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KPMG Starts Mud-Wrestling in Civil Suits
KPMG’s aggressive tax shelter business has triggered a flurry of lawsuits by former clients of the firm who have run afoul of the IRS for claiming deductions for shelters that were declared abusive. Having admitted that tax partners engaged in "unlawful conduct" in creating and selling the tax shelters, KPMG is now in the delicate…
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Deferred Prosecutions: Who Gets It and Who Doesn’t
Which company will receive a deferred prosecution and which will not? It’s a good question and perhaps a question that no one knows the answer to except DOJ, and it sounds like they’re not talking. Leonard Post has a wonderful article in the National Law Journal (law.com) here that looks at this question examining companies…
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Talk or You’re Fired – United Rentals
Employees within companies have recently been facing the ramifications of failing to answer questions of a board or corporation counsel when the company is being examined. If you don’t answer the questions, they send you out the door to go find other employment. United Rentals, Inc. admits here that the Board of Directors "terminated the…
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Jim Guy Tucker Loses Attempt to Reopen Plea
When Ken Starr was handling the Whitewater Investigation, he obtained a plea from former Arkansas Governor Jim Guy Tucker. The agreement was contingent on Tucker cooperating with the Independent Counsel (5 K1.1). Tucker accepted the plea at that time, but later went on to challenge the plea agreement. Yesterday the 8th Circuit ruled, affirming the…
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Decision on Palmeiro Perjury Could Come Next Week
The House Government Reform Committee’s investigation into whether Baltimore Oriole player Rafael Palmeiro committed perjury this March when he testified (quite emphatically) that he had never taken steroids, and then was suspended by major league baseball after a positive steroid test, could wrap up as soon as next week. Committee Chairman Tom Davis and Ranking…
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Goodyear Joins the Wells Notice Club
Goodyear Tire & Rubber Co. disclosed that an SEC investigation begun in November 2003 may be nearing its completion with the Enforcement Division staff sending the company a Wells Notice that the staff intends to recommend a civil securities enforcement action. The investigation arose out of Goodyear’s restatement of its earnings related to internal control…
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What Do You Do When You’re the Target of an Investigation?
The government’s investigation of Milberg Weiss and spin-off firm Lerach Coughlin has called for the common response from William Lerach, one of the chief targets of the investigation: hire one of the best criminal defense attorneys around (John Keker in this case), who in turn hires a high-powered public relations person to handle the media. …
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The Incredible Shrinking Prosecution
The Wall Street Journal has an interesting story (here) about the prosecution of Irving Kott that began with a search of a small brokerage firm in Beverly Hills that led to a 48-count securities fraud indictment, and ended with a plea to two counts of filing false documents with the SEC. The Journal sought to…
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Criminal and Civil Charges Against Four Brokers for Aiding “Front-Running” by Day-Traders
The U.S. Attorney’s Office for the Eastern District of New York and the SEC filed charges against four brokers for allowing day-traders to listen in on market analysis and customer order information through the brokerage firms’ internal communications systems, known as the "Squawk Box." The brokers worked at major Wall Street firms: Kenneth Mahaffy (Merrill…
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Stupidity Is Not a Crime . . . Yet
Of the many corporate collapses of the past few years, K-Mart’s bankruptcy was among the largest. The pay and perks of its last CEO, Charles Conaway, drew the attention of the DOJ and SEC because he received $23 million for a little less than two years work while the company went down the drain. In…
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