Ex-JPMorgan Trader Pleads Guilty in Six-Year Spoofing Plot

A former precious-metals trader said to have worked at JPMorgan Chase & Co. admitted he engaged in a six-year spoofing scheme that defrauded investors in futures contracts with the help of his colleagues and bosses, Bloomberg Law reports.

Prosecutors said John Edmonds placed hundreds of orders he never intended to execute — orders designed to move the market, but were canceled before being matched. Edmonds and other traders sought to manipulate futures markets for gold, silver, platinum and palladium on the Nymex and Comex exchanges for their own benefit.

The Bloomberg article continues: “Edmonds, who lives in Brooklyn, New York, said he learned the spoofing strategy from more senior traders at the bank and said his immediate supervisors approved of it, according to the Justice Department.”

Read the Bloomberg Law article.



Federal Judge Blocks Keystone Pipeline XL in Major Blow to Trump Administration

Image by Elvert Barnes

A federal judge temporarily blocked construction of the controversial Keystone XL pipeline, ruling late Thursday that the Trump administration had failed to justify its decision granting a permit for the 1,200-mile long project designed to connect Canada’s oil sands fields with Texas’s Gulf Coast refineries.

The Washington Post characterized the order as a  major defeat for President Trump, who attacked the Obama administration for stopping the project in the face of protests and an environmental impact study.

Post reporters explain that the order “requires the administration to conduct a more complete review of potential adverse impacts related to climate change, cultural resources and endangered species. The court basically ordered a do-over.”

Read the Washington Post article.




2018 Eastern District of Texas Bench Bar Conference Sets Attendance Record

The Eastern District of Texas Bench Bar Conference set a new attendance record this year with more than 450 attendees gathering in Plano, Texas, for three days of programming and panel discussions focused on the diverse legal cases handled by the U.S. District Court for the Eastern District of Texas.

Andrei Iancu, U.S. Secretary of Commerce for Intellectual Property and Director of the U.S. Patent and Trademark Office, delivered a major policy address during the event.

Iancu’s speech at the Inaugural Texas Dinner in Honor of the Judiciary and 7th Amendment was reported by many media outlets as a push back against the “patent troll” narrative that has encircled America’s intellectual property system for more than a decade.

Read details about the conference.




Ex-Penn State University GC Cleared of Wrongdoing

Former Pennsylvania Supreme Court justice and Penn State University general counsel Cynthia Baldwin was cleared Friday of any wrongdoing relative to her representation of university officials during the Jerry Sandusky investigation, reports the Pittsburgh Post-Gazette.

She had been accused by the Pennsylvania Office of Disciplinary Counsel of violating several of the Rules of Professional Conduct for attorneys as she represented Penn State, former PSU president Graham Spanier, and two other administrators while she served as university general counsel from 2010 to 2012, writes reporter Paula Reed Ward.

The case included an alleged conflict in representing the interests of the university as well as the three administrators before the investigating grand jury. All three administrators were convicted of child endangerment stemming from a case which resulted in a former university assistant football coach being convicted of sexually abusing children.

Read the Post-Gazette article.



DOJ Announces Guidelines to Reduce the Imposition of Monitorships in Corporate Criminal Cases

ComplianceThe Justice Department’s Criminal Division has announced updated policies and procedures related to the selection of corporate monitors in federal criminal cases, according to an advisory written by Paul N. Monnin, a partner in Alston &. Bird.

He writes:

The memorandum makes clear that “the Criminal Division should favor the imposition of a monitor only where there is a demonstrated need for, and clear benefit to be derived from, a monitorship relative to the costs and burdens.” In short, a monitor is now disfavored “[w]here a corporation’s compliance program and controls are demonstrated to be effective and appropriately resourced at the time of resolution.”

The article also includes a link to a PDF of the DOJ advisory.

Read the article.



CEO Allegedly Stole Millions From Low-Income Customers to Pay for a Ferrari, a Private Jet and a Florida Condo

An Ohio company faces a record fine of more than $63 million after allegedly bilking a government aid program out of millions of dollars, some of which went toward funding the lavish lifestyle of the firm’s chief executive, federal regulators said Tuesday.

