1. Enforcement recap:
    1. 12/3/15—Attorney General Loretta Lynch announced DOJ collections for Fiscal Year 2015: Attorney General Lynch announced that the DOJ collected an overall $23.1 billion from civil and criminal enforcement actions and resolutions in the fiscal year ended 9/30/15.
    2. 12/23/15—Ukrainian national extradited from Poland to face charges related to $10 million cyber money laundering operation:Viktor Chostak, 34, of Ukraine, along with three other individuals, was charged in a 25-count indictment with money laundering, transporting stolen property, aggravated identity theft and conspiracy to commit money laundering, computer fraud, transportation of stolen property and access device fraud.
    3. 12/21/15—Former trader at Royal Bank of Scotland pleaded guilty in Connecticut district court to conspiracy to commit securities fraud:Adam Siegal waived his right to indictment and agreed to cooperate. Siegal admitted to conspiring to increase the bank's profits by lying to customers about the prices of securities.
    4. 12/17/15—Reviled hedge fund manager and drug company CEO Martin Shkreli arrested for securities fraud: Shkreli, who as CEO of Turing Pharmaceuticals recently raised the cost of a life-saving pill from $13.50 to $750, was accused in an unrelated case of illegally taking stock from a biotech company he founded to pay off debts from other business transactions.
    5. 12/16/15—N.Y. state court of appeals agreed to hear appeal of a lower court's ruling that Facebook lacks standing to challenge search warrants seeking information on 381 of its account holders: The N.Y. state court of appeals announced that it would hear the appeal in Matter of 381 Search Warrants Directed to Facebook v. New York County District Attorney's Office. Facebook is challenging search warrants issued by the Manhattan District Attorney in connection with a Social Security fraud investigation, and the lower court had ruled that Facebook lacks standing to challenge the warrants.
    6. 12/1/15—SEC charged Bitcoin mining companies with conducting a Ponzi scheme to defraud investors: The SEC announced that it had filed a complaint in Connecticut district court against two digital Bitcoin "mining" companies, GAW Miners and ZenMiner, and their founder for allegedly perpetrating a fraud on investors by offering them the opportunity to buy shares in a digital Bitcoin "mining" operation via a Ponzi scheme.
    7. 11/24/15—DOJ announced that five individuals, including two doctors, were charged in kickback schemes involving nearly $600 million in fraudulent claims by Southern California hospitals: The DOJ announced that, in a series of related cases spanning an eight-year period, the former CFO of a Long Beach, California, hospital, two orthopedic surgeons and two other individuals were charged in a "long-running" healthcare fraud scheme that illegally referred thousands of patients for spinal surgeries and generated nearly $600 million in fraudulent billings.
  2. District courts in Tennessee and California extend the "where to whistle" split (update to our October 2015 newsletter article "Do You Have to Whistle to the SEC to Get Protection Under Dodd-Frank? The Second Circuit Says No, Splits With Fifth Circuit"):
    1. 12/8/15—An E.D. Tennessee judge in Verble v. Morgan Stanley Smith Barney, LLC sided with the Fifth Circuit in Asadi and held that Dodd-Frank whistleblowers must "whistle" to the SEC in order to have standing to bring suit under the act.
    2. 11/21/15—An N.D. California magistrate judge in Wadler v. Bio-Rad Laboratories denied Bio-Rad's motion for interlocutory appeal to the Ninth Circuit. Bio-Rad had sought the interlocutory appeal in response to the judge's ruling on 10/23/15 that the former general counsel whistleblower could proceed with his suit under Dodd-Frank even though he did not "whistle" to the SEC. The judge specifically cited to and rejected the Fifth Circuit's Asadi opinion in his ruling. The judge also ruled that the "context and broad purpose" of the Sarbanes-Oxley Act of 2002 supports the conclusion that a director may be held individually liable as an "agent" under that Act and thus the whistleblower could proceed with his claims for retaliatory termination against Bio-Rad's board.
    3. Other SEC whistleblower news: On 12/11/15, an unnamed whistleblower—who "tipped" the SEC about alleged wrongdoing at a "well-known" corporation in 2011 and still has not yet heard back from the SEC about whether the tip qualifies for a monetary award—filed a "first of its kind" petition with the D.C. Circuit seeking to compel the SEC to make the award determination within 60 days.
  3. Challenges to SEC ALJ administrative hearings (update to our April, June and October 2015 ongoing series of "Wherefore Art Thou Due Process" articles):
    1. 12/2/15—Former SEC Commissioner Joseph Grundfest testified before the House Financial Services Subcommittee on Capital Markets that the SEC faces a "crisis of confidence" over its in-house administrative proceedings: Grundfest also testified that there were "fundamental issues of fairness" raised by the SEC's increasing use of its five administrative law judges, including for "serious" cases. Grundfest's testimony was given in connection with the "Due Process Restoration Act of 2015" introduced by subcommittee head U.S. Rep. Scott Garrett (R-NJ) on 10/22/15. The bill would give targets of SEC investigations the right to terminate any SEC ALJ proceeding and move the case to federal court; and, for those that choose to proceed with the SEC in-house proceeding, the government's burden of proof would be increased.
    2. 11/5/15—Bebo v. SEC: The Seventh Circuit denied plaintiff Bebo's motion for rehearing en banc.