Tag: investigation

SEC Awards Whistleblower Whose Tip Led to Opening of Investigation

On May 19, the U.S. Securities and Exchange Commission (SEC) issued a whistleblower award to an individual who voluntarily provided the agency with original information that led to a successful enforcement action.

Through the SEC Whistleblower Program, qualified whistleblowers are entitled to an award of 10-30% of the sanctions collected by the government in the enforcement action connected to their disclosure.

The SEC awarded the whistleblower approximately $16,000.

According to the award order, the whistleblower “helped alert Commission staff to the ongoing fraud and his/her tip was a principal motivating factor in the decision to open the investigation.”

In determining the exact percentage of an award, the SEC weighs a number of factors including the significance of the whistleblower’s information, the law enforcement interest in the case, the degree of further assistance provided by the whistleblower, the whistleblower’s culpability in the underlying violation, and the timelines of the disclosure.

According to the award order, the SEC considered that the awarded whistleblower “provided continuing assistance by supplying critical documents and participating in at least one subsequent communication with Commission staff that advanced the investigation.”

The SEC notes that the whistleblower did not initially make their disclosure via a Form TCR. However, the whistleblower qualified for an award because they filed a Form TCR within 30 days of learning of the filing requirement.

Since issuing its first award in 2012, the SEC has awarded approximately $1.3 billion to over 270 individuals. In the 2021 fiscal year, the program set a number of records. The SEC issued a record $564 million in whistleblower awards to a record 108 individuals.

In addition to monetary awards, the SEC Whistleblower Program offers confidentiality protections to whistleblowers. Thus, the SEC does not disclose any identifying information about award recipients.

Individuals considering blowing the whistle to the SEC should first consult an experienced SEC whistleblower attorney to ensure they are fully protected and qualify for the largest possible award.

Article By Mary Jane Wilmoth of Kohn, Kohn & Colapinto. Geoff Schweller also contributed to this article.

For more white collar business crime legal news, click here to visit the National Law Review.

Copyright Kohn, Kohn & Colapinto, LLP 2022. All Rights Reserved.

Clinton’s Impeachment Compared to the Trump Proceedings: Conversation with Sol Wisenberg, former Deputy Independent Counsel during the Starr Investigation

With the Trump impeachment proceedings getting ready to start this week in the House of Representatives, we thought it would be interesting to take a look back at the Clinton Impeachment.  The catalyst for President Clinton’s impeachment was the Starr Report.  Independent Counsel Ken Starr presented to the House of Representatives a case for impeaching President Bill Clinton on 11 grounds, including perjury, obstruction of justice, witness-tampering and abuse of power.  The sexual relationship between the president and former White House intern Monica Lewinsky formed the basis of the lying under oath and obstruction of justice charges.  The lying under oath charge stemmed from the Clinton v. Jones civil lawsuit, which included President Clinton’s inaccurate grand jury testimony about a sexual relationship with Monica Lewinsky.

Solomon L. Wisenberg played a pivotal role in the Clinton Impeachment as a Deputy Independent Counsel during the Starr investigation. Mr. Wisenberg’s grand jury questioning of President Bill Clinton was submitted by independent counsel Kenneth Starr with his report to the House of Representatives as part of the Clinton impeachment proceedings.

Mr. Wisenberg has more than two decades of experience with complex federal white-collar crime investigations and jury trials and is currently the co-chair of Nelson Mullins White Collar Defense and Government Investigations practice.  He is a sought after analyst and routinely appears in a variety of media providing commentary and answering questions on federal white-collar investigations, impeachment, public corruption under the Hobbs Act, bribery and fraud, Foreign Corrupt Practice Act violations and other intricate legal issues.

Mr. Wisenberg was kind enough to take time out of his schedule to talk with the National Law Review on the upcoming Trump impeachment proceedings and how they are similar and different from the Clinton impeachment.

The Starr Report played a central role in the Clinton impeachment proceedings; producing the perjury and obstruction of justice charges stemming from the Clinton v. Jones civil action.

In the Clinton v. Jones sexual harassment lawsuit, Ms. Jones’ attorneys included questions about Monica Lewinsky and President Clinton’s behavior with other women to show a pattern of improper behavior with women by Clinton to bolster Ms. Jones’ sexual harassment claims.

