Tag Archives: Walt Pavlo

Insider Trading, a Vague Law With Heavy Consequences

by Walt Pavlo

Since Congress has not specifically defined insider trading, courts have interpreted the Securities Exchange Act’s prohibition against manipulative or deceptive means to determine whether a violation has occurred. The imprecision of securities law has led many people to weigh in on what constitutes a criminal act.  Recently, Antonia Apps wrote over 2,000 words on the Second Circuit’s recent insider trading decision, United States v. Martoma, 869 F.3d 58 (2d Cir. 2017), and Greg Morvillo wrote two posts to clarify his thoughts on that case. Can you imagine a crime that is so difficult to define that it continues to spark debate with each new decision from a court? Continue reading →

The Yates Memo: The Promise and Reality A Year Later

by Walt Pavlo

Since the financial crisis of 2008, government prosecutors have come under fire for not prosecuting some of the top bank executives who, many say, were responsible for the financial crisis.   To remedy that perception, Assistant Attorney General Sally Quillian Yates announced the DOJ’s new policy on “Individual Accountability For Corporate Wrongdoing (PDF: 449 KB)” (Yates Memo) last year.   Its purpose was to hold individuals accountable for bad (illegal) behavior rather than just have corporations pay big fines.  In effect, corporations would be tasked with serving up their former employees if they had done something wrong.  The DOJ wanted to put a face on the criminal misconduct both to: 1) deter corporate bad behavior and; 2) show the general public that individuals were not getting away with criminal acts without punishment.  We were all optimistic.  Continue reading →

Got Prison? Here Are The Top 5 Things A Defendant Should Do Prior To Reporting

by Walt Pavlo

I once told someone that I helped people prepare for a stay in Federal Prison and they thought that I was just kidding.  As they asked me, “Prepare for what?  Don’t you just go?”  The truth is, there is a lot to be done.

At the Compliance & Enforcement blog we write about enforcement and compliance, but what isn’t always apparent is that a lot about enforcement is people going to prison.  Many of those convicted of white collar crimes spend many months, or years, prior to reporting to prison.  In one case that I wrote about extensively, Ross Mandell of Sky Capital was indicted on federal charges for securities fraud in July 2009, went to trial in June 2011, and was found guilty in July 2011.  He was sentenced to prison (12 years) in May 2012 and entered prison in September 2014.  That is a span of over five years!  Continue reading →

Politics Aside, Americans Seem Confused On What Is And What Is Not A Crime


FBI Director James Comey was grilled last week on Capitol Hill where Republicans condemned and Democrats lauded his decision to not recommend prosecuting presidential candidate Hillary Clinton for her actions of handling (mishandling) classified information.  As I watched Comey’s testimony, I was struck by how two groups of people could look at the same acts of a person and have such polarizing views as to whether or not a criminal act had occurred.  Politics aside, we need to have more of a consensus on what constitutes a crime. Continue reading →

How To Stop A Perpetrator: Making Compliance Training More Effective

by Walt Pavlo

I am commemorating a twentieth anniversary this year; my commitment of a financial crime while working at MCI Telecommunications. Over these years I have reflected on my reckless actions and have tried to make sense of it all. The fact is that I knew right from wrong and good from bad, but I had no experience in situations where the outcomes for making the right decision had such overwhelming consequences. Meeting financial goals through accounting tricks not only made our financials look good, it made me look good as well. There also seemed to be acceptance of my creative thinking, until it could no longer be sustained. That led to my belief that if I were going to cross the line further, why not do it for more personal benefit? It was a twisted way of thinking that cost me a few years in prison and a number of personal consequences … all well deserved. However, we still see otherwise good people making terrible mistakes. So is there anything more we can do? Allow me to speculate. Continue reading →