Although the number of white collar crime prosecutions has been steadily declining across the United States over the past five years, activity in the Southern District of New York (SDNY) has been increasing. In 2017, there were 5,825 prosecutions nationally, down 25 percent from 2012. Meanwhile, the number of prosecutions in the SDNY jumped from 279 to 407, an increase of 46 percent. The SDNY has ranked first in white collar crime prosecutions per capita for the past three years.
This increased activity is in part a result of the continued focus by the U.S. Attorney’s Office in the SDNY on aggressively investigating and charging insider trading cases. Across the river in Brooklyn, the U.S. Attorney’s Office in the Eastern District has also continued to bring white collar cases, winning high-profile trial convictions this past year in cases against two international soccer executives and pharmaceutical investor Martin Shkreli.
At the same time, recent Department of Justice (DOJ) policy initiatives have refocused prosecutors nationally on bringing charges against individual employees, rather than simply seeking financial penalties and compliance reforms from corporations accused of wrongdoing. In 2015, then-Deputy Attorney General Sally Q. Yates issued a memo, “Individual Accountability for Corporate Wrongdoing,” making it clear that the DOJ was focused on individuals and would consider the provision of information about the culpability of individual employees part of a company’s cooperation. Speaking at a conference in April 2017, Attorney General Jeff Sessions reiterated the “Yates memo” guidance, saying, “The Department of Justice will continue to emphasize the importance of holding individuals accountable for corporate misconduct.” Relatedly, in November 2017, Deputy Attorney General Rod J. Rosenstein announced a new enforcement policy for the Foreign Corrupt Practices Act (FCPA) that incentivizes companies to self-report misconduct, which should help prosecutors build cases against individual employees. In March 2018, the DOJ announced nonbinding guidance that will apply the FCPA policy to all criminal cases.
Kramer Levin’s White Collar Defense and Investigations practice is thriving in this environment. In addition to representing large financial institutions, corporations and board special committees, we continue to represent executives and other individuals in the nation’s most significant white collar investigations and prosecutions. In the past 18 months, our clients have included New York Mayor Bill de Blasio, professional gambler and philanthropist William “Bill” Walters, FIFA Secretary General Jérôme Valcke, former McKinsey managing director and Goldman Sachs board member Rajat K. Gupta, Deerfield Management partner and analyst Theodore Huber, executives and engineers of automobile manufacturers, and senior executives and traders at major investment banks.