Additionally, Ms. Jones’ attorneys sought to show a pattern concerning President Clinton’s actions in covering up various inappropriate interactions with women.

Do you think the impeachment prosecutors for President Trump will introduce elements from the Mueller report to show a pattern of behavior to bolster any criminal acts and any obstruction of justice case related to the withholding of aid to Ukraine?

Mr. Wisenberg: I think there’s no doubt that they will. I’ve heard some Democratic Congressmen talking about it and it’s very clear that they feel the obstruction portion of the Mueller report has not been given sufficient attention. So I’d be shocked if it does not constitute one of the articles of impeachment.

The Supreme Court in Clinton v. Jones held that a sitting president is subject to civil suits in federal court, this lead to President Clinton being deposed and perjuring himself and being impeached by the House of Representatives, on grounds of perjury to a grand jury and for obstruction of justice.

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If President Clinton was able to be deposed while in office, why are President Trump and other members of his administration, such as Mick Mulvaney, claiming immunity?

Mr. Wisenberg: Trump didn’t ever formally claim immunity, because Mueller never pressed the point. Keep in mind, Clinton vs Jones just said the president is not immune from suits while he is in office. Even President Clinton didn’t take the position that he could never be sued. President Clinton’s position was just that he didn’t have to answer lawsuits brought while he was the president, and the Supreme Court ended up saying yes you do, you don’t have that absolute immunity. But the Court also said that there needs to be respect and accommodations for the responsibilities of the office, for the president’s schedule, time, privacy, all of that kind of stuff.

However, in the Lewinsky criminal investigation where we sent President Clinton a grand jury subpoena after he ignored six of our requests to appear, we ended up withdrawing the subpoena. We did this because President Clinton’s attorney said if you withdraw the subpoena, he’ll sit for grand jury testimony. Clinton’s inquiry involved grand jury testimony, not just a deposition.  So the constitutional issue involving the President’s right to defy a grand jury subpoena for testimony alone was never tested there. I think it would’ve been an interesting issue, because Clinton did not want to be in a position where the president is being subpoenaed or responding to a subpoena, and he certainly didn’t want to be in a position of going to federal court to block the Lewinsky Grand Jury’s subpoena.

So that’s how it was worked out, and we don’t know what would have happened if he would have challenged our subpoena in court. There’s actually a case that came out in 1997. It’s the controlling law in the DC Circuit.  The Office of Independent Counsel that was investigating Agriculture Secretary Mike Espy wasn’t asking for testimony in that case. In the In Re Sealed Case, 121 F 3d 729 (1997). the issue was asking for documents and it’s actually a fairly high standard to be able to force the president to respond to a grand jury subpoena. I believe it’s quite possible that Mueller didn’t press the point because he might not have won under the test laid out for Mike Espy, even if he was just seeking testimony. Every case is dependent upon the particular facts.  And because Mueller already had been given a tremendous amount of relevant information, he may have not wanted to push it, as it’s not at all certain that he would’ve won. So not only would it have been a lengthy process that would have delayed the Mueller investigation, but Mueller may not have won on the issue. It’s not that President Trump was behaving inconsistently with the ruling in Clinton vs Jones. It’s that Mueller never forced Trump to make a choice.

Special Counsel Mueller declined to subpoena President Trump, as Mueller told the House Intelligence Committee that it looked highly unlikely that they would obtain an in-person interview with Trump and because of the perceived need to wrap up the investigation into Russian interference in the 2016 United States elections.

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Do you think Mr. Mueller’s strategy of not forcing President Trump to either testify, fight the subpoena in the courts or defy the subpoena will weaken the prosecutor’s ability to use the Mueller report in the impeachment process?

Mr. Wisenberg: Oh God, no. I mean, not at all. The report is what it is. The obstruction portion of the report (I should say alleged obstruction, because even Mueller doesn’t say that Trump criminally obstructed justice) is what it is. The obstruction portion of the Mueller report is based on witness testimony.  I don’t think there’s going to be much dispute about what happened. And apparently now the House of Representatives has the grand jury backup for the Mueller report’s witness testimony. President Trump has questioned some of Don McGahn’s factual statements, but McGahn was hardly alone in detailing the President’s efforts to stymie Mueller.