The Washington Post reports that the the Federal Communications Commission is taking action against American Broadband, a provider of low-income phone service whose agents allegedly created fake or duplicate customer accounts to claim extra federal funding under a program that offers disadvantaged Americans a small monthly discount on phone and Internet service.

Post reporter Brian Fung explains:

American Broadband’s chief executive, Jeffrey Ansted, was also held personally liable for the alleged misconduct Tuesday as the FCC accused him of embezzling aid money and using it to pay for luxury goods such as an $8 million private Cessna jet, a $1.3 million Florida condominium and a $250,000 Ferrari convertible. He also used the funds to buy memberships to yacht and country clubs, the FCC said.

Read the Washington Post article.



‘Frack Master’ of Texas Oil Fame Pleads Guilty to Massive Fraud, Faces Up to 12 Years in Prison

The Dallas Morning News reports that Texas businessman Christopher Faulkner, better known by his now infamous moniker “Frack Master,” has admitted to securities fraud, tax evasion and money laundering and faces up to 12 years in prison, federal officials said Tuesday.

Reporter Jess Mosier writes that Faulkner, the former CEO of Dallas-based Breitling Energy, became a star in business circles for his high-profile media appearances defending hydraulic fracturing or fracking. He used fake college degrees and skimpy business experience to convince Dallas business elite and Texas political elite that he was an oil and gas expert.

“The SEC effectively shut down Breitling Energy and related businesses after suing Faulkner and 11 others in 2016 for misusing $23.8 million of the $80 million they raised for oil and gas investments,” according to Mosier. “Besides the prison time, Faulkner must pay back the nearly $24 million made from his schemes, under the terms of his settlement.”

Read the Dallas News article.



Company Couldn’t Cut Disabled Worker’s Benefits, So It ‘Went Rogue’ and Had Him Arrested, Lawyer Says

Over the past 15 years, Key Risk Insurance Co. has made multiple trips to courts and before the North Carolina Industrial Commission to argue that Mario Seguro-Suarez has been faking his symptoms from an on-the-job injury and that his benefits should be cut off.

The Charlotte Observer reports documents show that the company disregarded years of medical opinions — including several from its own doctors — that Seguro-Suarez was indeed left disabled from his fall at a Southern Fiber factory. The 2003 head-first fall from 18 feet onto a concrete floor left him disabled.

After years of failing to cut off payments to Seguro-Suarez, the insurance company’s private detective “took what a detective would describe as misleading information to Lincolnton police to accuse Seguro-Suarez of insurance fraud. He was arrested, jailed and later indicted,” reporter Michael Gordon writes.

That attempt drew a withering rebuke from a judge, and now Seguro-Suarez is suing for malicious prosecution.

Read the Charlotte Observer article.




Barnes & Thornburg Secures Trade Victory for PMP Fermentation Products

The U.S. International Trade Commission has unanimously affirmed that PMP Fermentation Products, Inc. was materially injured by unfairly traded sodium gluconate, gluconic acid, and derivative imports from China.

Barnes & Thornburg represented PMP before the commission.

Inn a release, the firm said the final USITC decision of Oct. 16 followed the U.S. Department of Commerce’s imposition of two sets of tariffs, antidumping and countervailing duties totaling over 408 percent on Chinese sodium gluconate products after it was determined they were subsidized and sold in the U.S. market at less than fair value. These tariffs were imposed to protect PMP from unfair Chinese trade and were in response to a petition prosecuted by Barnes & Thornburg.

“We’re delighted the USITC found that PMP was injured by reason of chronically low-priced Chinese imports underselling U.S. products,” said David Spooner of Barnes & Thornburg. “We expect this decision will help level the playing field for the U.S. manufacturer, PMP.”

The Barnes & Thornburg team representing PMP consisted of Spooner, Christine Sohar Henter and Nicholas Galbraith in the firm’s Washington, D.C., office, and Mari Yamamoto Regnier in Chicago.



Lawyer Who Called Decision ‘La La Land on Steroids’ is Suspended for His Wide-Ranging Criticism

A New York appeals court has suspended a Suffolk County lawyer for three months for “inexcusable” criticism about courts hearing two of his cases, reports the ABA Journal.

