I attended a program on Wednesday night sponsored by the ABA Section of Antitrust Law on “Hot Topics in Antitrust and Criminal Enforcement in the Financial Sector.” The program was hosted by Jones Day in Washington, DC. The program focused on government enforcement in the financial sector with developments in foreign currency exchange (Forex), municipal bonds and LIBOR. A theme of the program was the team effort between the Antitrust and Criminal Divisions of DOJ.
The program was moderated by Mark Rosman, Partner, Wilson Sonsini Goodrich & Rosati. The panelists were:
- Brent Snyder, Deputy Assistant Attorney General, DOJ Antitrust Division
- Daniel Braun, Deputy Chief for Litigation, Fraud Section, DOJ Criminal Division
- Ellen Koplow, General Counsel, TD Ameritrade
- David P. Wales, Partner, Jones Day
The program lasted about an hour after an earlier hour of networking. My impressions of the main points of the discussion are:
- While the Criminal Division and Antitrust Division have always had some interaction, Libor marked the first true joint investigation. Attorneys from both Divisions worked hand in hand from conducting joint witness interviews to bringing charges and negotiating settlements. The Forex investigation is proceeding in the same coordinated fashion. The benefits from this cohesion are, among others, increased manpower, broader expertise in analyzing complex markets allowing for a broader range of charges where appropriate; and one “team” for defense counsel to deal with.
- The Libor investigation has resulted in numerous charges to date and the investigation is continuing. There have been no charges yet in the Forex investigation, but DOJ has acknowledged that the investigation is ongoing.
- The Antitrust Division’s Corporate Amnesty Policy apples only to Title 15 violations. But, where Antitrust has issued a corporate leniency letter, the Criminal Division has not and will not “charge its way around the leniency” by bringing fraud charges for the same conduct. On the other hand, the government will push back on efforts to label fraud conduct a Title 15 violation to take advantage of the leniency program.
- The DOJ is taking a closer look at arguments that a corporate guilty plea to a criminal charge will result in an “Arthur Anderson” implosion of the business and possible serious economic consequences to the economy at large. Experience over the last several years has indicated that not every corporate plea is a fatal blow to the enterprise. By way of example, the panel noted that the DOJ has recently criminally charged two foreign banks, Credit Suisse and BNP Paribas, pursuant to plea agreements whereby they pled guilty and paid fines of $2.6 and $8.9 billion (These were not Libor/Forex cases).
- There was a discussion of the consideration DOJ gives to corporate compliance programs when making charging decisions. Mr. Braun stated that the Criminal Division will take into account the corporate compliance program in effect at the time of the offense and any subsequent remedial measures in deciding whether and/or what charges to bring. Braun suggested that in-house counsel is generally the person who can make the most compelling case about the sincerity and breadth of the company’s compliance program. The Antitrust Division does not give credit for compliance programs, which it considers to be “failed” if a violation has taken place. Mr. Snyder did state, however, that Antitrust is considering whether there might be ways to give credit for compliance efforts. (Both Bill Baer and Brent Snyder have given recent speeches addressing the Antitrust Division’s policy on compliance programs (here and here). They are well worth a read. I covered these speeches in an earlier post (here).
- My last takeaway: This was an excellent program and a good way to spend time with the enforcers and defense attorneys practicing in this area. Food and wine, beer and soft drinks were supplied! But, the programs are also available by telephone. If not already a member, you should consider joining the ABA Section of Antitrust Law and the committees that sponsored the program: Cartel & Criminal Practice Committee; Compliance & Ethics Committee and the Financial & Insurance Services Committee
If you have any questions, feel free to give me a call. Thanks for reading.