Tag Archives: Rahul Mukhi

Second Circuit Reinstates FIFA Bribery Convictions, Reviving Honest Services Fraud Prosecutions for Foreign Commercial Bribery

by David A. Last, Rahul Mukhi, Victor L. Hou, Lisa Vicens, Matthew M. Yelovich, and Sarah Pyun

From left to right:  David A. Last, Rahul Mukhi, Victor L. Hou, Lisa Vicens, Matthew M. Yelovich, and Sarah Pyun (photos courtesy of Cleary Gottlieb Steen & Hamilton LLP)

In a significant decision with broad implications for companies and individuals operating internationally, the U.S. Court of Appeals for the Second Circuit has reversed the acquittal of a former media executive and a sports marketing company in the long-running FIFA bribery investigation.[1]  The ruling reinstates jury convictions for honest services wire fraud and money laundering conspiracy, holding that the federal honest services fraud statute, 18 U.S.C. § 1346, can apply to foreign commercial bribery schemes.[2]

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Supreme Court Upholds Expansive Reading of Wire Fraud Statute

by David A. Last, Rahul Mukhi, Joon H. Kim, Matthew M. Yelovich, and Michael Cronin

From left to right: David A. Last, Rahul Mukhi, Joon H. Kim, Matthew M. Yelovich, and Michael Cronin (photos courtesy of Cleary Gottlieb Steen & Hamilton LLP)

On May 22, 2025, the Supreme Court unanimously upheld the wire fraud conviction of a government contractor in Kousisis v. United States, rejecting the argument that federal wire fraud requires proof of economic loss to the victim. In so holding, the Court endorsed the “fraudulent inducement” theory of wire fraud, marking a victory for federal prosecutors after several recent decisions that narrowed the scope of federal fraud statutes. This decision takes on added significance given the current administration’s renewed emphasis on False Claims Act (“FCA”) enforcement, as companies now face heightened exposure under both criminal fraud and civil FCA theories for false representations to government agencies, even absent demonstrable financial harm.

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Trump Administration Targets International Cartels and Transnational Criminal Organizations, Shifting Enforcement Focus for Businesses

by Joon Kim, Lisa Vicens, Rahul Mukhi, David Last, Samuel Chang, Katherine Lynch, and Jordan McMeans

Photos of the authors

Top left to right: Joon Kim, Lisa Vicens, Rahul Mukhi and David Last. Bottom left to right: Samuel Chang, Katherine Lynch, and Jordan McMeans (Photos courtesy of Cleary Gottlieb Steen & Hamilton LLP).

A recent Executive Order from President Donald Trump and subsequent memoranda from the Department of Justice (“DOJ”) signal an anticipated crackdown on international cartels, transnational criminal organizations (“TCOs”), and those who provide material support to such entities. This development exposes companies and individuals with foreign business operations and activities, particularly in Latin America, to potential increased risks in this area, while suggesting a shift in focus away from investigations and cases that do not involve such a connection. Since these cartels and TCOs are not formal entities with clear memberships, businesses operating in countries where these groups operate will likely face substantial challenges with respect to compliance and risk management. 

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The SEC’s Crypto Task Force Maps Its Journey

by Matthew Solomon, Tom Bednar, Hugh Conroy, Jr., Deborah North, Rahul Mukhi, Brandon Hammer, Samuel Levander, and Alex Janghorbani

From left to right: Matthew Solomon, Tom Bednar, Hugh Conroy, Jr., Deborah North, Rahul Mukhi, Brandon Hammer, Samuel Levander, and Alexander Janghorbani (photos courtesy of Cleary Gottlieb)

On February 4, 2025, SEC Commissioner Hester Peirce published a statement titled “The Journey Begins,” laying out a vision for the new administration’s SEC Crypto Task Force.[1] The statement signals a clean break from the enforcement-centered approach to the digital asset industry taken by former SEC Chair Gary Gensler.  Commissioner Peirce compares that past approach to a bad road trip, where the Commission “refused to use regulatory tools at its disposal and incessantly slammed on the enforcement brakes as it lurched along a meandering route with a destination not discernible to anyone.” 

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Cybersecurity Disclosure and Enforcement Developments and Predictions

by Francesca L. Odell, Rahul Mukhi, Tom Bednar, Nina E. Bell, and Greg Stephens

Photos of the authors

Left to right: Francesca L. Odell, Rahul Mukhi, Tom Bednar, and Nina E. Bell (Photos courtesy of Cleary Gottlieb Steen & Hamilton LLP) (Not Pictured: Greg Stephens)

The SEC pursued multiple high-profile enforcement actions in 2024, alongside issuing additional guidance around compliance with the new cybersecurity disclosure rules.

Together these developments demonstrate a continued focus by the SEC on robust disclosure frameworks for cybersecurity incidents. Public companies will need to bear these developments in mind as they continue to grapple with cybersecurity disclosure requirements going into 2025.

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Crossing a New Threshold for Material Cybersecurity Incident Reporting

by Helena K. Grannis, Rahul Mukhi, Jonathan S. Kolodner, Tom Bednar, Nina E. Bell, and James P. Abate

Photos of authors

Helena K. Grannis, Rahul Mukhi, Jonathan S. Kolodner, Tom Bednar, Nina E. Bell, and James P. Abate (photos courtesy of Cleary Gottlieb Steen & Hamilton LLP)

In July 2023, the U.S. Securities and Exchange Commission (SEC) adopted final rules to enhance and standardize disclosure requirements related to cybersecurity. In order to comply with the new reporting requirements of the rules, companies will need to make ongoing materiality determinations with respect to cybersecurity incidents and series of related incidents. The inherent nature of cybersecurity incidents, which are often initially characterized by a high degree of uncertainty around scope and impact, and an SEC that is laser- focused on cybersecurity from both a disclosure and enforcement perspective, combine to present registrants and their boards of directors with a novel set of challenges heading into 2024. Continue reading →

U.S. District Court Tosses FIFA Bribery Convictions, Finding Honest Services Statute Does Not Reach Foreign Commercial Bribery

 by Victor L. Hou, Joon H. Kim, Jonathan S. Kolodner, Rahul Mukhi, Hannah Rogge, Lisa Vicens, David A. Last, Matthew C. Solomon, and Jennifer Kennedy Park.

