From the Bench

Federal Circuit Rules that ITC Lacks Regulatory Power Over Digital Imports

By Whitney Florian, J.D. Candidate 2017 | Posted on

On November 10, 2015, the Federal Circuit ruled in ClearCorrect Operating, LLC v. ITC (“ClearCorrect”) that the U.S. International Trade Commission (“ITC”) does not have jurisdiction to regulate digital data imports. The court held that the ITC’s regulatory power is limited to “material things,” and electronically transmitted digital data is not a “tangible good.”

The decision overturned the ITC’s April 2014 finding that ClearCorrect was barred from importing data sets converted from scanned models of patients’ teeth. The ITC had found that ClearCorrect infringed seven of Align Technology’s patents by using the data sets to create dental aligners, a method to reposition teeth, via 3D printing.

The appeals court explained that Section 337 of the Tariff Act of 1930 was enacted to stop the importation of articles involved in unfair trade practices. “Articles” was defined by the court as tangible, “material things,” which do not include non-physical articles such as electronic transmissions of data sets.

(more…)

In The Peak Of A Hedge Fund Asset Crisis, The Supreme Court Might Have Just “Broke The Camel’s Back” For Investor Confidence In Hedge Funds

By Alvaro Pereira, L.L.M. Candidate 2016 | Posted on

The Supreme Court rejected the petition for certiorari in United States v. Newman last month—a case about insider trading. In so doing it reaffirmed the Second Circuit Court of Appeals’ decision, which held that liability for insider trading requires proof of (1) that the discloser received a personal benefit, and (2) that the person receiving the information (“tippee”) knew about that benefit. This position not only troubles prosecutors in current insider trading cases and investigations, but is also likely to intensify the current hedge fund asset crisis by calling the credibility of the whole system into question among investors.

In a jury trial in the Southern District of New York, federal prosecutors presented evidence that Todd Newman and Anthony Chiasson (among others) were involved in insider trading. Pursuant to the evidence, it was found that these hedge fund managers received financial information from insiders about Dell and NVIDIA before that information was made available to the public—allowing them to earn millions of dollars in trades during the 2008 fiscal year. Accordingly, they were convicted in 2013 for conspiracy to commit insider trading.

(more…)

SCOTUS to Decide Whether RICO Reaches Overseas

By Kevin Chiu, J.D. Candidate 2018 | Posted on

With a docket already filled with politically charged and highly contentious issues, the U.S. Supreme Court hopes to also address the reach of U.S. law overseas, specifically as it pertains to the Racketeer Influenced and Corrupt Organizations Act. Commonly referred to as RICO, the law was designed to combat organized crime by allowing for the criminal prosecution of “patterns of racketeering activity in an enterprise,” which may include money laundering, bribery, embezzlement, drug trafficking, and a number of other questionable activities.

A few days prior to the start of its new term beginning October 2015, the highest court in the land granted a writ of certiorari to hear the case RJR Nabisco, Inc., et al. v. European Community, et al, in order to resolve the question of whether RICO applies extraterritorially and if so, to what extent.  The petition, filed by counsel at Jones Day representing R.J. Reynolds, questioned the reversing of the lower court’s dismissal of the case in the Eastern District of New York by the sharply divided 2nd U.S. Circuit Court of Appeals Court of Appeals, which held that because the scope of RICO encompassed activities that apply to overseas conduct, claims filed based on these activities can proceed in a U.S. federal court.

(more…)

Madoff’s Accountant Avoids a Prison Term

By Erika K. Solanki, J.D. Candidate 2017 | Posted on

Accountant, David G. Friehling admitted in federal court that he had produced the rubber-stamp audits that allowed Mr. Madoff to conceal his enormous $65 billion Ponzi scheme from regulators for more than two decades. Federal Judge Laura Taylor Swain in Manhattan sentenced Mr. Friehling to only a year of home detention and an additional year of supervised release. This light sentence reflects Mr. Friehling’s extensive cooperation with federal prosecutors.

(more…)

Insider Trading Requirements: Second Circuit Case could have Major Consequences for Prosecutors

By Alexandra Morançais, LL.M. Candidate 2015 | Posted on

In the context of insider trading cases involving tippers, the personal benefit test is most controversial. To hold a tippee liable, prosecutors are required to prove the tippee’s knowledge of the personal benefit of the tipper when revealing the tip. On December 10, 2014, the United States Court of Appeals for the Second Circuit heightened the benefit requirement, which could have a major impact on insider trading cases to come.

(more…)

Puerto Rico District Court Strikes Down Debt Restructuring Law


By John Flynn, J.D. Candidate 2016 | Posted on

Puerto Rico’s recently enacted debt restructuring law was struck down. On February 6, 2015, Judge Francisco Besosa of the United States District Court in Puerto Rico ruled that the law was unconstitutional and enjoined its enforcement.

(more…)

Class Certification in Nexium ‘Pay for Delay’ Litigation Survives Appeal

By Bo Griffith, J.D. Candidate 2016 | Posted on

On January 21, the U.S. Court of Appeals for the First Circuit concluded that a district court did not abuse its discretion in certifying a class of Nexium purchasers in their “pay for delay” claim against the drug’s producer, AstraZeneca. The plaintiff class, made up of Nexium purchasers, asserted a Sherman Act claim against AstraZeneca, arguing the drug company injured consumers by foreclosing generic markets of the heartburn drug.

(more…)

Supreme Court Clarifies Federal Bank Fraud Statute in Loughrin v. United States

By Roxana Guidero, J.D. Candidate 2016 | Posted on

On June 30, 2014, the U.S. Supreme Court issued its final opinions and concluded its 2013-2014 term.  Among the Court’s recently decided cases is Loughrin v. United States, where the Court clarified that Section 1344(2) of the federal bank fraud statute does not require intent to defraud.[i]  The Court’s decision impacts federal bank fraud prosecutions, but may also impact bank compliance personnel and in-house counsel.

(more…)