The dispute would be on the suggestion that the President criminally obstructed justice. I don’t think he did on the known facts, and the only episode that is even a close call on this was when President Trump allegedly asked Don McGahn to sign a document for the White House’s records denying he’d been told to fire Mueller. I think from the Democrats’ perspective they were waiting and waiting and waiting for the Mueller report and it was a dud. The Democrats blamed Bill Barr, I think, unfairly. The Democrats tried to hold testimony on the Mueller report and, it didn’t get anywhere, again, because of all of the claims of executive privilege and related doctrines. Now that they’ve got impeachment authority in Congress the Democrats are in a much stronger position.  They can say now, any area of inquiry is allowed under our Constitutional power to conduct an impeachment inquiry.

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Based on President Clinton’s conflicting testimony, Mr. Starr presented a case that President Clinton had committed perjury. Do you think President Trump’s frequent public statements, though not under oath about the Russian interference in the 2016 election and the alleged quid pro quo in the withholding of aid to Ukraine will be used in the impeachment proceedings?

Mr. Wisenberg:  The Democrats can use anything they want if they think it is valuable to them. The Democrats might say President Trump’s frequent commentaries can be construed as non-hearsay party admissions under the Federal Rules of Evidence in any proceeding brought against President Trump. Also, where somebody is accused of criminal wrongdoing and says something about the specific accusation that turns out to be false, this can be used against him as a false exculpatory statement.   So, I see no reason why they can’t consider anything they want to consider.

To answer your specific questions about President Clinton, President Clinton lied under oath in the Paula Jones civil rights lawsuit deposition thereby obstructing justice.  The federal district judge presiding held President Clinton in contempt of court. President Clinton is the only U.S president ever held in contempt by a federal judge. Additionally, President Clinton had his secretary retrieve and remove gifts Monika Lewinsky had in her possession, when the gifts were subpoenaed in the Jones civil suit. President Clinton used a White House employee, his secretary Betty Currie to obstruct justice in a civil rights lawsuit.

There are some people who say private conduct,  even if it’s criminal, should never be impeachable and that we should not be concerned with private conduct. And there is some historical support for this position in writings by the framers and stuff like that. But President Clinton did more than that. He used a White House employee in order to hide items under subpoena. That’s textbook obstruction.

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If President Trump’s impeachment prosecutors are able to demonstrate that alleged withholding of aid to Ukraine is a criminal act, do you think it will be easier to prove intent in an obstruction of justice case?

Mr. Wisenberg:  No, I don’t think so. I don’t think that helps them on obstruction of justice unless something new related to the Ukraine business comes out, but all he did was to say it’s a perfect call. Right? I think that if you were to somehow prove that this was a campaign finance violation or, or some kind of a crime, it might be a little bit easier to get a few more votes, but I don’t see anything yet that gets them the votes they need to convict President Trump in the Senate.  I understand some people believe that putting the phone call transcript on a separate server was obstruction, but that sounds weak to me.

GOP Senators will point out that President Trump was elected, and we’re a representative democracy. We’re going to hold an election in one year. They will say it’s not right to remove him because of Ukraine. Even if they think, as Senators, that it was a mistake.

I think it is going to take something really dramatic for there to be a shift. Either a dramatic shift in public opinion based on the live testimony or just something new coming out, some new scandal to move the needle on that.

To answer your question, if somebody were to somehow to prove without question that President Trump knew he was violating the law when he made the call, that may be meaningful. And that revelation again moves the needle maybe, but you can’t ignore the politics.

Take a look at the situation with President Clinton. There was no real question in anybody’s mind that he perjured himself and that he obstructed justice, but that didn’t all of a sudden make the Democrats in the Senate vote for removal. I don’t think any of them did. The Democrats during the Clinton impeachment and removal proceedings acted very similarly to how the Republicans are acting now.  You can’t ignore the politics.

Many thanks to Mr. Wisenberg for his time and answers to our questions.

Copyright ©2019 National Law Forum, LLC

Dutch Supervisory Authority Announces GDPR Investigation

On July 17, 2018, the Dutch Supervisory Authority announced that it will start a preliminary investigation to assess whether certain large corporations comply with the EU’s General Data Protection Regulation (“GDPR”) – see the official press release here (in Dutch).  To that end, the authority will review the “records of processing activities” from thirty randomly selected corporations which are located in the Netherlands.