The court rejected a referee’s recommendation for a public censure and suspended lawyer Gino Giorgini for three months.

An example of his comments to a judge include:

“THIS IS LA LA LAND ON STEROIDS. … I CAN NOT COMPREHEND THE #%%#$^% THAT IS THIS DECISION. … This is so bizzaro land that it is hard to type. What is even more pathetic is the case I cited (citation omitted) has been ignored.”

Read the ABA Journal article.




Pipeline Companies Should Do More to Prepare for NTSB Accident Investigations

The National Transportation Safety Board is well known for its sleuthing on plane crashes. However, oil and gas executives often need better education about how the agency tackles one of its other responsibilities—investigating pipeline accidents, advise attorneys with the national law firm LeClairRyan.

The catastrophic gas explosions that destroyed dozens of homes in Massachusetts this month have called attention to the NTSB’s role in investigating such incidents, noted Mark A. Dombroff, an Alexandria-based member of LeClairRyan and co-leader of its Transportation Industry practice. “Most, but not all, in the pipeline business are aware that something like this will immediately trigger a federally mandated and led investigation,” he said. “But their counterparts in aviation tend to be far better prepared to contend with the highly specific—and high-stakes—investigative process relied upon by NTSB.”

Read the article.




Former Foley & Lardner Partner Suspended for Falsifying Documents in IRS Audit of Wealthy Clients

A former Foley & Lardner partner was suspended two years by the state Supreme Court for lying to the IRS during an audit of two wealthy estates connected to a major area business, reports the Milwaukee Journal Sentinel.

“The firm fired Adam Wiensch, 55, in 2016 when it learned he had falsified documents related to the transfer of wealth from the owners of Carma Laboratories to their children, a move that attempted to save the family millions in taxes,” writes the Journal Sentinel‘s Bruce Vielmetti.

The court’s opinion recounts Wiensch’s earlier testimony that he had been facing “several highly disruptive and personal” issues at the time of his offenses, and was dealing with depression and alcoholism.

Read the Journal Sentinel article.



Enforcement Pressure Hit Ag, Livestock Operations

As extreme weather becomes more commonplace, agricultural and livestock operations are increasingly facing civil and criminal enforcement and regulatory crackdowns for water runoff contamination caused by events beyond their control. Across the country, ag operations and feedlots have been the focus of a growing number of enforcement actions, including those filed by state attorneys general. Often there are large civil monetary penalties, according to a post on the website of Androvett Legal Media & Marketing.

“In many cases, small ag operations can be compliant with regulations before a historic flooding event and still face financial penalties that push family-owned businesses to the brink of bankruptcy or worse,” said attorney Chris Carrington of Denver-based Richards Carrington, who advises farm and ranch owners in legal and regulatory proceedings.

“More and more, governmental entities are under community and political pressure to take action, and that’s often at the expense of due process and fairness. It’s important for these businesses to know and appreciate the law and the forces at play before a catastrophic event occurs.” Carrington is addressing these topics in a series of presentations to the Colorado livestock and agriculture industries.



Florida Supreme Court Foils Governor’s Plan to Pick New Justices

The Associated Press reports that Florida’s next governor and not incumbent Gov. Rick Scott will get to pick three new justices to the state Supreme Court, the court ruled in a decision with major implications in this year’s gubernatorial campaign.

“In a major rebuke to Scott, the Supreme Court concluded that the Republican governor exceeded his authority when he started the process to find replacements for the three justices,” the AP reports.

Because of age limits of 70, three justices must retire at midnight Jan. 8, the same day Scott is scheduled to leave the governor’s office. Scott, claiming he had authority to name the replacements, last month asked a nominating commission to start accepting applications with a Nov. 10 deadline.

Read the AP article.



Trump Reportedly Floating 5 Different Names to Replace Attorney General Jeff Sessions

Jeff Sessions

Jeff Sessions

President Donald Trump believes Attorney General Jeff Sessions will likely leave his Cabinet at the end of the year, and so far has five potential replacements in mind who could take his place, reports Business Insider.

