A former clerk of an international law firm pled guilty to insider trading last week. According to Justice.gov the clerk obtained confidential insider information (also known as “material nonpublic information”) related to mergers, acquisitions and stock purchases and used it to profit on his personal transactions. He is also alleged to have passed this insider information to bankers who personally profited from this information as well.
The ex-law clerk was not involved with the transactions on behalf of the firm. Rather, he apparently accessed the information through the firm’s computer network by performing organic searches on topics such as “merger agreement,” “bid letter,” “engagement letter,” and “due diligence.”
According to the FBI by October 2013, the clerk made profits of about $168,000 on 13 planned corporate transactions. In March he was charged with security fraud and conspiracy. In September he rejected a previous plea offer. He now faces the possibility of 20 years in prison and a $5 million fine for the security fraud charge, along with an additional five years in prison and a $250,000 fine for the conspiracy charge.
The other two conspirators are awaiting sentencing after pleading guilty, one of whom has been ordered to pay back bonuses he received of close to $3 million.
Although there has been a great deal of discussion about insider trading law recently due to a new case out of the Second Circuit, nbsp; link, it appears that those issues were not present in this case.
At Cheshire Parker Schneider & Bryan our Raleigh federal criminal defense attorneys represent anyone charged with insider trading or other fraud offenses. If you or a loved one are facing such charges, call us for a free consultation today.
The aptly labeled crime 18 U.S.C. § 666 creates a federal crime out of certain acts of state government bribery (as well as embezzlement from certain state government and non-profit entities).
The distinguishing characteristic of the offense that allows it to be charged as a federal crime is that the crime must involve an entity that received “benefits in excess of $10,000” within one year of the offense conduct.
Due to the pervasive involvement, through grants and other spending, of the federal government in the financing of state and local governments, courts have long struggled with the coverage of § 666. For example, the Supreme Court has dealt with this issue on at least three occasions: Salinas v. United States, 522 U.S. 52, 57 (1997); Fischer v. United States, 529 U.S. 667 (2000); and Sabri v. United States, 541 U.S. 600, 606 (2004).
Last week, the Eleventh Circuit Court of Appeals weighed in, overturning a federal bribery conviction under § 666 of a city councilman in Florida who was caught accepting bribes because the government did not prove that the city received benefits in excess of $10,000. Full opinion US v. McLean -11th Circuit 2014 – Full Text.
At the outset, the court was “mindful that the Supreme Court recently cautioned against federal criminal statutes being read too expansively.” (Citing Yates v. United States, 135 S. Ct. 1074 (2015) (concluding the term “tangible object” defined within the Sarbanes-Oxley Act of 2002, legislation designed to restore confidence in financial markets, did not apply to the undersized red grouper that a commercial fishing vessel’s captain threw overboard)).
The court then applied a test fashioned from a prior case that required the government to provide sufficient detail about the particular local government program that the federal government allegedly funded in excess of $10,000 to allow the court to determine whether the program constituted a federal benefit.
The court found that the government’s evidence did not provide sufficient detail regarding the alleged federal benefits received by the city and therefore overturned the city councilman’s conviction.
The overarching concern the judges appeared to have been federal involvement in state crimes, particularly because (contrary to current practice) there is no generalized federal police power. The Supreme Court shares this concern, as exemplified in US v. Bond, decided in 2014, which overturned a woman’s conviction for utilizing a “chemical weapon” when she surreptitiously placed mildly toxic chemicals on a romantic rival’s door handle causing a minor rash. The Court specifically determined that it “can insist on a clear indication that Congress meant to reach purely local crimes, before interpreting the statute’s expansive language in a way that intrudes on the police power of the States.”
These cases, McLean and Bond, both show an attempt to curb the expansion of federal policing into state and local offenses in response to the over-federalization of law enforcement in this country, a topic wonderfully covered by lawyer Harvey Silvergate in his book Three Felonies a Day.
For Raleigh federal criminal defense attorneys, these rulings are important to be aware of since they suggest that courts will be less willing to endorse the expansion of the federal police power.
At Cheshire Parker we represent people under investigation or charged with federal crimes. To discuss your case and your legal options for defense, contact one of our Raleigh federal criminal defense attorneys at CPSB today.
