Government Investigations & White Collar Crime (J)
This is a TIAG and TAGLaw "Joint" Specialty Group.
The TIAG Co-chairs are shown below. Click the "Group Member List" icon to view co-chairs and members from both TIAG and TAGLaw.
Meet the Co-chairs - TIAG
Hemming Morse, LLP
Meet the Co-chairs - TAGLAW
Berger Singerman LLP
Contact: Sally L Hoffman, CPA, CFE, CFF; Berdon LLP (New York, New York, USA)
Recently, my Twitter feed and email were bombarded with the news that J.P. Morgan had agreed to pay $920 million to settle civil claims by US and UK regulators that a pervasive breakdown in internal controls left the bank vulnerable to $6 billion in derivative trading losses by the notorious "London Whale"1. Significantly, J.P. Morgan acknowledged that it violated securities laws.
Increasingly, challenges to the adequacy of internal controls have been creeping into both SEC Enforcement Actions and private litigation, a trend likely to continue. A summary of accounting class actions spotlights this trend from 2010 to 2012, and also explains that cases involving company announcements of internal control weaknesses increased to almost 45 percent of all cases settled in 2012 and were associated with higher settlements.2 Moreover, the SEC's Division of Enforcement's recently formed financial reporting and accounting fraud task force will reinforce this trend.
On August 15, 2013, the Ontario Superior Court of Justice found Mr. Nazir Karigar guilty of violating the Corruption of Foreign Public Officials Act1 (â€œCFPOAâ€). At the time of the decision, the CFPOA had already been amended by the Fighting Foreign Corruption Act2 (â€œFFCAâ€), which received Royal Assent on June 19, 2013. However, the conduct that led to Mr. Karigar being charged allegedly occurred between 2005 and 2008. As a result, the Karigar case was decided under the prior law. Nevertheless, it still contains valuable insight that will also apply to the current CFPOA.
Last week, the Department of Justice brought a sweeping indictment against several former Peanut Corporation of America (PCA) executives alleging egregious, and intentional, violations of food safety laws that caused the salmonella peanut outbreak of 2008. The indictment alleges that the individuals perpetrated a scheme from as early as 2003 where they sold peanut products to food manufacturers that the individuals allegedly knew were contaminated with salmonella and other pathogens.