“Possible successors include retired federal appeals judge Janice Rogers Brown, transportation department counsel Steven Bradbury, Health and Human Services secretary Alex Azar, deputy Secretary of State John Sullivan, and Bill Barr, who served as attorney general under President George H.W. Bush,” according to the article, based on a Wall Street Journal report.

The Washington Post also reported that President Trump talked recently with Sessions’ own chief of staff, Matthew G. Whitaker,  about replacing Sessions as AG, according to people briefed on the conversation, signaling that the president remains keenly interested in ousting his top law enforcement official.

Read the Business Insider article.




Discrimination Defense Lawyer Confirmed for Trump Civil Rights Post

Bloomberg Law reports that the U.S. Senate has confirmed Eric Dreiband, a Jones Day attorney who defends companies accused of discrimination, to lead the Justice Department office that enforces anti-bias laws and investigates police civil rights cases.

“Dreiband represented the University of North Carolina when it implemented policies under the state’s since-repealed ‘bathroom bill,’ requiring people to use gender-designated restroom facilities based on the biological sex listed on their birth certificates,” writes Bloomberg’s Chris Opfer. “He also won a case for R.J. Reynolds Tobacco that made it harder for workers to sue for age discrimination under federal law.”

Read the Bloomberg Law article.



HSBC to Pay $765 Million in Settlement Over Pre-Crisis Mortgage Bonds

Housing Wire is reporting that HSBC will pay $765 million to the federal government as part of a settlement that covers the bank’s mortgage bond activities in the run-up to the housing crisis.

An announcement from the U.S. Department of Justice outlines the resolution of an investigation into the bank’s mortgage origination and securitization activities from 2005 to 2007, according to editor Ben Lane.

While previous HSBC statements on the case didn’t disclose the conduct in question, the DOJ’s announcement alleged the bank allegedly knew it was putting toxic loans into residential mortgage-backed securities and sold the bonds anyway, Lane explains.

Read the HousingWire article.



What Tesla Really Needs, SEC Says, Is an ‘Experienced’ Lawyer

Of the all fixes the SEC wants Tesla Inc. to make in the wake of Elon Musk’s now-infamous tweet, one stands out for its novelty: “An experienced securities lawyer” to review all social media communications by the company’s senior officers, reports Bloomberg Law.

“In resolving its fraud claims against Tesla and Musk, the Securities and Exchange Commission specified in the fine print of its settlement proposal that the lawyer hired or designated to vet tweets must have qualifications that’“are not unacceptable to the staff,’” writes reporter Peter Blumberg.

The head of the legal department now is a lawyer who represented Musk through two divorces, Todd Maron.

Read the Bloomberg Law article.



Morrison & Foerster Will Eat $16M in Fees, Costs Pursuing Vets’ Claims

The law firm that spent nine years fighting and winning health care for veterans subjected to government-administered human testing of chemicals including sarin, mustard gas, and LSD was awarded $3.4 million in fees, a small fraction of the value of the hours the firm said it put into the case.

Bloomberg Law reports that Morrison & Foerster LLP accepted a fee award from the U.S. Army that’s $16 million less than the fee the firm could have sought.

“The fee award is the latest and nearly last chapter in the litigation by soldiers subjected to the government’s decades-long human testing program who were seeking recognition and health care above what they could get at the Veterans Administration for injuries they suffered,” writes Bloomberg’s Joyce Cutler.

Read the Bloomberg Law article.




Elon Musk’s SEC Settlement Could Have Gone So Much Worse

SECLegal experts say the penalties that the SEC doled out to Elon Musk for  “false and misleading” statements made on Twitter could have been much, much worse for Musk and his car company, reports Wired.

Reporter Aarian Marshall writes that “Musk and Tesla will have to each write $20 million checks for the misadventure, which will be disbursed to investors harmed during the wild market swings that occurred after Musk’s tweets.” Musk had tweeted that he planned to take Tesla private and funding had been secured.

“Not settling with the SEC could have led to a more dire outcome,” Marshall explains. “The SEC’s initial suit sought to bar the CEO from becoming an officer or director for any public company, perhaps for life.”

Read the Wired article.