Category Archives: Antitrust Monitor by GeyerGorey LLP

Phillip Zane reprises his class on antitrust and unfair competition for the Ethics & Compliance Officer Association.

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GeyerGorey attorney Phillip Zane will reprise his class on antitrust and unfair competition which he has taught since 2009 as part of the U.S. Law Course (formerly the ECOA Law School) of the Ethics & Compliance Officer Association.  The ECOA is an association of individuals who are responsible for the ethics and compliance programs of their organizations. It is the largest such organization in the world.  The U.S. Law Course is a seven-week program covering a wide range of legal topics designed to teach legal concepts and methods of analysis to non-lawyers who serve as ethics and compliance officers and to lawyers as a refresher in areas likely to give rise to compliance issues.  The course repeats several times each year. For more information on this course or to register for a future course, please visit the ECOA’s website www.theecoa.org or http://www.theecoa.org/imis15/ECOAPublic/EVENTS/ECOA_Law_School/ECOAPublic/EventContent/EventPages/ECOA_Law_School.aspx?hkey=ab1ded3b-cd77-49bd-95f7-bf4df4bd70c5.

Mr. Zane brings to the course his experience in investigating alleged international cartels and defending companies and individuals accused of antitrust violations and other financial crimes. He mixes fundamental skills, tools for sophisticated analysis and problem solving, and the U.S.government’s own surveillance tapes of a price-fixing conspiracy into a unique presentation on antitrust and business torts.

Mr. Zane focuses his practice on government investigations, and criminal litigation and appeals, especially in matters relating to antitrust and trade regulation. He handles the full range of antitrust litigation and counseling.

DOJ backs antitrust leniency program; attorneys oppose expansion of compliance efforts

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DoJ backs antitrust leniency program; attorneys oppose expansion of compliance efforts PaRR

The US Department of Justice (DoJ) criminal antitrust leniency program is working well and should not be supplemented or replaced by an expansion of a program that would give sentencing credit for violators that have price-fixing compliance programs, DoJ officials and antitrust attorneys said.

“Antitrust compliance programs are only as good as the buy-in from the top,” an antitrust attorney with extensive experience at the DoJ told PaRR.

A DoJ spokesperson said that while the Antitrust Division does have a compliance credit program, it is not used often because of the number of company executives usually implicated in a price-fixing probe. “The sentencing guidelines provide that, when high-level personnel at the company participated in the cartel conduct, credit is not to be given for compliance programs,” the spokesperson said. The spokesperson said that in most cases “high-level or substantial authority personnel” are involved in any price-fixing scheme.

However, a long-time compliance officer told PaRR that the Antitrust Division should adopt an approach similar to how the DoJ’s Criminal Division enforces the Foreign Corrupt Practices Act (FCPA).

“In the anti-corruption field, they’re focused on prevention,” Joseph Murphy, an attorney with the Compliance Systems Legal Group, told PaRR. “They don’t just want to prosecute it, they want to prevent it.”

Murphy recently publicly questioned whether the DoJ’s prosecution of auto parts companies has been the success that many have said it is, adding that the cartels existed for many years before being discovered.

And even then, the conspiracy was only discovered when a company sought leniency in exchange for providing information about price-fixing. The auto parts investigation has prompted a renewed discussion of compliance programs among attorneys.

In the FCPA realm, DoJ officials push companies to operate extensive anti-bribery compliance programs in order that they may be given a more lenient sentence. Business groups have been pushing for the FCPA to be amended to allow companies to use compliance programs as a defense as the DoJ decides whether to prosecute a company or its employees.

The DoJ and the Securities and Exchange Commission last year issued extensive guidance on the FCPA that describes the hallmarks of an effective compliance program.

A second antitrust attorney with DoJ experience agreed that the Antitrust Division should expand efforts to push companies to develop compliance programs to help prevent price-fixing.

“I agree that the Antitrust Division could do a lot more to incentivize companies to have effective compliance programs,” said a second antitrust attorney with DoJ experience.

But another antitrust attorney said that expanding efforts to require extensive compliance programs would not be effective. “It’s probably true that [antitrust] prosecutors do not place as much emphasis on compliance regimes as do FCPA prosecutors, but I think the criticism is misguided,” said Hays Gorey, an attorney with GuyerGorey and a former DoJ attorney in the Antitrust and Criminal Divisions. However, he added that, “I would not be in favor of layering new compliance obligations on firms generally just because some violate the law.”

