : Interacting with Other Private Counsel16-14
      • § [A] : Generally16-14
      • § [B] : Counsel for the Corporation16-14
      • § [C] : Counsel for Other Individuals16-18
      • § [D] : Joint Defense Agreements16-18
  • § § 16:4 : Investigation16-20
    • § § 16:4.1 : Generally16-20
    • § § 16:4.2 : Client Interviews16-20
    • § § 16:4.3 : Witness Interviews16-22
    • § § 16:4.4 : Document Review16-23
    • § § 16:4.5 : Precedent Sources16-23
  • § § 16:5 : Process Violations16-23
    • § § 16:5.1 : Generally16-23
    • § § 16:5.2 : False Statements and Perjury16-24
    • § § 16:5.3 : Obstruction of Justice16-25
    • § § 16:5.4 : Zar Warnings16-26
    • § § 16:5.5 : Reporting Obligations Under SEC Professional Conduct Rules16-27
  • § § 16:6 : Production of Documents16-28
    • § § 16:6.1 : Document Preservation16-28
      • § [A] : Maintain Record of Legal Advice16-28
      • § [B] : Maintain Record of All Steps Taken16-28
      • § [C] : Third Parties16-29
    • § § 16:6.2 : Personal Versus Corporate Records16-29
    • § § 16:6.3 : Objections to Subpoenas16-30
    • § § 16:6.4 : Doe Immunity16-32
    • § § 16:6.5 : Preserving the Confidentiality of Documents Produced to the Government16-33
      • § [A] : Generally16-33
      • § [B] : Grand Jury Proceedings16-34
      • § [C] : SEC Enforcement Investigations16-35
  • § § 16:7 : Testimony16-36
    • § § 16:7.1 : Generally16-36
    • § § 16:7.2 : Right to Representation16-36
    • § § 16:7.3 : Privileges16-38
      • § [A] : Generally16-38
      • § [B] : Fifth Amendment16-39
      • § [C] : Attorney-Client16-42
    • § § 16:7.4 : Immunity16-42
    • § § 16:7.5 : Use Immunity: “Queen for a Day”16-44
    • § § 16:7.6 : Obtaining the Transcript16-44
  • § § 16:8 : Cooperation16-45
    • § § 16:8.1 : Generally16-45
    • § § 16:8.2 : Corporate-Government Cooperation: Employee Beware16-46
    • §  § 16:8.3 : Types of Cooperation16-49
    • § § 16:8.4 : Securing Cooperation Benefits16-50
  • § § 16:9 : Legal Fees16-52
    • § § 16:9.1 : Indemnification and Advancement of Fees16-52
    • § § 16:9.2 : Insurance Coverage16-53
  • § § 16:10 : Charging Your Client16-54
    • § § 16:10.1 : Indictment16-55
    • § § 16:10.2 : The Wells Process16-56
    • § § 16:10.3 : Settling with the SEC16-59
  • § § 16:11 : Available Sanctions Against Individuals16-61
    • § § 16:11.1 : Cease-and-Desist Orders16-61
    • § § 16:11.2 : Financial Remedies: Disgorgement and Fines16-61
      • § [A] : Disgorgement16-61
      • § [B] : Fines16-62
    • § § 16:11.3 : Director and Officer Bars16-64
    • § § 16:11.4 : Criminal Penalties16-64
      • § [A] : Imprisonment16-64
      • § [B] : Financial Sanctions16-65
Chapter 17: Communicating with the Company’s Auditor in a Securities Investigation
  • § 17:1 : Introduction17-1
  • § 17:2 : Reasons for Disclosures to the Company’s Auditor17-2
    • § 17:2.1 : Management Representations in the Audit Process17-3
    • § 17:2.2 : Investigations Initiated by the Company’s Auditor17-5
    • § 17:2.3 : Obtaining Information and Assistance from the Auditor17-7
  • § 17:3 : Work Product Protection and Waiver17-7
    • § 17:3.1 : Generally17-7
    • § 17:3.2 : Disclosure to the Company’s Auditor Does Not Typically Constitute Waiver17-8
      • [A] : Cases Following Merrill Lynch17-10
        • [A] : The Deloitte Case Finds No Waiver17-11
  • § 17:4 : Waiver of Attorney-Client Privilege17-15
  • § 17:5 : Practical Precautions to Protect Against Waiver17-16
Chapter 18: Employment Issues in Securities Investigations
  • § 18:1 : Overview18-3
  • § 18:2 : Investigative Techniques in the Workplace18-3
