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Blank Rome

Going Outside the Sentencing Guidelines: Fallout From Gall and Kimbrough

Matthew D. Lee

In this article, which is the third in a series of articles addressing federal sentencing practice and procedure post-Booker, Matthew Lee analyzes the impact of the United States Supreme Court's recent decisions in Gall and Kimbrough. Mr. Lee's earlier articles in this series are Federal Appeals Courts Offer Disparate Approaches to Appellate Review of Sentences Post-Rita* and Supreme Court Rules That Guidelines Sentences May Be Considered Presumptively Reasonable on Appeal**

More Fallout From the Mortgage Crisis: Government Now Targets Wall Street - Is Main Street Next?

Joseph G. Poluka Lewis W. Schlossberg

An updated overview by Joseph G. Poluka and Lewis W. Schlossberg of the mortgage crisis and how government investigations are focusing on individuals and companies viewed as being associated with the crisis.

Mining Buried Electronic Data: Increasing Criminal and Civil Case Concerns

Joseph G. Poluka Inbal Paz

Our article by Joseph G. Poluka and Inbal Paz looks at how, with the rapid progression of computer technology, the production of documents in response to a government subpoena or civil discovery request has unearthed new and unexplored issues.

Blank Rome's Mortgage Industry Team Prepared for Sub-Prime Crisis

While many firms scramble to assemble teams in response to the sub-prime crisis, Blank Rome's established mortgage industry group has over 25 years of experience in dealing with fluctuating mortgage market volatility and all of the myriad issues highlighted by the recent subprime mortgage crisis.

Gregory F. Linsin Joins Our White Collar Group

Gregory F. Linsin

We are pleased to announce that Gregory F. Linsin has joined the Firm’s Washington office as a Partner in our white collar, internal and government investigations group.

Mr. Linsin concentrates his practice on environmental criminal litigation and compliance counseling. Prior to joining Blank Rome, Mr. Linsin served as Special Litigation Counsel for the United States Department of Justice, Environmental Crimes Section.

Recent & Upcoming Events

Craig L. Hymowitz

February 20, 2008: Our partner Craig Hymowitz led a webinar on The ABCs of Hedge Funds and Other Investment Vehicles – What Are They and What AML Risks Do They Pose to Your Institution? The session attracted 120 attendees and was so successful that we will be doing follow-up sessions later this year. Stay tuned!

March 5, 2008: Blank Rome is co-Sponsoring the Philadelphia White Collar Bar Reception at the ABA White Collar Crime Conference.  If you are attending the Conference, please join us on March 5th, 8 to 11 p.m. in the Pool & Orchard at the Delano Hotel in Miami.

Joseph E. Mayk Craig L. Hymowitz

Diane L. Slifer Andrew K. McMullan Paul H. Schieber

May, 2008: Blank Rome will host our Spring Consumer Law for Business Seminar. Topics will include the latest developments in the use of consumer arbitration agreements, privacy and data security laws relating to consumer information, new identity theft obligations for businesses under amendments to the federal Fair Credit Reporting Act, and telemarketing, fax and email marketing restrictions. Featured speakers will include Joseph Mayk, Craig Hymowitz, Diane Slifer, Andrew McMullin and Paul Schieber. The seminar will be held in the Marvin Comisky Conference Center at 1 Logan Square in Philadelphia.



