Chronicle of Disgorgement's Death Foretold: Kokesh v. SEC

For several decades, the Securities and Exchange Commission routinely has sought and obtained from the federal courts orders directing defendants to return the ill-gotten gains of their securities law violations.  Such disgorgement recoveries have become a billion dollar industry for the SEC.  A footnote in Justice Sonia Sotomayor’s recent opinion in Kokesh v. SEC – the agency’s second straight significant loss before the High Court – may foreshadow a view by the Court that disgorgement is not a remedy routinely available to the SEC. read more »

Will the Trump Administration Soften FCPA Enforcement?

In mid-June, a senior prosecutor in the Justice Department drafted a letter to a lawyer for Boston-based construction firm, CDM Smith, laying out her agency’s findings that the company’s employees bribed Indian government officials to win lucrative contracts.

According to the letter, posted online June 30 on the DOJ’s website, CDM Smith employees paid $1.1 million in bribes between 2011 and 2015 in order to win contracts that helped it net $4 million in profits — in violation of the Foreign Corrupt Practices Act, which prohibits bribing foreign government officials.

But instead of bringing charges, the DOJ’s letter informed the company’s lawyer Nathaniel Edmonds, of Paul Hastings, that the investigation would be closed, as long as the company agreed to “disgorge” or give back the illicit $4 million in profits. read more »

RBS to pay $5.5 billion to resolve major U.S. mortgage probe

Royal Bank of Scotland (RBS.L) will pay $5.5 billion to settle one of the two major U.S. investigations into allegations it mis-sold mortgage-backed bonds that it needs to resolve before the British government can sell its shares.

The Edinburgh-based lender on Wednesday said it agreed to settle the lawsuit with the U.S. Federal Housing Finance Agency (FHFA) that accuses it of mis-selling $32 billion of mortgage-backed securities before the global financial crisis.

Analysts had previously estimated RBS would have to pay between $3.5 to $5 billion to settle the case with the FHFA.

"Today's announcement is an important step forward in resolving one of the most significant legacy matters," RBS Chief Executive Ross McEwan said in a statement. read more »

California Man Charged with Leading $20M Real Estate Ponzi Shceme

A California man was arrested last week and is accused of bilking investors out of $20 million by running a real estate Ponzi scheme.

Seth Depiano was arrested in Las Vegas and charged with mail fraud, wire fraud, and money laundering, announced the U.S. Attorney’s Office for the Eastern District of California.

According to court documents, Depiano operated a Ponzi scheme that attracted real estate investors and convince them to give to him and the businesses he controlled, which included The Rental Group, U.S. Funding and Home Services, and Draymond Homes, more than $20 million. read more »