A federal District Court Judge in Pennsylvania applied the doctrine known as “Act of Production Immunity” to prohibit the U.S. Securities and Exchange Commission (SEC) from forcing defendants accused of insider trading to disclose the passcodes necessary for the government to access their phones.
Act of Production Immunity is an outgrowth of the Fifth Amendment right against self-incrimination. Under it, a defendant cannot be required to disclose the contents of their mind, even if doing so is not by itself incriminating, but may lead to the government discovering incriminating evidence.
Importantly, the court found that the passcodes were not corporate records, even though the smartphones themselves were property of the defendants’ employer.
The full opinion from SEC v. Huang et al is available here: US v. Huang et al – Opinion.
This opinion is another win for privacy in the technological age. The 11th Circuit Court of Appeals in 2012 prohibited the government from forcing a defendant to decrypt his computer hard drive. In both that case and Huang, the court determined that the government did not have particularized knowledge of the contents of the encrypted device to be able to access the device under the “foregone conclusion” exception to Act of Production Immunity.
Under the foregone conclusion case law, the act of providing access to a certain device (or safe or other private space) is not “testimonial” under the Fifth Amendment if the government can show with “reasonable particularity,” “at the time it sought to compel the act of production, it already knew of the materials” being sought, which would make any testimonial aspect of providing access to the device a “foregone conclusion.” This exception has the potential to swallow the rule, so privacy advocates should take heart that judges have required the government to have specific knowledge of the item(s) it seeks access to in order to avail itself of the foregone conclusion exception.
The Fourth Circuit also recently enhanced the protections of individual privacy in its opinion US v. Graham – Opinion. In that case, the court determined that the government must obtain a warrant before reviewing historical cell-site location records (records that show approximately where a cell phone has been), at least when reviewing the records for an “extensive” 221 day period. (See Orin Kerr’s discussion of the case at WaPo: Fourth Circuit adopts mosaic theory, holds that obtaining “extended” cell-site records requires a warrant.)
Each of these cases show courts attempting to apply the Constitution to new technologies, and each of the rulings have important implications for Raleigh criminal defense attorneys in their attempts to protect the privacy of their clients. If you are being asked to disclose your computer password or cell phone passcode to police, call a criminal defense attorney.
As you and your significant other begin to discuss marriage, you may not have thought much about your social media presence beyond the relationship status update on your Facebook page or the name change on your Twitter account.
If you and your partner-to-be are negotiating a Premarital Agreement, you may not have discussed whether social media accounts and online sharing should be included in your Premarital Agreement but it’s a topic that you should consider.
Social networking clauses are becoming increasingly popular in premarital agreements as more and more couples try to protect their online reputation and right to privacy. One partner may be a “share everything” type of person, while the other is more private. In some cases, a spouse’s career may be jeopardized because of careless or provocative pictures, tweets, or posts. It is important that you consider how using social media will intersect with sharing your life with someone.
What Can You Limit?
A social media clause can include limitations about images and information that each spouse can post online about the other. Prohibited actions may include limits about online photos of the children; images of the couple at parties; or images of a spouse smoking.
Provisions in the Premarital Agreement could include rules for tagging the other spouse, or requirements that all settings be at the highest privacy setting, or requirements for access by invitation only.
The restrictions on social media use must be as detailed as possible and should include references to the harm that is intended to be prevented. Without the detail and connection to potential harm, these clauses run the risk of being violations of free speech, contrary to public policy, and unenforceable.
The penalties for violation can vary depending on how the couple wants to handle a breach. Penalties can also vary depending on whether the violation occurred during the marriage or after separation.
Social Media and Divorce
If you and your spouse separate, you should be wary of what you post online regardless of whether there is a social media clause in your Premarital Agreement or regardless of whether you have a Premarital Agreement. Online pictures, videos, blogs, chats, and posts can be used against you and you may find yourself eating your very words.
A social media clause in a Premarital Agreement can cause a spouse to have second thoughts before uploading a bevy of images or making a careless post or comment that has unintended but real harm. You can help protect your own reputation, professional interests, and personal relationships though discussions with your soon-to-be-spouse about the boundaries of social media use and use of a Premarital Agreement to clarify the rules.
