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.

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.

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.

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.

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.

Image by Håkan Dahlström Photography

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.

Image by Steve Jurvetson

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.

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.

Legal 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.

The ABA Journal reports that A Florida lawyer defrauded, deceived and embezzled funds from two mentally disabled clients who were declared innocent after spending 31 years in prison, according to a complaint filed Wednesday by the North Carolina State Bar.

“Henry McCollum and his half-brother, Leon Brown, were exonerated in 2014 after serving decades in prison for the notorious rape and murder of an 11-year-old girl. They received $750,000 each from the state in compensation,” writes Joseph Neff for the Marshall Project.

Orlando lawyer Patrick Megaro took excessive fees when he pocketed a third of the awards despite having done virtually no work on their exonerations or compensation cases, the state bar alleges.

Read the ABA Journal article.

The Washington Post reports on a meeting of the country’s top federal and state law enforcement officials on Tuesday that could presage sweeping new investigations of Amazon, Facebook, Google and their tech industry peers.

Participants voiced lingering frustrations that these companies are too big, fail to safeguard users’ private data and don’t cooperate with legal demands.

“Attorney General Jeff Sessions opened the meeting by raising questions of possible ideological bias among the tech companies and sought to bring the conversation back to that topic at least twice more, according to D.C. Attorney General Karl A. Racine,” according to reporters Brian Fung and Tony Romm.

But other participants steered the conversation toward the privacy practices of Silicon Valley.

Read the Washington Post article.

A federal grand jury has indicted three men for what officials describe as a $364 million Ponzi scheme to defraud investors, reports The Dallas Morning News.

Jay B. Ledford and Cameron R. Jezierski of Texas, along with Kevin B. Merrill of Maryland, raised money from investors who thought they were buying into cheap portfolios of consumer debt on credit cards and student and auto loans, investigators from the Federal Bureau of Investigation and Securities and Exchange Commission said.

“The defendants lured investors through an elaborate web of lies, duping them into paying millions of dollars into this Ponzi scheme,” said U.S. Attorney Robert K. Hur in a statement.

The report by Lison Joseph says the trio spent more than $73 million of investors’ money at casinos and to buy diamond jewelry and luxury cars including Lamborghinis, Ferraris, Bentleys and Bugattis.

Read the Dallas News article.

Image by Mike Mozart

Reuters is reporting that Citigroup Inc. on Friday was ordered to pay more than $12 million by U.S. regulators after it was found that the bank’s investment banking and financial advisory unit misled users of a “dark pool” operated by one of its affiliates.

The article explains:

The bank will pay a penalty of $6.5 million and disgorgement and prejudgment interest totaling $5.4 million, while its affiliate, Citi Order Routing and Execution (CORE), will pay a penalty of $1 million, the U.S. Securities and Exchange Commission (SEC) said in a statement.

Read the Reuters article.

Rebecca “Becky” Wood, former chief counsel to the Food and Drug Administration, has rejoined Sidley Austin LLP as a partner.

The firm announced Wood will co-lead both the firm’s Food, Drug, and Medical Device Regulatory practice and its FDA group in Washington with partner Coleen Klasmeier.

Wood previously served as Chief Counsel to the Food and Drug Administration (FDA) and Associate General Counsel in the Office of the General Counsel, Department of Health & Human Services. She will focus her practice on providing counsel on a wide range of contentious and non-contentious FDA regulatory and litigation issues to clients in the life sciences industry and private equity firms investing in the area.

In her role as Chief Counsel to the FDA, Wood served on Commissioner Scott Gottlieb’s leadership team. She was the principal legal advisor on major initiatives, including efforts to streamline the drug and device development and approval process, modernize the agency’s regulatory framework, combat addiction to opioids and nicotine, enhance the product safety and labeling of food and medical products, and address drug pricing. She served as a liaison to the Department of Justice and the White House and advised agency leadership on legislative matters. She also focused on First Amendment and preemption issues.

“We are delighted that Becky is rejoining us,” said Klasmeier. “Regulatory insight is at the core of our life sciences practice. Based on both her long experience in the industry and her role as the lead legal advisor to the FDA during a transformational period, Becky will enhance our ability to offer deep strategic insight into the complex regulatory issues facing our clients and to defend our clients’ conduct when challenged. Becky’s perspective on the rapidly changing regulatory environment is unique.”

Prior to joining the FDA in 2017, Wood served as a partner at Sidley for more than a decade. She focused her practice on district court and appellate litigation arising under the Federal Food, Drug, and Cosmetic Act and the United States Constitution, including managing class actions and multi-plaintiff cases. Earlier in her career, she served as a law clerk to Judge Pasco M. Bowman II of the United States Court of Appeals for the Eighth Circuit.

