Alerts

BakerHostetler Cross-Border Government Investigations and Regulatory Enforcement Review Highlights Extensive Reach of Authorities Across Multiple Jurisdictions

Alerts / March 10, 2016

Report examines developments and trends in cross-border legislation, regulation, and enforcement in securities fraud, accounting fraud, anti-money laundering, racketeering, and trade sanctions

The age of globalization has caused financial markets to become increasingly intertwined, resulting in a corresponding rise in cross-border regulations and enforcement against all sorts of alleged misconduct – from spoofing, insider trading, money laundering, bribery, racketeering, accounting fraud and other misdeeds. BakerHostetler has put together an exhaustive look at enforcement actions by the major regulatory regimes over the past year, and examines the largest cross-border investigations and government enforcement actions worldwide.

This 2015 Year-End Cross-Border Government Investigations and Regulatory Enforcement Review, which mainly looks at U.S. agency enforcement actions but also covers foreign agency work as it related to cross-border cases, is broken down into six sections: Securities Fraud; Cross-border Cooperation in Enforcement of Anti-money Laundering, Racketeering and Trade Sanction Laws; Accounting Fraud; Whistleblower Programs; Criminal/Civil Procedure; and U.S. Government’s Authority to Seize Data Stored Overseas. Each section delves deep into its topic with current matters discussed, such as proposed FINRA rules regarding trading algorithms, the first-ever criminal conviction in the U.S. for spoofing, an update on actions by Department of Justice and UK’s Financial Conduct Authority against J.P. MorganChase concerning credit derivatives losses, the LIBOR manipulation allegations and convictions, the global investigation into money laundering by Liberty Reserve, the FIFA racketeering case, and the Olympus accounting scandal, among a host of others.

A section on the U.S. government’s authority to seize data stored overseas provides an overview of several important cases and proposed laws that could impact the ability of U.S. authorities to seize data that is located in foreign countries and stored digitally. The report breaks down the government’s proposed amendments to Rule 41 of the Federal Rules of Criminal Procedure, and to the Electronic Communications Privacy Act (ECPA). One such proposal, the Law Enforcement Access to Data Stored Abroad (LEADS) Act, is designed to clarify the scope of the U.S. government’s authority to search and seize electronically stored information outside the United States and to strengthen and enhance the current process used to seize data evidence located overseas.

A section on corporate liability, describes actions by the U.S. and the UK in prosecuting corporate executives in addition to their companies. It includes a breakdown of the six directives that comprise the Yates Memo – the memorandum issued in September 2015 by the U.S. deputy attorney general Sally Quillian Yates announcing the Department of Justice’s new guidelines regarding its intensifying focus on individual wrongdoers in the context of corporate misconduct.

The report also covers the foreign expansion of U.S. whistleblower programs in 2015, as well as areas of common focus by regulators in different jurisdictions and the parallel development of tools used to combat alleged violations.

The 2015 Year-End Cross-Border Government Investigations and Regulatory Enforcement Review is edited by Jonathan B. New and Patrick T. Campbell. Contributing writers are David M. McMillan, Shawn P. Hough, Marco Molina, and Frank M. Oliva.


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