At Cheshire Parker Schneider & Bryan, our Raleigh Family Law attorneys represent anyone who is about to be married and who is considering entering into a Premarital Agreement. For more information regarding social media and online protection, contact a CPSB lawyer today.
Parents have a legal responsibility to provide financial support to their children until they turn 18 and are considered legal adults. In a stable, two-parent home environment, both parents have the opportunity to contribute to that support from the moment of conception, no matter what the family situation is or who the breadwinner may be. For divorced families, North Carolina has established child support laws to regulate how this financial support is divided.
But in some cases, parents may have divorced before their child was born, or they may not have been married in the first place. Both scenarios leave parents facing situations where one of them (usually the mother) is shouldering the financial responsibilities during pregnancy. In such cases, should the mother be receiving child support during her pregnancy and before the child is born? Here, the child support laws get a little more complex.
In some states, the laws have provided for such scenarios, making it a requirement that both parents must support their unborn child. A father can be made to provide child support to a pregnant mother throughout the pregnancy. However, in order to mandate child support obligations, the court must have proof of paternity.
The paternity can be established by presumption in a likely scenario (husband and wife, for example), court order, a paternity test, or even a father’s acknowledgement, but these methods can be disputed in court, dragging out the process of establishing financial responsibility. Paternity tests also pose a problem because they may present a threat to an unborn baby’s health.
If paternity is not established, a mother cannot receive child support throughout her pregnancy and must wait until the child is born. Then, paternity can be established through testing and the courts can make a determination on child support responsibilities for both parents.
North Carolina Laws
The state of North Carolina does not require fathers to pay child support until the child is born; so throughout a mother’s pregnancy, she is responsible for all financial burdens including medical care and expenses related to childbirth. The father does not have a legal obligation to provide any financial contribution, unless he wants to do so.
North Carolina does provide a way for a mother to receive reimbursement for some of the medical expenses related to child birth. This is done through a legal claim, and it is important for the mother to keep detailed records of all expenses, bills and receipts so the other parent can contribute. However, a reimbursement claim cannot include any expenses for the mother’s prenatal care.
Call a Lawyer Today
At Cheshire, Parker, Schneider, and Bryan, a North Carolina law firm, we help parents determine how they will handle care of their children, especially if they are divorced or separated. We offer legal counsel on custody and child support issues. For more information regarding North Carolina’s laws and requirements, contact one of the Raleigh family attorneys at CPSB for a consultation today.
Last year, the North Carolina Bar Association (NCBA) published a complete history of the NCBA’s Family Law Section from 1980 to 2013. This publication was a joint effort between Tharrington Smith attorney Lynn P. Burleson, and our own team member, Amy L. Britt. Ms. Britt, a partner with CPSB, provided the history for the decade spanning from 2003 to 2013, while Mr. Burleson worked on the earlier years.
The History of the Family Law Section of the NCBA provides a look into the Section’s influence on the development of North Carolina’s family law legislation over time. The history describes the Section’s position on specific legislation, and how the efforts of Section members have impacted the state’s current family law statutes. The History also provides a membership report, a list of continuing legal education seminars sponsored by the Section, and a list of officers and council members.
Family Law Section
The NCBA Family Law Section is a professional membership association for family lawyers who work in North Carolina. The Section’s efforts lie in promoting improvements to existing state laws and programs for family law through pro bono legal services, legal education, practice guides, mentoring programs, and legislative changes. The Family Law Section provides continuing education programs for lawyers, with seminars on child custody, child support, alimony and equitable distribution. The Section also publishes the NCBA “Family Forum” newsletter for its members and helps mold the legislative agenda for presentation to the General Assembly.
Ms. Britt was admitted to the North Carolina Bar in August 2005, and since then, she has dedicated herself exclusively to the practice of family law in Wake County and Raleigh. She has successfully worked with clients who are going through the process of divorce and separation, and she has considerable experience in handling child custody, support, alimony, and equitable distribution cases. Ms. Britt also handles domestic violence cases, and prepares premarital agreements, property settlement agreements, and domestic relations orders for parties.
Ms. Britt is licensed to practice law in the U.S. District Court in the Eastern District of North Carolina, and she has lived and worked in Raleigh since 2005, giving her unique insight into the local court systems.