Article 30 of the GDPR requires data controllers and processors to maintain a record of their processing activities.  These records must, among other things, include a description of the categories of data subjects and types of personal data processed, as well as the recipients of the data and the transfer mechanisms used.  While small organizations with less than 250 employees are generally exempted, but there are several exceptions to the exemption which may still cause this obligation to apply to them as well.

The thirty corporations will be selected from ten different economic sectors across the Netherlands, namely: metal industry, water supply, construction, trade, catering, travel, communications, financial services, business services and healthcare.

According to the authority, the correct maintenance of records of processing activities is an important first indication of an organization’s compliance with the new EU data protection rules.

 

© 2018 Covington & Burling LLP
This post was written by Kristof Van Quathem of Covington & Burling LLP.

Mueller Indictment: Russians Manipulated Social Media, Advertising and Political Rallies to Impact 2016 Election

Robert Mueller’s office released 37 page  indictment of 13 Russian individuals and three Russian organizations for interference in the 2016 Presidential election.  According to Mueller’s office, a Russian organization based in St. Petersburg known as the Internet Research Agency used fake American social media profiles sometimes posing as political activists to wage “information warfare,” interfering with and manipulating the US election process.

According to today’s indictment, these activities began as early as 2014, with certain defendants traveling to the United States and obtaining VPN infrastructure, to obscure the origins of their activities so various accounts would appear to be based within the United States.  Alleged activities included purchasing online advertisements–and stealing identities to do so.  Moving offline the defendants and their co-conspirators solicited individuals to disparage or promote candidates, including hiring a woman to wear a costume portraying Hillary Clinton in a prison uniform at various political events, all while hiding their Russian identities.

These activities were done without proper regulatory disclosure and without registering as foreign entities.  Deputy Attorney General, Rod Rosenstein, who announced the indictment stated: “The defendants allegedly conducted what they called information warfare against the United States with the stated goal of spreading distrust towards the candidates and the political system in general.”

DNC Chair Tom Perez released a statement, saying, “This indictment gives us a chilling look at just how sophisticated, well-funded and wide-ranging this attack on our democracy really was. It should send chills up the spine of every American.”   Perez points to the indictment as proof that the 2016 election was marred by Russian interference; including hacking into the DNC by Russian operatives as well as hacking into voter registration systems across the country, along with the now ubiquitous understanding of the Russian presence on social media and their attempts to foster disagreement and manufacture intense contention among already disagreeing Americans online.

Additionally, Perez points to Trump’s failure to act on the information presented by Mueller, referencing Trump’s attempts to diminish and discredit the Mueller investigation and his failure to direct intelligence officials to take action to prevent future attacks.   Perez:

“President Trump continues to deny these facts.  And Republican in Congress continues to spread falsehoods to tarnish the very investigation that is beginning to hold Russia accountable for its actions in 2016. If the president won’t uphold the oath he took to protect our nation’s security, he has no place in the Oval Office. And if Republican leaders in Congress can’t put the interests of our democracy before politics, they have no place in Congress.”

On the other side of the aisle, Kayleigh McEnany, an RNC spokesperson read the indictment to indicate that Russian interference was two-sided, with President-elect Trump also in the Russian cross-hairs.  She points specifically to rallies funded by Russian Roubles on November 12th and 19th of 2016, in the days following the election.   In an appearance on Fox News, she indicated that it was the Democrats who had deceived the country by emphasizing the Russian election interference.  She said, “Democrats deceived this country…and they were caught today.”

In a tweet today, president Trump stated that there was a lack of allegations in today’s indictment of any impact on the 2016 presidential election and highlighted his campaign’s lack of involvement.

Trump Tweet Russian Election Indictment

However, a holistic reading of the indictment supports claims that Russian interference did appear to impact the 2016 election. The indictment offers a timeline of the defendant’s conspiracy that had a clear purpose: “impairing, obstructing and defeating the lawful governmental functions of the United States by dishonest means in order to enable the Defendants to interfere with U.S. political and electoral processes, including the 2016 U.S. Presidential election.”

You can read the indictment here.

For more on Election Legal issues, check out our Legislative, Election, Lobbying, Campaign Finance and Voting Law News.