Gorey said the antitrust leniency program has achieved its goals. “The leniency program, by almost all measures, has been an enormous success leading to the discovery of vast conspiracies and the prosecution of large numbers of individuals and companies who violate the law,” he said.

And the first antitrust attorney said there would be a “tremendous outcry” if officials of a company that overcharged customers millions of dollars as a result of a price-fixing scheme received a much lighter sentence simply because it had a compliance program.

by David Baumann in Washington DC

AAI Event with Susan Crawford, Allen Grunes, Bert Foer and Don Resnikoff discussing telecom competition (November 22, 2013)

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The American Antitrust Institute, in cooperation with co-sponsor Antitrust and Consumer Law Section of the District of Columbia Bar, presents Susan Crawford discusses telecom competition and her book Captive Audience with Bert Foer, Allen Grunes, and Don Resnikoff

Event Details:

  • Friday, November 22, 12:15 to 1:15 PM
  • Register by sending an email to programinfodonresnikofflaw@mail.com
  • Call in information for the teleconference will be e-mailed to you.
  • There is no charge.

About Susan Crawford:
Susan Crawford is a professor at the Benjamin N. Cardozo School of Law, a fellow at the Roosevelt Institute, and a co-director of the Berkman Center. She is the author of Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age, and a contributor to Bloomberg View and Wired. Don Resnikoff’s review of Captive Audience is available here. An excerpt from the review is at the end of this notice.

The American Antitrust Institute, in cooperation with co-sponsor Antitrust and Consumer Law Section of the District of Columbia Bar, presents
Susan Crawford discusses telecom competition and her book Captive
Audience with Bert Foer, Allen Grunes, and Don Resnikoff

About Bert Foer:
Albert A. (“Bert”) Foer is President and Founder of the American Antitrust Institute. His career has included private law practice in Washington, DC); the Federal Senior Executive Service (as Assistant Director and Acting Deputy Director of the Federal Trade Commission’s Bureau of Competition). He has published numerous articles, book chapters, and reviews relating to competition policy.

About Allen Grunes:
Allen Grunes is a member of AAI’s Advisory Board. He is a partner at GeyerGorey LLP, a firm started one year ago by three former DOJ Antitrust Division lawyers. Allen spent more than a decade at the Antitrust Division, where he led many merger and civil nonmerger investigations in radio, television, newspapers, motion pictures, and other industries. He and fellow AAI Advisory Board member Maurice Stucke have coauthored several articles on media and telecom, including “Antitrust and the Marketplace of Ideas” (Antitrust Law Journal), “Antitrust Analysis of the AT&T/T-Mobile Transaction” (Federal Communications Law Journal) and “Why More Antitrust Immunity for the Media is a Bad Idea” (Northwestern Law Review). His practice includes advising clients on mergers and acquisitions, providing counseling on non-merger matters, and representing clients in federal court, before the federal antitrust agencies and before Congress. His extensive experience includes media and entertainment, telecommunications, and the high-tech sector. He was named as a “Washington D.C. Super Lawyer” for 2013. 

About Don Resnikoff:
Don Resnikoff is a member of AAI’s Advisory Board, and the organizer of this program. He is currently in private practice in the District of Columbia. He previously was a Senior Assistant Attorney General for the District of Columbia. Before that he served for more than twenty years as an antitrust litigator with the Antitrust Division, United States Department of Justice. His experience also includes private practice corporate litigation as a partner with a New York City firm, recent Of Counsel experience, and service as an Assistant United States Attorney in New Jersey.

From the Resnikoff Review of “Captive Audience:”
Susan Crawford’s bottom-line observations are straightforward: For internet service customers, there are only a few companies from which to buy. Of those, a small number of large companies provide internet service by a cabled wire or fiber-optic connection. Comcast is the most important. Comcast and other cable companies each dominate large geographic regions with little competition. Each can raise prices for fast internet access without significant constraints.

A small number of large companies provides internet service using wireless radio technology instead of cabled wire or fiber-optic connections. Wireless internet access is dominated by AT&T and Verizon. Crawford explains that wireless internet transmission is in a separate market from wired because
wireless transmission of digital signals is too slow to compete with internet service delivered by wire or fiber-optic cable. The wired and wireless products are complementary, not competitive.