“Becky is an extraordinarily accomplished litigator,” said Mark Hopson, global co-chair of Sidley’s litigation practice and managing partner of the Washington, D.C. office. “The intersection of her premier regulatory and litigation practices will greatly bolster the firm’s capabilities to help clients across a wide spectrum of legal areas.”

The ABA Journal reports that former Dewey & LeBoeuf chairman Steven Davis has reached an agreement with the U.S. Securities and Exchange Commission to pay a $130,000 civil penalty.

The SEC alleged that some executives of Dewey & LeBoeuf, which closed in 2012, misled lenders and bond buyers about the firm’s financial condition.

Dewey’s former finance director former controller also agreed to pay civil penalties.

Read the ABA Journal article.

The U.S. Environmental Protection Agency’s proposed Affordable Clean Energy (ACE) rule would establish guidelines for states to develop plans to address greenhouse gas emissions from certain existing fossil-fuel-fired power plants.

A post on the Beveridge & Diamond website says ACE would replace the Obama Administration’s 2015 Clean Power Pla, which EPA has proposed to repeal on the basis that it exceeded EPA’s authority.

“In particular, the current Administration does not believe it has authority under Section 111 of the Clean Air Act to require regulated entities to take actions “outside the fenceline,” as contemplated by the CPP.  Accordingly, the ACE plan would impose only “inside the fenceline” requirements on electric generating units,” write authors Brook J. Detterman and Grant Tolley.

Read the article.

The U.S. Federal Trade Commission failed to convince a federal judge in San Francisco that DirecTV should pay nearly $4 billion in restitution to customers for allegedly misleading consumers about the costs of programming packages, Bloomberg reports.

The said that “the scope of the maximum potential recovery in this case has been substantially curtailed,” according to reporter Pamela MacLean.

The FTC suit alleged that DirecTV failed to disclose to consumers in 40,000 print, mail, online and TV advertisements that its lower introductory pricing lasted just one year but tied buyers to a two-year contract.

Read the Bloomberg article.

Micah Dortch, managing partner of the Dallas office of the Potts Law Firm, has been appointed a special receiver in litigation originally brought by the Securities and Exchange Commission against a group of Texas businessmen, the firm announced. That lawsuit seeks to recover funds from what was characterized as a fraudulent investment scheme directed by Thurman P. Bryant III of Frisco and Arthur E. Wammel of Pearland, along with affiliated companies and individuals.

The firm says that evidence in the case revealed that, in less than three years, the defendants were able to withdraw or transfer more than $20 million in cash from Wells Fargo Bank accounts in violation of industry standards and the bank’s own policies. Despite numerous five-figure and six-figure cash withdrawals, Wells Fargo management never verified, questioned or restricted any of the activities, according to allegations.

According to the SEC complaint, originally filed in 2017, the defendants raised more than $22 million from more than 100 investors to purportedly fund short-term mortgage loans for later sale to long-term lenders. The SEC says that no such program existed, and that Bryant and Wammel were operating a Ponzi scheme, with limited returns paid to investors from monies raised from other investors.

Dortch has been appointed by the court to investigate the role of Wells Fargo in the matter and to seek financial compensation on behalf of the defrauded investors, filing a complaint alleging that Wells Fargo failed to follow its fiduciary role.

“As stated in the complaint, Wells Fargo either knew about the scheme or willfully ignored the questionable actions being made in violation of its own internal rules,” said Dortch. “I’m honored to take on this role and gain a just resolution for these innocent victims.”

The case is Ecklund v. Wells Fargo Bank, N.A., No. 4:18-cv-00452-ALM, filed in U.S. District Court for the Eastern District of Texas in Sherman.

The Department of Energy has announced a final rule that will expedite the approval process for small-scale exports of natural gas, reports Cadwalader.

Special counsel Brett A. Snyder writes:

The DOE explained that the new rule is intended to accelerate its processing of small-scale export applications and reduce administrative burdens for the small-scale natural gas export market.

Effective August 24, 2018, the DOE will issue an export authorization, without public notice and comment, to an applicant submitting a complete application to export natural gas, including liquefied natural gas (“LNG”), to countries with which the United States has not entered into a free trade agreement (“FTA”) that requires national treatment for trade in natural gas and with which trade is not prohibited by U.S. law or policy (i.e., non-FTA countries), if the application meets two criteria.

Read the article.

The federal government challenged a judicial decision allowing AT&T to purchase Time Warner, arguing to a federal appeals court in Washington that the ruling suffered from “faulty logic” and ignored basic economic principles, according to The Washington Post.

The Justice Department asserted that the district court misunderstood the power dynamics at work when television distributors such as AT&T negotiate with TV programmers over content prices and terms, writes Brian Fung.

In its filing, the DOJ called the decision a “deeply flawed assessment of the government’s evidence.”

“It is fundamental to the economics of bargaining that a party derives leverage from having the ability to walk away, even if it never actually does so,” the Justice Department wrote.

Read the Washington Post article.