This post was written by Eilene Spear of The National Law Review/The National Law Forum LLC.

SEC Settles Civil Foreign Corrupt Practices Act (FCPA) Action Against Two Former Oil Services Executives

Katten Muchin

On the eve of a trial which was scheduled to begin this week, the Securities and Exchange Commission settled a civil Foreign Corrupt Practices Act (FCPA) case it brought against two former oil services executives. The case was an outgrowth of anindustry-wide investigation the SEC had initially commenced beginning in 2010.

In February 2012, the SEC filed a complaint against Mark A. Jackson, who was the former CEO and CFO of Noble Corporation, and James J. Ruehlen, former Director and Division Manager of Noble’s Nigerian subsidiary, alleging that they authorized the payment of bribes to customs officials to process false paperwork that purported to show the export and re-import of oil rigs, which was necessary under the requirements of Nigerian law. In fact, the rigs had never been moved. The SEC alleged that the scheme was part of a design to save Noble from losing business and incurring costs associated with exporting rigs from Nigeria and re-importing them under new permits. The complaint asserted violations of the anti-bribery and books and records provisions of the FCPA. The complaint also detailed the fact that Jackson had refused to cooperate during Noble’s internal investigation of the matter and had asserted his Fifth Amendment rights and refused to testify during the SEC investigation.

The settlement with Jackson and Ruehlen was the last in a lengthy saga of FCPA actions against Noble and its former employees. Noble was initially charged with FCPA violations in a civil action in 2010. The company settled, agreeing to pay more than $8 million in fees. The SEC filed charges against Jackson and Ruehlen in 2012 following the corporate settlement and also filed charges against Thomas F. O’Rourke, the former controller and head of internal audit at Noble. O’Rourke quickly settled and agreed to pay a penalty.

Despite pursuing the action for more than two years and alleging serious wrongdoing by the defendants, including responsibility for an extensive bribery scheme, the SEC agreed to settle with Jackson and Ruehlen just two days before their trial was to commence with an injunction against violating the books and records provision of the FCPA. Although Noble had settled its own case for a hefty penalty, neither Jackson nor Ruehlen were required to pay a fine, concede a violation of the bribery provisions of the FCPA nor agree to restrictions on employment.

SEC v. Jackson et al., No. 4:12-c-00563 (S.D. Tex. Jul. 7, 2014).  

Article By:

Emily Stern
Ashley H. Jones
Of:
Katten Muchin Rosenman LLP

Detecting FMLA (Family and Medical Leave Act) Abuse

McBrayer NEW logo 1-10-13

Dealing with employees who abuse FMLA can be difficult. Letting abuse run rampant, however, can impact business productivity and put a damper on company morale (as present employees often have to pick up the slack of someone on leave). Employers who detect abuse must proceed with caution because it is very easy to run afoul of regulations.

Under the FMLA, it is unlawful for any employer to interfere with, restrain, or deny the exercise of any right provided by the Act. Further, employers cannot use the taking of FMLA leave as a negative factor in employment actions, such as hiring, promotions, or disciplinary actions. Violating these provisions can lead to employee lawsuits for interference or retaliation. Having said that, an employer is not helpless in thwarting employees’ ill-intentioned leaves.

If there is suspected abuse, it should be documented in detail. Who reported it? Is the source credible? Is there evidence (i.e., photographs)? Employers should refrain from overzealously playing detective or prompting other employees to snoop on a coworker – doing so may violate privacy laws. However, if there is a reasonable belief or honest suspicion that abuse is occurring, an employer may begin a confidential investigation, perhaps with the aid of private investigator. Surveillance of an employee should only be used in the most egregious situations and should always be conducted by a professional. Be sure to allow the employee the chance to refute the allegation and present his or her side of the story before taking any adverse action against him or her.

FMLA leave is a right for covered employees, but it does not act as a shield for misconduct nor does it prohibit termination of an employee who abuses the terms of an FMLA leave. You can terminate an employee on FMLA leave, but caution must be used. If you are an employer and detect abuse, it is highly recommended you contact an employment attorney about how to proceed so as to avoid costly lawsuits alleging interference or retaliation.

Article By:

Benjamin L. Riddle
Of: 
McBrayer, McGinnis, Leslie and Kirkland, PLLC