Free Speech, Due Process and Trial by Jury
Led by lawyers in its Fort Worth office, the U.S. Securities and Exchange Commission brought charges Monday against the owners, employees and promoters of a $650 million crypto asset company that the federal agency claims was actually a multi-level marketing scheme that defrauded more than 200,000 investors, including many in Texas.
What will the post-Chevron era look like? The full and future impact of overturning Chevron is unclear, but it is safe to assume that innumerable businesses and industries will be impacted.
Armenian brothers Artyom Khachatryan and Gurgen Khachatryan faced accusations that their multimillion-dollar Beverly Hills mansion was purchased with bribes. Following a two-year investigation, the government announced it had closed the case and reached a settlement with the family to share proceeds from the sale of the luxury estate. The resolution is touted as a significant victory by the brothers’ Dallas lawyer, Ephraim “Fry” Wernick.
In this edition of Litigation Roundup, we look at the lawyers who helped secure recent rulings barring the federal government from regulating horseracing and from enforcing bans on both noncompete agreements and LNG export approvals.
The Texas Data Privacy & Security Act became effective July 1. Along with 17 other states, Texas has now enacted data privacy protections that will require many businesses to comply with new regulations about the collection, use, processing and treatment of personal data. Businesses that operate in Texas should be aware of, and prepared to comply with, the TDPSA immediately. Companies should coordinate with their technology and legal teams to review policies and procedures and ensure their privacy policy, terms and conditions, and other documentation comply with the Texas law and other applicable privacy and cybersecurity regulations to ensure compliance and avoid enforcement actions by the Texas attorney general.
For more than a decade, the U.S. Securities and Exchange Commission has been able to bring enforcement actions in either federal court or the agency’s internal venue. Not anymore. The U.S. Supreme Court issued a pivotal ruling in SEC v. Jarkesy significantly curtailing the SEC’s ability to use its administrative proceedings to impose civil penalties for securities fraud. Instead, these cases must be tried in federal district court, where a defendant’s Seventh Amendment right to a civil jury trial is available. This decision not only alters the landscape for securities fraud enforcement but also signals potential broader implications for the enforcement powers of federal agencies across the government.
Coupled with a series of other recent rulings by the Court, this verdict adds to a body of law with potentially far-reaching implications for the enforcement powers of all federal agencies.
The U.S. Supreme Court’s decision Thursday that defendants in fraud cases have the right to a civil jury trial in cases in which the U.S. Securities and Exchange Commission seeks financial penalties appears to be broad and sweeping but may have only minimal impact on SEC enforcement actions. But legal experts say that the decision could have a significant impact on settlements with the SEC. The SEC’s case against George Jarkesy, a Texas hedge fund manager and conservative radio talk show host, dates back to 2013 when the government claims that Jarkesy defrauded investors by falsely leading them to believe that KPMG was auditing two funds he launched. The SEC brought their case in an administrative proceeding before an SEC-appointed ALJ. The SEC hit Jarkesy and a co-defendant with $300,000 in penalties and ordered Jarkesy’s fund, Patriot28, to disgorge about $685,000 in ill-gotten gains.
Also, click here to see the list of Fifth Circuit cases handled by the Supreme Court this term.
A federal jury in New Jersey found in favor of former sales representatives turned whistleblowers who claimed Janssen Products promoted HIV drugs off-label. All told, the verdict could result in Janssen facing more than $1 billion, one of the largest False Claims Act verdicts, partner Pete Marketos said.
A federal jury in New Jersey found Janssen Products violated the federal False Claims Act by unlawfully promoting Prezista or Intelence. But the jury found Janssen did not violate the Anti-Kickback Statute.
Last fall, the U.S. Securities and Exchange Commission promoted David Fraser to associate regional director for the Fort Worth regional office. Fraser discusses the new role and the challenges and successes he’s had so far in leading enforcement for the FWRO in this Q&A.
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