A dispute in California federal court over whether Google must turn over documents stored overseas in response to a search warrant may have major implications for white collar practitioners and their clients. Last week Google asked a California federal judge to review an order by Magistrate Judge Laurel Beeler that required the company to produce content stored outside the United States in response to a warrant. U.S. District Judge William Alsup will hear Google’s motion for de novo review of the order on June 22. In the order at issue, Judge Beeler denied Google’s motion to quash a warrant issued pursuant to the Stored Communications Act (SCA), 18 U.S.C. § 2703. The SCA, in part, requires the disclosure of customer communications or records by internet service providers pursuant to a warrant. The warrant sought documents related to specific Google email accounts, including subscriber information, evidence of specified crimes, and information about the account holders’ true identities, locations, and assets. Google produced information it stored domestically, but argued that the warrant could not reach information stored abroad. Google argued that its legal team in the United States were the only personnel authorized to access and produce the communications, which could be accessed from within the United States. Matter of Search of Content that is Stored at Premises Controlled by Google, No. 16-MC-80263-LB, 2017 WL 1487625, at *2 (N.D. Cal. Apr. 25, 2017). Continue Reading Blurring The Line Between Foreign and Domestic: The Expansion of Search Warrant Powers Overseas
In January of this year, the Federal Trade Commission (FTC) brought suit against Taiwan-based D-Link Corp. and its U.S. subsidiary, D-Link Systems Inc, in Los Angeles Federal Court, for failing to properly secure its consumer routers and computer cameras. According to the FTC, the devices were billed as containing “advanced network security” but actually left thousands of devices vulnerable to hacking and compromise. The results of this FTC suit could create a de facto security compliance regime for all purveyors in the ever-growing “internet of things.” Continue Reading Is There Fire Where There’s Smoke? The FTC Says Yes
In the present uncertain legal and regulatory environment, the role of shareholder activists in scrutinizing corporate behavior seems to be gaining steam. See, e.g., An Activist Investment in Whole Foods Exposes Shifting Power on Wall St. We are increasingly seeing corporate internal investigations being influenced, if not driven by, the presence of activists on the Board. It remains to be seen whether the role of activists in policing corporate governance and other corporate regulatory issues will continue to increase in an environment where SEC Enforcement is increasingly under pressure (budgetary and otherwise) from the current presidential administration.
Ramapo, New York Town Supervisor Christopher St. Lawrence heads to trial this week on federal securities fraud charges. St. Lawrence is one of two city officials charged in the case; his codefendant N. Aaron Troodler pleaded guilty earlier last month. The SDNY U.S. Attorney’s Office promoted the Troodler conviction as the first time municipal bond fraud has been successfully prosecuted under federal securities laws. The St. Lawrence trial is expected to draw lots of attention; St. Lawrence is an elected official who has spent nearly two decades at the helm of his town. Continue Reading Municipal Bond Securities Fraud Case Heads to Trial
Recent corporate guilty pleas can be expected to have serious implications for the individual executives and employees alleged to have been involved in the conduct under scrutiny. But there are other factors at play in such cases that can make even more of a difference to the eventual outcomes for individuals than whether their corporate employer pleads guilty or pursues an alternative resolution. Key among these is the extent to which a cooperative relationship can be established between company counsel and individual counsel despite accusations of individual wrongdoing.
Read more in our article posted on Law360: Individual Defense in the Shadow of Corporate Guilty Pleas.
After a series of compliance failures leading to the resignation of company’s CEO, the privately-held health care brokerage company Zenefits was just hit with a $7 million dollar settlement by the California Department of Insurance (DIR). The terms of the settlement may reflect a new trend in compliance enforcement, namely that regulators are trading monetary penalties for oversight over privately-held companies. Continue Reading Steep Fines for Company With Compliance Problems, but Recognition of Remediation Efforts May Provide Model Going Forward
The announcement that San Francisco private company Hampton Creek faces an SEC inquiry related to their alleged “buyback” program of vegan mayo comes as no shock. See reporting on Bloomberg. As soon as the facts were initially reported it seemed only a matter of time until the regulators, who have been looking for a poster child (or rather, a whole class of poster children) of private company enforcement in the Bay Area, swooped in. Continue Reading Developments in SEC Private Company Enforcement: Sophisticated VC’s in the Role of Victim
The brightest minds in Silicon Valley work 24/7 to disrupt existing systems and industries. No one can argue that Uber and Lyft haven’t fundamentally altered transportation, that AirBnB hasn’t changed the way we travel, or that Netflix hasn’t rendered brick and mortar video rental stores obsolete. Can those same minds harness the innovative energy of the region to make it easier for regulated industries to comply with state and federal laws? At least one Silicon Valley company thinks so, and is exploring new ways to marry its technological expertise with its compliance obligations. Continue Reading Private Company Enforcement: Bay Area Tech Company Designs Tech Solution to Its Compliance Problems