  • Securities Fraud Suits Increased 43% in 2007, Report Shows
  • High Court Rules Against Investors in Securities Lawsuits
  • White Collar Criminals See Little Jail Time, Review Finds
  • Pension Funds Assume More Prominent Role in Securities Lawsuits
  • Ex-Hedge Fund Manager Indicted in $200 Million Securities Scheme
  • Ex-Insurance Execs Found Guilty in Securities Fraud Scheme
  • Former Marsh Executives Convicted in Bid-Rigging Case
  • SEC Works With FBI to Uncover Penny Stock, Kickback Schemes
  • Securities Law Provision Makes Some Violations Unclear
  • Businessman Charged in $140 Million Securities Fraud Scam
  • Billionaire Pays $52 Million in False Tax Return Case, IRS Says
  • Judge Sentences Ex-Bankers to Three Years For Role in Enron Fraud
  • Judge Opposes $4M Fraud Plea From Property Management Co.
    • Securities Fraud Suits Increased 43% in 2007, Report Shows
      The number of federal class-action lawsuits alleging securities fraud spiked 43 percent in 2007 as the subprime-mortgage mess unfolded, ending a two-year decline, according to research released by the Stanford Law School. The annual report by the law school's Securities Class Action Clearinghouse and Cornerstone Research in Boston found that plaintiffs filed 166 suits last year, up from 116 in 2006.
      (Source: SiliconValley.com (free reg. req'd), 2008-01-04) Read the article
      High Court Rules Against Investors in Securities Lawsuits
      In a decision sought by corporate America to stem the tide of securities lawsuits, the U.S. Supreme Court pulled the plug on investors trying to sue some suppliers of a company whose stock price was inflated with the aid of the suppliers. The high court held that the investors did not have the private right to sue because they did not rely upon the statements or representations made by the suppliers.
      (Source: Insurance Journal, 2008-02-15) Read the article
      White Collar Criminals See Little Jail Time, Review Finds
      Sixty-one percent of defendants sentenced in the Bush administration's crackdown on corporate fraud spent no more than two years in jail, escaping the stiff penalties given WorldCom Inc. and Enron Corp. executives. In the past five years, 28 percent of those sentenced got no prison time and six percent received 10 years or more, according to a review of 1,236 white-collar convictions.
      (Source: Bloomberg, 2007-12-13) Read the article
      Pension Funds Assume More Prominent Role in Securities Lawsuits
      Pension funds and other institutional investors have taken a growing role in securities litigation, according to a study by The Corporate Library. Public pension funds have been assigned lead-plaintiff status in 14 of 25 cases filed in 2007 that reached that point in the litigation, the study said.
      (Source: Pensions & Investments, 2008-01-29) Read the article
      Ex-Hedge Fund Manager Indicted in $200 Million Securities Scheme
      Former Lancer Group hedge fund manager Michael Lauer and four others who defrauded hedge fund investors of more than $200 million have been indicted on conspiracy and wire fraud charges, the U.S. Justice Department said. According to the indictment, from October 1999 to July 2003, Lauer and his co-defendants manipulated the closing market price of thinly traded shell company securities to falsely inflate the value of Lancer Group hedge funds.
      (Source: Reuters, 2008-02-19) Read the article
      Ex-Insurance Execs Found Guilty in Securities Fraud Scheme
      Five former insurance executives were found guilty of fraud and conspiracy in a scheme to manipulate the financial statements of the insurance company American International Group. The defendants were convicted on all 16 charges, including conspiracy, securities fraud, mail fraud and lying to the Securities and Exchange Commission.
      (Source: The New York Times (free reg. req'd), 2008-02-26) Read the article
      Former Marsh Executives Convicted in Bid-Rigging Case
      Two former Marsh Inc. executives were convicted in New York state court on an antitrust charge in a bid-rigging case brought by the New York Attorney General's Office. In Manhattan, New York State Supreme Court Justice James Yates found William Gilman, Marsh's former executive marketing director, and Edward J. McNenney, the insurance broker's former global placement director, guilty of restraint of trade under New York's Donnelly Act after a 10-month trial.
      (Source: CNNMoney.com, 2008-02-22) Read the article
      SEC Works With FBI to Uncover Penny Stock, Kickback Schemes
      Federal regulators, targeting five separate schemes that involved penny stocks and alleged kickbacks to a fictitious hedge fund, have criminally indicted six individuals and filed civil charges against 10 individuals or companies they controlled. According to the SEC, the individuals charged are insiders or promoters of publicly traded companies, and live in Florida, New York, California, or Nevada.