The attorneys at Cheshire, Parker, Schneider & Bryan are proud of Ms. Britt’s efforts and dedication to this project and the important work she did in providing the state with an updated History of the Family Law Section of the NCBA. Like Ms. Britt, all of our team members strive to involve themselves in efforts that will help the legal community and the local community. CPSB is a leading law firm in Raleigh, NC, and our Raleigh family lawyers are dedicated to providing high-quality legal services to clients.
Here’s a reprint of a post from Campbell Law School – LINK.
Nelson to receive Cheshire Schneider Advocacy Scholarship
RALEIGH, N.C. – Incoming first-year student Terrie Nelson has been selected to receive the Cheshire Schneider Advocacy Scholarship from Campbell Law School. The award is one of three highly prestigious, full-tuition awards.
In keeping with Campbell Law’s mission to educate and develop vigorous advocates for championing and defending individual liberties and justice for all, Campbell Law annually offers the Cheshire Schneider Advocacy Scholarship to one incoming law student who has achieved demonstrable success in advocacy programs such as debate or mock trial during high school and/or college experiences. Initially established as the Excellence in Advocacy Scholarship, the award was re-named in honor of prominent Raleigh attorneys Joseph Cheshire, V and Alan Schneider of Cheshire Parker Schneider & Bryan in December 2014 following an anonymous $100,000 gift to the law school in their honor.
“I fully recognize that not everyone has the privilege to attend law school, but everyone should have the opportunity to be fairly and fervently represented in our court system,” said Nelson. “I am honored to receive the Cheshire Schneider Advocacy Scholarship and to have been selected to attend one of the most prestigious law schools in the state, and with the opportunity that has been afforded to me, it is my aim to become a skilled advocate so that I may better serve others.”
A native of Hampton, Virginia, Nelson holds undergraduate and master’s degrees from the University of North Carolina – Wilmington (UNCW). As an undergraduate student she received the Rachel Freeman Service Leadership Award and the Senior Medallion Award. During her graduate studies Nelson served terms as president and vice president of the UNCW Conflict Management & Resolution Graduate Student Association, and as treasurer of the UNCW Graduate Student Association. Nelson has worked as a victim witness legal assistant in the New Hanover and Pender County district attorney’s office, and has volunteered in the community at Pender County Christian Services and with Pender County Teen Court.
An internal search committee comprised of advocacy experience from within the Campbell Law community interviewed an impressive slate of finalists and ultimately selected Nelson for the award. Campbell Law Assistant Professor of Law and Director of Advocacy Dan Tilly steered the committee alongside namesakes Cheshire and Schneider.
“It would be difficult to find a better person to receive the first Cheshire Schneider Advocacy Scholarship,” said Cheshire. “Terri’s entire life has been one of hard work and personal accomplishment while using advocacy and personal dedication to positively affect other people’s lives. She embodies what this scholarship is supposed to nurture and I could not be happier that she will be its first recipient.”
ABOUT CAMPBELL LAW:
Since its founding in 1976, Campbell Law School has developed lawyers who possess moral conviction, social compassion and professional competence, and who view the law as a calling to serve others. The school has been recognized by the American Bar Association (ABA) as having the nation’s top Professionalism Program and by the American Academy of Trial Lawyers for having the nation’s best Trial Advocacy Program. Campbell Law boasts more than 3,650 alumni, including more than 2,500 who reside and work in North Carolina. In September 2009, Campbell Law relocated to a state-of-the-art building in downtown Raleigh. For more
A family business can be a great way to balance responsibilities, ensure quality time with your children and keep your family prospering financially. When your business partner is also your life partner it is often easier to handle complications. When the marriage frays the family business is impacted.
The family business is usually marital property or part-marital property. When a couple separates, the marital property is divided in “equitable distribution.” The company presents a challenge since most businesses can’t be divided into two parts.
Most often, one spouse retains the business asset and pays the other spouse for his or her share of the marital portion. The valuation of business ownership can be extraordinarily complex involving appraisals and specialized consultants. It can also be a straightforward determination of book value. Once a determination is made about the company’s marital value, structuring a pay-out occurs. Factors to consider when structuring pay-outs include ability to pay, operating capital, work-in-progress, accounts receivable, cash flow, forecasts, installment agreements, security instruments, offsets by using other marital assets, and many other factors.
