Margaret McQuade concentrates her practice on matters of employment law and executive compensation, with an emphasis on negotiating and drafting a wide range of agreements, and mediating and arbitrating claims on behalf of both employees and employers.

On July 6, the Securities and Exchange Commission filed a complaint in connection with a $68 million affinity fraud scheme allegedly orchestrated by Bingqing Yang, through her wholly owned management companies, Luca International Group, LLC, Luca Resources Group, LLC and Luca Energy Fund, LLC (collectively, Luca Managers), with the help of Ms. Yang’s chief fundraiser, Lei Lei.
Continue Reading

On May 20, BHP Billiton Ltd. and BHP Billiton Plc (BHPB), a global resources company that sponsored the 2008 Beijing Summer Olympic Games, settled Securities and Exchange Commission charges of Foreign Corrupt Practices Act (FCPA) violations. The SEC found that BHPB violated the FCPA by failing to devise and maintain internal controls over a global hospitality program that used BHPB’s Olympics sponsorship as a platform to entertain government officials.
Continue Reading

Federal Bureau of Investigation (FBI) wiretapping played an important role in the wide-ranging insider trading investigation and subsequent trials of Galleon Group LLC principals and traders. During his criminal prosecution, former Galleon trader, Craig Drimal, unsuccessfully moved to suppress evidence obtained via an authorized wiretap of his cell phone because of a failure to minimize interception of calls with his wife. His wife, Arlene Villamia Drimal, is now pursuing civil claims against FBI agents for wiretapping her personal telephone conversations with her husband, but her claims have thus far been unsuccessful. On May, 15, the US Court of Appeals for the Second Circuit dismissed Ms. Drimal’s complaint without prejudice to repleading, finding that her conclusory pleading failed to state a claim under Title III of the Omnibus Crime Control and Safe Streets Act of 1968, which requires the government to “minimize the interception of communications not otherwise subject to interception.” The Second Circuit also found fault with the lower court’s assessment of the agents’ qualified immunity defense.
Continue Reading

On April 16, the US District Court for the Northern District of Illinois denied a motion to dismiss “spoofing” charges against Michael Coscia, a high-frequency commodities futures trader, finding that the indictment was sufficient because it alleged that Coscia placed orders with an intent to cancel them. Coscia is charged with six counts of “spoofing” under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and six counts of commodities fraud under the 2009 Fraud Enforcement and Recovery Act.
Continue Reading

On April 22, the Securities and Exchange Commission announced that it is awarding a compliance officer between $1.4 million and $1.6 million for voluntarily providing the SEC with information that contributed to a successful enforcement action. According to the SEC, the compliance officer reported the misconduct after “responsible management at the entity became aware of potentially impending harm to investors and failed to take steps to prevent it.” Under Section 21F(b)(1) of the Securities Exchange Act of 1934, a whistleblower must provide the SEC with original information, which may be derived through independent knowledge or independent analysis. When the whistleblower is an employee whose principal duties involve compliance or internal audit responsibilities, the information generally will not be considered “original,” absent an exception. The SEC determined that an exception applied here because the compliance officer “had a reasonable basis to believe that disclosure of the information…[was] necessary to prevent the relevant entity from engaging in conduct that [was] likely to cause substantial injury to the financial interest or property of the entity or investors.”
Continue Reading

The Securities and Exchange Commission recently ordered two former CFOs of Saba Software, Inc. to reimburse the company for stock-sale profits and bonuses accrued during the 12-month periods following its materially false and misleading financial statements. Saba, a Silicon Valley-based software company, misstated revenues in SEC filings from October 2007 to January 2012.
Continue Reading

On February 6, the Securities Exchange Commission filed an amicus brief advising the United States Court of Appeals for the Second Circuit that the whistleblower protections of the Dodd-Frank Wall Street Reform and Consumer Protection Act cover individuals who report wrongdoing internally before reporting to the SEC.
Continue Reading

A Nevada District Court granted the Securities and Exchange Commission’s request for a $585 million judgment against MRI International, Inc. and its former CEO, Edwin Fujinaga, consisting of disgorgement, prejudgment interest and civil monetary penalties. The case involved a Ponzi scheme in which the defendants collected hundreds of millions of dollars for purported investments in medical accounts receivable, but used the investments to finance personal expenses and repay earlier investments. The court found the defendants liable for the scheme in 2014.
Continue Reading

Last week, the Securities and Exchange Commission submitted an amicus brief in support of an appellant before the US Court of Appeals for the Third Circuit, urging the court to adopt its interpretation of whistleblower anti-retaliation protections set forth in Section 21F of the Securities Exchange Act of 1934. Section 21F, created by the Dodd-Frank Wall Street Reform and Consumer Protection Act, directs the SEC to pay monetary awards to individuals who report securities violations to the SEC and prohibits employers from retaliating against whistleblowers. A New Jersey district court dismissed appellant’s complaint in April, holding that the anti-retaliation provisions do not protect individuals who only report violations internally. 
Continue Reading