Posts : 8
Join date : 2010-05-26
|Subject: Everything "We" do is Now Legal! Thu 24 Jun 2010, 8:17 pm|| |
... no more foreign investment in USA.
- Quote :
- National Law Journal Online
Justices limit reach of fraud statutes
June 28, 2010
In four high-impact decisions Thursday, the U.S. Supreme Court significantly limited the scope of federal laws used by prosecutors and plaintiffs in pursuing alleged corporate fraud.
In the post-Enron case of Skilling v. U.S. and the related cases of media mogul Conrad Black and Alaska legislator Bruce Weyhrauch, the high court re-defined the "honest services" criminal fraud statute to cover only bribes and kickbacks, instead of the range of illicit activities prosecutors have used the law to punish.
"There are many things that are no longer criminal today," said Proskauer Rose appellate co-head and former federal prosecutor Mark Harris. "It is going to be much harder to prosecute in the farthest reaches of fraud."
On the civil side, the Court also ruled in Morrison v. National Australia Bank that securities fraud class actions involving foreign investors and foreign firms cannot be filed in U.S. courts unless shares were sold or purchased within the United States. The bright-line rule replaced broader "conduct" and "effects" tests that let in foreign disputes that had more remote connections to U.S. soil.
"Simplicity and certainty are good for business, and will facilitate decision-making by companies considering investing in or operating in the United States," said Hughes Hubbard & Reed partner Sarah Cave.
Taken together, Mayer Brown partner Andrew Pincus said, "If there is any overarching message in these four decisions, it is that the Court is applying some rules of thumb in interpreting statutes, and if Congress wants to go beyond that interpretation, it must be clear."
But critics slammed the honest services fraud rulings, in particular, as another sign of the pro-corporation tilt of the Roberts Court. Said Sen. Patrick Leahy (D-Vt.), "The Court has once again disregarded the will of Congress and undermined efforts to protect Americans from abuses by powerful corporate and political interests."
Daniel Petrocelli, the O'Melveny & Myers Los Angeles partner representing the victorious former Enron executive Jeffrey Skilling, said Thursday afternoon that the unanimous ruling was "fatal to the government's case," including the other 19 counts on which Skilling was convicted. The Court in its ruling, however, left it to the lower courts on remand to decide the impact of the decision on his case. Skilling, convicted in 2006, is serving a 24-year sentence that is in the process of being reduced on other grounds.
Black's lawyer, Gibson, Dunn & Crutcher Washington partner Miguel Estrada, said the ruling affects his client's entire case. "We are confident the lower courts will quickly conclude that the errors that the Supreme Court has now conclusively found tainted every aspect of this case," said Estrada in a statement. "We look forward to helping Mr. Black regain his freedom." Convicted in 2007, Black is serving a 6-year sentence.
The ruling could also re-open many other fraud cases, said Vinson & Elkins appellate head John Elwood, allowing "previously convicted persons who were prosecuted under now-invalid theories of 'honest services' fraud to file federal habeas corpus petitions challenging their convictions under Skilling."
The fraud rulings came on a busy day at the high court. The justices issued seven decisions, comprising 286 pages, in their push to wrap up the current term. After justices read from their opinions from the bench, Chief Justice John Roberts Jr. announced that next Monday would be the final decision day of the term. Four decisions remain, including the long-awaited Bilski v. Kappos patent case, and McDonald v. Chicago, on the application of the Second Amendment to local and state firearms regulations.
The three honest-services fraud cases were announced by Justice Ruth Bader Ginsburg, and represent something of a middle course. After oral arguments in the cases, many believed the Court would toss out the law altogether as unconstitutionally vague, but only justices Antonin Scalia, Clarence Thomas and Anthony Kennedy ended up adopting the approach.
Instead, Ginsburg in effect rescued the law by re-interpreting it — which Scalia criticized as "not interpretation but invention." But Ginsburg said the Court's longtime practice has been to see whether the law is "amenable to a limiting construction" before tossing it out as vague. Bribery and kickbacks were the traditional targets of federal anti-fraud law, she said, until Congress amended it in 1988 to include "the intangible right of honest services."
In a lengthy section of the decision, Ginsburg rejected another claim made by Skilling — namely, that the climate of Houston after Enron's collapse should have made it presumptively ineligible as a venue for Skilling's trial because of jury prejudice.
Ginsburg said that, in a city the size of Houston, "any suggestion that 12 impartial individuals could not be impaneled in Houston is hard to sustain." She also noted that the jury acquitted Skilling on nine of the counts, making it difficult to presume that jurors were biased against Skilling.
On the jury-prejudice aspect of the case, Justice Sonia Sotomayor, a former federal trial judge, dissented, joined by justices John Paul Stevens and Stephen Breyer. She said she was doubtful that Skilling's jury was "indeed free from the deep-seated animosity that pervaded the community at large."
Sidley Austin partner Jeffrey Green, who wrote a brief in the case siding with Skilling on jury prejudice, said, "It is disconcerting to see the majority working so hard to demonstrate that the prudent course — a venue transfer — was not the better choice, especially when the only justice who has experience both as a district judge and with voir dire in high-profile cases is pointing out just how wrong things went in Mr. Skilling's trial."
The foreign securities fraud case was also closely watched in light of the growing trend of foreign investors resorting to U.S. courts to pursue securities fraud claims against foreign firms. The case before the Court was brought by Australian investors against National Australia Bank, claiming they were harmed by frauds committed by executives of an American subsidiary of the bank.
That was not enough of a connection to upset the presumption against extraterritorial application of U.S. laws, said Justice Antonin Scalia for an 8-0 Court. Sotomayor, who was on the U.S. Court of Appeals for the 2d Circuit when it ruled on the case, did not participate. Scalia rejected the government's argument that excluding such cases from U.S. courts would turn the United States into a "Barbary Coast" haven for foreign fraudsters.
"While there is no reason to believe that the United States has become the Barbary Coast for those perpetrating frauds on foreign securities markets," Scalia wrote, "some fear that it has become the Shangri-La of class-action litigators for lawyers representing those allegedly cheated in foreign securities markets."
Tony Mauro can be contacted at email@example.com.
I get it. the US is being bankrupted and devalued to be bought up the same way the USSR was sold by the gov for nuthin!
Posts : 1360
Join date : 2009-10-20
|Subject: Re: Everything "We" do is Now Legal! Thu 24 Jun 2010, 8:53 pm|| |
Funny how they feel impelled to wrap their immorality with trappings of legality. The psychology of this is quite fascinating. Illusion is everything in the minds of these demented ones, but unbeknownst to them, there really is a Reality that may bite them REALLY badly. (I think Nature may resent their behavior very much, somewhere along the way..)
It's certainly getting very bizarre.....
P.S. Welcome to the forum!
Posts : 79
Join date : 2010-05-21
|Subject: Re: Everything "We" do is Now Legal! || |