Our last post introduced the four big categories that experts believe will dominate white collar crime developments in the upcoming year. These broad categories include LIBOR manipulation cases (discussed in the previous post), corruption and bribery, insider trading, and misconduct by rogue traders.
Corruption has always existed in the business world and many managers have faced federal criminal cases under statutes like the United States' Foreign Corrupt Practices Act. While 2012 saw a number of medical companies encountering criminal penalties for engaging in bribery, attempting to use corruption in a contract with the federal government can also result in aggressive prosecutions.
2013 may be the year in which the government takes its first steps to prosecute the extraordinarily successful Steven Cohen for insider trading. Cohen and his hedge fund, SAC Capital, have attracted the DOJ's attention for years and prosecutors brought an insider trading case against one of his employees in 2011. Based on those allegations, Cohen may also face an insider trading case in the near future.
Finally, rogue trading is a final area that will probably continue to receive attention in 2013. Rogue trading involves unauthorized and generally risky trades - while investment banks are often happy to reap the rewards when they pay off, the same managers turn on traders when trades bring losses.
This might seem like a completely private business in which a company takes responsibility for its employees' behavior. However, as the prosecution of former UBS trader Kweku Adoboli showed in 2012, governments do pursue criminal cases against individual traders. In that case, evidence of intentional wrongdoings were important - that evidence might not be as readily available in other alleged rogue trading incidents.
As the new year begins to unfold, businessmen and investors around the nation will continue to fall under investigation. For these new defendants, an experienced white collar defense lawyer could make all the difference for 2013.
Source: The New York Times, "Looking Ahead to Civil and Criminal Cases to Come," Peter J. Henning, Dec. 31, 2012