Photos of the authors

Top left to right: Victor L. Hou, Joon H. Kim, Jonathan S. Kolodner, Rahul Mukhi, and Hannah Rogge.
Bottom left to right: Lisa Vicens, David A. Last, Matthew C. Solomon, and Jennifer Kennedy Park.
(Photos courtesy of Cleary Gottlieb Steen & Hamilton LLP).

On September 1, 2023, U.S. District Judge Pamela K. Chen of the Eastern District of New York granted a judgment of acquittal in the latest FIFA bribery prosecution, holding that the federal honest services statute, 18 U.S.C. § 1346, does not cover foreign commercial bribery in light of recent Supreme Court precedent.

The decision comes after a jury convicted two defendants of honest services wire fraud and money laundering arising from the U.S. Department of Justice (“DOJ”)’s multi-year pursuit of alleged corruption in FIFA and the international soccer media industry.  Judge Chen based her ruling on the Supreme Court’s recent decisions in Ciminelli v. United States and Percoco v. United States, which cabined the reach of honest services mail and wire fraud in domestic corruption prosecutions.  Applying the principles articulated by these two decisions—which were issued by the Supreme Court two months after the verdict in the latest FIFA trial—Judge Chen held that honest services did not cover the foreign commercial bribery that was the object of the charged conspiracy.  The DOJ may appeal, and U.S. prosecutors may still reach similar conduct under different federal statutes, like the Foreign Corrupt Practices Act (“FCPA”), the federal programs bribery statute, anti-money laundering laws, and the Travel Act, albeit with some limitations.  However, the decision continues a trend of U.S. courts rejecting an overly broad reading of federal fraud and corruption statutes. 

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SEC Proposes Rules Limiting the Use of Artificial Intelligence by Registered Investment Advisers and Broker-Dealers

by Robin M. Bergen, Brant K. Brown, James R. Burns, Jennifer Kennedy Park, Rahul Mukhi, and Mohit Rathi

Photos of the authors

Robin M. Bergen, Brant K. Brown, James R. Burns, Jennifer Kennedy Park, Rahul Mukhi, and Mohit Rathi (photos courtesy of Cleary Gottlieb Steen & Hamilton LLP)

On July 26, 2023, the Securities and Exchange Commission (“SEC”) proposed new rules targeting the use of predictive data analytics and artificial intelligence (“AI”) by registered investment advisers (“RIAs”) and broker-dealers.[1]  The new proposed rules focus on the potential for conflicts of interest and the possibility that newer, more complex analytics models (including those using AI) might optimize decision making for RIAs and broker-dealers by placing those firms’ interests above the interests of their clients.[2]  The proposed rules would require RIAs and broker-dealers to: (i) evaluate whether their use of technologies “that optimize for, predict, forecast or direct investment-related behaviors or outcomes” create such a conflict of interest, and (ii) either stop using or address the effects of tools that place a firm’s interests before the interests of clients.  RIAs and broker-dealers will also will be required to adopt policies to ensure compliance with the new proposed rules.[3] 

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Second Circuit Rules Foreign State-Owned Bank Does Not Have Sovereign Immunity From Criminal Prosecution

by Carmine Boccuzzi, Jr., Jonathan Kolodner, Rahul Mukhi, Boaz Morag, Rathna Ramamurthi, Hyatt Mustefa, and Matthew Slater 

The U.S. Court of Appeals for the Second Circuit recently held in U.S. v. Halkbank[1] that a Turkish state-owned bank did not have sovereign immunity from criminal charges that it engaged in a conspiracy to launder $20 billion of Iranian oil and gas proceeds in violation of U.S. sanctions.

While the district court had joined other Circuit courts in ruling that the Foreign Sovereign Immunities Act (“FSIA”) does not confer on foreign sovereigns immunity from criminal prosecutions, the Second Circuit declined to decide that unsettled issue, except insofar as it held that the FSIA is not the only source of criminal jurisdiction over a foreign sovereign.  Instead, the Second Circuit assumed arguendo that the FSIA confers immunity in the criminal context and held that the conduct at issue would fall under the FSIA’s commercial activity exception to immunity. 

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DOJ Charges Former Uber Executive for Alleged Role in Attempted Cover-Up of 2016 Data Breach

by Rahul Mukhi, Joon H. Kim, Jonathan S. Kolodner, and Michael J. Phelan

On August 20, 2020, the Department of Justice (“DOJ”) announced that it had charged Joseph Sullivan, the former Chief Security Officer (“CSO”) of Uber Technologies Inc. (“Uber”), with obstruction of justice and misprision of a felony for allegedly attempting to cover up Uber’s 2016 data incident during the course of an investigation by the Federal Trade Commission (“FTC”). While the DOJ and federal law enforcement have generally treated corporate hacking targets as victims in connection with data breaches, the charges against Sullivan reinforce that they will actively pursue any violations of federal law that are committed by entities or individuals during the course of responding to such incidents.

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