To make matters worse, government approval of the Comcast merger with content provider NBC Universal has reinforced a situation where cable companies that dominate distribution of digital signals also control important content. The consequence is that Comcast, the largest high-speed internet distribution company, is in a position to throttle independent providers of television content such as movies and sports.

Antitrust Division Tax Lien Initiative Continues…

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SIX INVESTORS INDICTED FOR THEIR ROLES IN BID RIGGING SCHEME AT
MUNICIPAL TAX LIEN AUCTIONS IN NEW JERSEY

Investigation Has Yielded 20 Charges to Date

WASHINGTON — A federal grand jury in Newark, N.J., returned an indictment against six investors for their roles in a conspiracy to rig bids at auctions conducted by New Jersey municipalities for the sale of tax liens, the Department of Justice announced.

The indictment, filed today in U.S. District Court for the District of New Jersey in Newark, charges four individuals, Joseph Wolfson, Gregg Gehring, James Jeffers Jr. and Robert Jeffrey, and two entities, Betty Simon Trustee LLC and Richard Simon Trustee, with participating in a conspiracy to rig bids at tax lien auctions in New Jersey.  According to the indictment, from at least as early as 1998 and continuing until as late as February 2009, the investors participated in a conspiracy to rig bids at auctions for the sale of municipal tax liens in New Jersey by agreeing to allocate among certain bidders which liens each would bid on.  The indictment alleges that the investors proceeded to submit bids in accordance with the agreements and purchased tax liens at collusive and non-competitive interest rates.

Joseph Wolfson, of Margate, N.J., was a part-owner of two entities that invested in municipal tax liens, Betty Simon Trustee and Richard Simon Trustee, both of Northfield, N.J.  Gregg Gehring, of Newton, N.J., was employed by a major tax lien investment company as a vice president.  James Jeffers Jr., of Burlington, N.J., was a bidder for Crusader Servicing Corp., which pleaded guilty to its role in the conspiracy in September 2012, and also a bidder for Crusader’s successor corporation. Robert Jeffrey, of Bradenton, Fla., was a bidder for both Crusader and its successor corporation.

“The individuals and entities charged today demonstrated a blatant disregard for the competitive process by allocating the purchase of certain municipal tax liens by, from time to time, flipping a coin, drawing numbers out of a hat or drawing from a deck of cards,” said Leslie C. Overton, Deputy Assistant Attorney General for the Antitrust Division.  “The Antitrust Division remains committed to prosecuting those who thwart the competitive bidding process.”

The department said that the primary purpose of the conspiracy was to suppress and restrain competition in order to obtain selected municipal tax liens offered at public auctions at non-competitive interest rates.  When the owner of real property fails to pay taxes on that property, the municipality in which the property is located may attach a lien for the amount of the unpaid taxes.  If the taxes remain unpaid after a waiting period, the lien may be sold at auction.  State law requires that investors bid on the interest rate delinquent property owners will pay upon redemption.  By law, the bid opens at 18 percent interest and, through a competitive bidding process, can be driven down to zero percent.  If a lien remains unpaid after a certain period of time, the investor who purchased the lien may begin foreclosure proceedings against the property to which the lien is attached.  Since the conspiracy permitted the conspirators to purchase tax liens with limited competition, each conspirator was able to obtain liens which earned a higher interest rate.  Property owners were therefore made to pay higher interest on their tax debts than they would have paid had their liens been purchased in open and honest competition, the department said.

The indictment alleges, among other things, that from at least as early as 1998 and continuing until as late as February 2009, prior to the commencement of certain tax lien auctions in New Jersey, the investors and their co-conspirators agreed not to compete for the purchase of certain municipal tax liens.

A violation of the Sherman Act carries a maximum penalty of 10 years in prison and a $1 million fine for individuals.  The maximum fine for a Sherman Act violation may be increased to twice the gain derived from the crime or twice the loss suffered by the victim if either amount is greater than the $1 million statutory maximum.