    • § 18:2.1 : Generally18-3
    • § 18:2.2 : Monitoring Employee Computer, Phone, Email, and Social Media Usage18-3
      • [A] : Generally18-3
      • [B] : Electronic Communications Privacy Act18-5
        • [B][1] : Generally18-5
        • [B][2] : The Consent Exception18-8
        • [B][3] : Business Extension Exception18-9
        • [B][4] : The Service Provider Exception18-11
      • [C] : State Statutory Considerations18-12
      • [D] : State Common Law Invasion of Privacy Claims18-13
      • [E] : Social Media Monitoring18-16
      • [F] : Practical Tips for Electronic Monitoring18-21
    • § 18:2.3 : Video Surveillance18-21
    • § 18:2.4 : Polygraph Tests18-26
    • § 18:2.5 : The Use of Pretext18-27
  • § 18:3 : The Effect of the Fair Credit Reporting Act Upon Workplace Investigations18-28
    • § 18:3.1 : Generally18-28
    • § 18:3.2 : Consumer Report Versus Investigative Consumer Report18-29
    • § 18:3.3 : FACTA Investigations into Employee Misconduct18-30
    • § 18:3.4 : Non-FACTA Investigations18-30
    • § 18:3.5 : Adverse Action Procedures18-32
    • § 18:3.6 : Employers’ Certifications to Consumer Reporting Agencies18-33
    • § 18:3.7 : Risks of Noncompliance18-33
    • § 18:3.8 : State and Local Laws18-34
  • § 18:4 : The Employee’s Duty to Cooperate18-35
    • § 18:4.1 : Generally18-35
    • § 18:4.2 : The Government’s Perspective on Cooperation18-35
    • § 18:4.3 : Representation of the Employee18-36
    • § 18:4.4 : Employee Representation Rights18-38
      • [A] : Weingarten Rights18-38
      • [B] : Investigative Interviews in the Non-Union Workplace18-39
  • § 18:5 : Indemnification and Advancement of Attorneys’ Fees During an Investigation18-41
    • § 18:5.1 : Generally18-41
    • § 18:5.2 : As Set Forth by the Documents Concerning Corporate Governance18-41
    • § 18:5.3 : As Set Forth by State Statutes18-42
    • § 18:5.4 : As Potentially Limited by Sarbanes-Oxley18-44
    • § 18:5.5 : Prosecutorial Considerations18-46
  • § 18:6 : Termination or Suspension of Employees for Wrongdoing18-49
  • § 18:7 : Protection of Whistleblowers from Retaliation18-51
    • § 18:7.1 : Whistleblower Protection Under the Sarbanes-Oxley Act18-51
    • § 18:7.2 : Covered Employers18-52
    • § 18:7.3 : Covered Employees18-54
      • [A] : Employees Based Outside of the United States18-56
      • [B] : Employers Based Outside of the United States18-57
      • [C] : Independent Contractors18-58
      • [D] : Security Analysts18-58
    • § 18:7.4 : Protected Activity18-59
    • § 18:7.5 : Remedies18-63
    • § 18:7.6 : Individual Liability18-65
    • § 18:7.7 : Whistleblower Protection Under the Dodd-Frank Act18-66
    • § 18:7.8 : Compliance Programs18-71
  Appendices
Appendix A: The Thompson Memorandum
Appendix B: The McNulty Memorandum
Appendix C1: Remarks by Deputy Attorney General—Revisions to Corporate Charging Guidelines
Appendix C2: Press Release—Revisions to Corporate Charging Guidelines
Appendix C3: Department of Justice Corporate Charging Guidelines
Appendix D: The Seaboard Report
Appendix E: Recommended Practices
  Table of Authorities
  Index

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“[Securities Investigations] collects the experience of many of the most experienced lawyers in securities law enforcement. This book belongs on the desk of every practitioner whose clients have a stake in securities investigations, whether civil or criminal.”
Peter J. Romatowski, Partner, Jones Day; former Chief of Securities and Commodity Frauds Unit, U.S. Attorneys’ Office, Southern District of New York


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