      (Source: CFO.com, 2007-12-10) Read the article
      Securities Law Provision Makes Some Violations Unclear
      A person who legally obtains insider information -- as a corporate official or an investment banker, for example -- will almost certainly break the securities law if he or she trades on the basis of that information before it is made public, but it is far less clear that someone who illegally gets their hands on such information will have violated the securities laws by trading on it. The securities law used to bring insider trading charges -- Section 10(b) of the 1934 Securities Exchange Act -- talks of "a deceptive device or contrivance," and it is not clear that there is any deception involved in simple theft.
      (Source: The New York Times (free reg. req'd), 2008-02-15) Read the article
      Businessman Charged in $140 Million Securities Fraud Scam
      The Utah Attorney General's Office has filed criminal charges against an Ogden businessman accused of bilking hundreds of investors out of more than $140 million. Val Edmund Southwick, 62, was charged in Salt Lake City's 3rd District Court with nine counts of securities fraud, a second-degree felony. Prosecutors accuse him of bilking 817 investors out of millions in a commercial real-estate investment scheme.
      (Source: Deseret News, 2008-02-07) Read the article
      Billionaire Pays $52 Million in False Tax Return Case, IRS Says
      A billionaire accused of stashing a fortune in foreign bank accounts pleaded guilty to filing a false tax return and has paid more than $52 million in back taxes, penalties and interest, the Internal Revenue Service said. Igor Olenicoff entered the plea in federal court, according to the IRS, and faces up to three years in prison.
      (Source: San Francisco Chronicle, 2007-12-13) Read the article
      Judge Sentences Ex-Bankers to Three Years For Role in Enron Fraud
      A U.S. judge sentenced three British bankers, known as the "NatWest 3," to three years and one month each in prison for their role in an Enron-related fraud case. Prosecutors had accused the men of conspiring with former Enron Corp Chief Financial Officer Andrew Fastow to defraud National Westminster Bank Plc, or NatWest, of $19 million, dividing $7 million among themselves.
      (Source: Reuters, 2008-02-22) Read the article
      Judge Opposes $4M Fraud Plea From Property Management Co.
      The deal was all worked out. McSha Properties, a Norman property management company, would plead guilty to federal fraud charges and agree not to be involved in any more low-income housing construction projects like the one at the root of the charges, and the U.S. government would get more than $4 million in restitution and fines to make up for what it lost in the fraud scheme. But Judge Joe Heaton rejected a proposed plea agreement last month, putting the case against McSha squarely in limbo.
      (Source: NewsOK, 2008-02-25) Read the article
      By listening to general counsel, business leaders, and entrepreneurs and anticipating their needs, Blank Rome has provided service to clients for more than 60 years. We have become one of America's fastest-growing law firms by adding leading talent and new practice areas to handle critical matters. Learn why our know-how, depth, and diversity, can enhance your business. At Blank Rome, we see the world through our clients' eyes.

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      For the Defense is a quarterly e-mail service edited by Joseph G. Poluka and provided by Blank Rome LLP. © 2008, Blank Rome LLP. Notice: The purpose of this newsletter is to identify select developments that may be of interest to readers. The information contained herein is abridged and summarized from various sources, the accuracy and completeness of which cannot be assured. The For the Defense newsletter should not be construed as legal advice or opinion, and is not a substitute for the advice of counsel. Additional information may be found on website www.blankrome.com.

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      Any Federal tax advice contained herein is not intended or written to be used, and cannot be used by you or any other person, for the purpose of avoiding any penalties that may be imposed by the Internal Revenue Code. This disclosure is made in accordance with the rules of Treasury Department Circular 230 governing standards of practice before the Internal Revenue Service. Any written statement contained herein relating to any Federal tax transaction or matter may not be used by any person without the express prior written permission in each instance of a partner of this firm to support the promotion or marketing of or to recommend any Federal tax transaction(s) or matter(s) addressed herein.