Including today’s charges, 20 individuals and entities have been charged as part of an ongoing investigation into bid rigging or fraud related to municipal tax lien auctions in New Jersey.  To date, 11 individuals – Isadore H. May, Richard J. Pisciotta Jr., William A. Collins, Robert W. Stein, David M. Farber, Robert E. Rothman, Stephen E. Hruby, David Butler, Norman T. Remick, Robert U. Del Vecchio Sr., and Michael Mastellone – and three companies, DSBD LLC, Crusader Servicing Corp., and Mercer S.M.E. Inc., have pleaded guilty aspart of this investigation.

Today’s charge is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations.  Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants, including more than 2,700 mortgage fraud defendants.  For more information on the task force, visit www.stopfraud.gov.

This ongoing investigation is being conducted by the Antitrust Division’s New York Field Office and the FBI’s Atlantic City, N.J., office.  Anyone with information concerning bid rigging or fraud related to municipal tax lien auctions should contact the Antitrust Division’s New York Field Office at 212-335-8000, visit www.justice.gov/atr/contact/newcase.htm or contact the Atlantic City Resident Agency of the FBI at 609-677-6400.

 

Interview with Susan Crawford on Telecom Competition and her book ‘Captive Audience’

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Interview with Susan Crawford on Telecom Competition and her book ‘Captive Audience’

 

 

Start: November 22, 2013 Friday 12:15 PM
End: November 22, 2013 Friday 1:15 PM

Description
free event, registration is required.Please RSVP to [email protected].

Please note: You are not providing your information to the D.C. Bar, but to an organizer for this program.

Professor Susan Crawford and an expert panel will discuss her book, “Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age.” The book describes an internet service market with Comcast and a handful of other cable companies each dominating large geographic regions for wired service and with AT&T and Verizon dominating wireless service. Dominant cable companies also control important content, so there is potential to throttle independent providers of television content such as movies and sports.

 

 

This teleconference is sponsored by the Antitrust and Consumer Law Section, in cosponsorship with the American Antitrust Institute.

**This program is offered in a live teleconference format.

Please note: Teleconference information will be e-mailed to registrants 24 hours prior to the event.

 

Location
Teleconference Only
Washington DC 20005
Contact
Sections Office 202-626-3463
Speakers
Susan Crawford, Professor, Benjamin N. Cardozo School of Law, Fellow, Roosevelt Institute, co-director, Berkman Center
Bert Foer, President and Founder, American Antitrust Institute
Allen Grunes, Partner, Geyer Gorey LLP, Washington, DC
Don Resnikoff, Attorney, Law Offices of Don Resnikoff, Washington, DC
CLE Credit
No
Cost
**This is a free event, see above for RSVP $0.00

http://mobile.dcbar.org/courses/details.cfm?eventCD=021407GEN&position=5-19

Experts See Inconsistencies in DOJ’s Merger Deal with Airlines

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GeyerGorey LLP’s Maurice Stucke provides analysis of Airlines Merger challenge with the Wall Street Journal:

Experts See Inconsistencies in DOJ’s Merger Deal with Airlines

GeyerGorey partner Allen Grunes to speak at conference in Seoul, South Korea, about private antitrust enforcement.

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Allen Grunes will speak at a conference on international trends in private antitrust enforcement that is being held in Seoul, South Korea on November 1, 2013.  He will present a paper on the U.S. experience with treble damages as part of a program examining private enforcement in the EU, U.S. and China and recent developments in Korea.  The program is jointly sponsored by the Korea University ICR Law Center, the Korean Competition Law Association, and the SNU Center for Competition Law.  More information may be found on the ICR website.

 

LIBOR update: Wall Street Journal Ordered Not to Divulge Libor Names

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Journal Ordered Not to Divulge Libor Names

U.K. Prosecutors Win Injunction Amid Investigation

“A British judge ordered the Journal and David Enrich, the newspaper’s European banking editor, to comply with a request by the U.K.’s Serious Fraud Office prohibiting the newspaper from publishing names of individuals not yet made public in the government’s ongoing investigation into alleged manipulation of the London interbank offered rate, or Libor.”

Sacramento Bee: “Patricia Davis, former Assistant Director, USDOJ Civil Division, joins GeyerGorey LLP”

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Sacramento Bee: “Patricia Davis, former Assistant Director, USDOJ Civil Division, joins GeyerGorey LLP”

MainJustice.Com: “Former Civil Division Fraud Leader Joins White Collar Firm”

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MainJustice.Com: “Former Civil Division Fraud Leader Joins White Collar Firm”