The U.S. District Court for the Southern District of New York denied the SEC's motion to strike certain affirmative defenses of the former CFO of cannabis company Acreage Holdings, Inc. In its complaint, the SEC alleges that the CFO orchestrated a series of fraudulent financial transactions designed to artificially inflate Acreage's cash balance, in violation of Section 13(b) of the Securities Exchange Act of 1934 (the Exchange Act). In his answer, the CFO asserts (i) a [...]

The facts before the Third Circuit in the recently decided case of Patel v. United States illustrate how parties can put themselves in a bind if they make factual admissions when resolving a criminal case involving fraud on the government while not simultaneously resolving the government's civil claims under the False Claims Act (FCA) for the same underlying conduct. Background Nita and Kirtish Patel, a married couple, owned and operated mobile diagnostic testing companies providing services [...]

In a decision reinforcing the constitutional limits on successive prosecutions, the Second Circuit in United States v. Cole vacated the conviction of entrepreneur and former CEO of Iconix Brand Group, Neil Cole, for substantive fraud charges related to his purported role in illegally inflating the revenue of Iconix through the use of falsely inflated contracts and secretive reimbursements. The Second Circuit determined that a jury's acquittal of Mr. Cole on conspiracy charges related to the allegations [...]