Another option for a divorcing couple is to share the business as joint owners. Written Operating Agreements can be negotiated that specify the role of each spouse along with terms relating to management, oversight, compensation and other financial matters. This option is challenging but some couples do manage to successfully co-manage the family business.
Being the Outsider
A troublesome consequence of a family business and divorce occurs when one spouse becomes unemployed as a result of the marital separation. This fact can occur in small family businesses as well as large complex organizations. Alimony and child support payments are impacted when a spouse is no longer earning a salary or receiving benefits from the family business.
Valuing and dividing a family business takes experienced, competent, legal advice from lawyers who have tackled these complex issues before. The family lawyers at Cheshire Parker Schneider & Bryan have the experience and legal know-how that is needed when a family business is involved.
In a Letter to the Editor in today’s Raleigh News & Observer, Joe Cheshire and I note a glaring omission from North Carolina Chief Justice Mark Martin’s recent State of the Judiciary address to the North Carolina General Assembly. “There comes a time when leadership demands subordinating political considerations to do what’s right.” Read more here.
James Comey, the Director of the FBI, spoke on the issue of biases of law enforcement (and all Americans) at Georgetown University recently. His comments are refreshingly candid. He began by explaining that law enforcement has a legacy of racism. For example, the nickname “paddy wagon” comes from law enforcement’s bias against Irish immigrants “as drunks, ruffians, and criminals.” Although “[t]he Irish had tough times,” he continued, “[their experience] little compares to the experience on our soil of black Americans.”
Comey then noted that “[m]uch research points to the widespread existence of unconscious bias.” He then quoted the Broadway hit, Avenue Q:
Look around an you will find,
No one’s really color blind.
Maybe it’s a fact
We all should face
Everyone makes judgments
Based on race.
His talk then turned to the specific affect of such “unconscious bias” on law enforcement officers, saying, “something happens to people in law enforcement. [They] develop different flavors of cynicism . . . , lazy mental shortcuts. For example, [they come to believe that] criminal suspects routinely lie . . . , and the people [they] charge are overwhelmingly guilty. That makes it easy for folks in law enforcement to assume that everybody is lying and that no suspect . . . could be innocent. Easy, but wrong.”
As for race, he recognized that the same type of cynicism develops in police officers who “work in environments where a hugely disproportionate percentage of street crime is committed by young men of color. . . . After years of police work, officers often can’t help but be influenced[by unconscious bias.]”
He then explicitly acknowledged the developed racial bias of officers working in urban areas, saying, “A mental shortcut becomes almost irresistible . . . . The two young black men on one side of the street look like so many others the officer has locked up. Two young white men on the other side of the street–even in the same clothes–do not. The officer does not make the same association about the two white guys . . . , [a]nd that drives different behavior.”
After acknowledging what we’ve all known, he moves on to discuss how he sees law enforcement moving forward despite these “latent biases.” He says that law enforcement “must . . . [try to know] what it feels like to be a law-abiding young black man walking on the street and encountering law enforcement. . . . We must resist the lazy shortcuts of cynicism [i.e. the assumption that he is a liar and criminal] and approach him with respect and decency.” This is obvious, but instructive. “We must work . . . to really see each other. Perhaps the reason we struggle as a nation is because we’ve come to see only what we represent, at face value, instead of who we are. We[, law enforcement,] simply must see the people we serve,” he says.
We have spent the 150 years since Lincoln [ ] making great progress, but along the way treating a whole lot of people of color poorly. And law enforcement was often part of that poor treatment. That’s our inheritance as law enforcement and its not all in the distant past. [Law enforcement] . . . must confront the biases that are inescapable parts of the human condition. We must speak the truth about our shortcomings as law enforcement, and fight to be better.
FBI Director Comey’s speech was refreshing in its honesty. Recognition is the first step toward reaching a solution. And for too long, racial bias has been an off limits topic. The statistics show that black men are discriminated against by the criminal justice system. Now the top official at the FBI, our nation’s premier investigative agency, has recognized that the racial bias of police officers has been one of the causes of this discrimination.
We certainly have a long way to go. But this is an important first step.