Facilitating Tax Fraud? Sotheby's Faces New York False Claims Act Action

New York state is going after businesses that help their clients and customers avoid taxes using the state’s False Claims Act. The targets include such esteemed businesses as Sotheby’s and its wealthy clients. Randall Fox of Kirby McInerney tells how Sotheby’s allegedly ran afoul of the Act and explains how the state is pursuing facilitators of tax fraud.

Judge Consolidated JPMorgan Spoofing Suits, Taps Counsel

A New York federal judge on Friday consolidated seven proposed class actions alleging JPMorgan Chase has been illegally spoofing the futures market since 2009 and appointed Lowey Dannenberg PC and Kirby McInerney LLP as interim lead co-counsel.

Legal Association Leader-Settles Obstruction Suit with Board

A Spanish attorney and officials with an international legal nonprofit told a D.C. federal court on Friday they struck a deal to settle claims that board members blocked him from assuming his duties as the organization's president after he was elected.

Investors’ $187M Big Bank Deals OK’d In Libor Rigging Case

The exchange-based investor class, represented by attorneys at Kirby McInerney LLP and Lovell Stewart Halebian Jacobson LLP, won initial approval of a $187 million settlement with Deutsche Bank, JPMorgan and five other big banks in a complex, multidistrict case claiming that the banks rigged the London Interbank Offered Rate benchmark.

California, Michigan, D.C. Eye Revenue From Tax Whistleblowers

Kirby McInerney Partner Randall Fox was quoted in this Bloomberg Tax article about tax-related false claims suits. California, Michigan, and the District of Columbia are considering bills that add tax code violations to the list of actionable frauds coming under their false claims laws. Mr. Fox notes that New York’s tax whistleblower law has resulted in “very stong and important cases.”

Roche Cyrulnik, Kirby, Robbins Geller Vie To Lead Bitcoin Suit

Kirby McInerney filed a response in support of interim lead counsel motion highlighting the firm’s experience and rigorous investigation regarding the direct impact on proposed class members in both the bitcoin and bitcoin related futures markets.

JP Morgan Whistleblower Case Tests Unclaimed Property Compliance

Unclaimed property operations and compliance managers at US financial firms will soon find out that the task is more difficult than they thought should JP Morgan Chase lose its appeal of a New York civil court judge’s ruling about the bank’s required interest payment on unclaimed accounts reported late to New York State.

Chief Justice launches report on litigation funding and class actions

Kirby McInerney Partner Meghan Summers recently presented a report before the Chief Justice of Ireland. The report, which Ms. Summers co-authored, focuses on how class actions could be implemented in Ireland.

Roche Cyrulnik, Kirby McInerney Bid For Lead In Bitcoin Suit

Kirby McInerney filed a motion for interim lead counsel in the recently consolidated case in the Southern District of New York, highlighting the firm’s in-depth pre-filing investigation of market participants in consultation with experienced experts.

Quartet of Bitcoin Manipulation Cases Consolidated in SDNY

The Southern District of New York consolidated a case brought by Kirby McInerney and three others that all concern the manipulation of Bitcoin prices by cryptocurrency companies, costing investors hundreds of billions of dollars. 

Kirby McInerney Settles Moody’s Captive Fraud Case

Moody’s has reached a settlement with New York-based law firm Kirby McInerney after it was accused of underpaying New York State and New York City business taxes between 2002 and 2014. Moody’s is alleged to have mischaracterised its income as premiums to its captive, Moody’s Assurance Company (MAC).

Tips for Japanese Companies When Responding to Discovery

Christopher Studebaker, Partner, and Yasuo Inada, Foreign Attorney, co-authored this article that provides a brief overview of discovery under federal law and outlines steps that the legal/IT departments in Japanese companies should undertake to ensure compliance with federal discovery obligations both before and during litigation.  The article is published (in Japanese) in a Japanese newspaper.

Recent Trends in U.S. Securities Litigation– ADR Litigation Risk
Part II: ADR Cases Involving Japanese Companies

Christopher Studebaker, Partner, and Sawa Nagano, Of Counsel, co-authored this article discussing recent trends in ADR issuances and post-Morrison cases involving ADRs.  The article is published (in Japanese) in a leading Japanese legal news service.

Recent Trends in U.S. Securities Litigation– ADR Litigation Risk
Part I: Overview of ADRs and Risks Related to Japanese Companies

Christopher Studebaker, Partner, and Sawa Nagano, Of Counsel, co-authored this article discussing recent trends in ADR issuances and post-Morrison cases involving ADRs.  The article is published (in Japanese) in a leading Japanese legal news service.

Firms Want $2M In Fees For Quantum Accounting Settlement

Kirby McInerney and Glancy Prongay & Murray asked a California federal court Thursday for roughly $2 million in fees for their efforts securing a tentative $8 million from data storage company Quantum Corp. to resolve a shareholder lawsuit over its accounting practices.

Treasure hunter helps companies, residents recover ‘lost’ money

Kirby McInerney Partner Randall Fox represents a whistleblower client in a case against JPMorgan Chase alleging that Chase held $60 million worth of unclaimed assets longer than it should have, depriving the state of about $12 million in interest income over roughly two years.

Kirby McInerney Achieves 3rd Circuit Victory Reviving State-Law Fraud Claims in Merck Opt-Outs

The Third Circuit on Thursday revived fraud claims brought under state law by investors that opted out of class actions involving Merck & Co. Inc.’s statements about cholesterol drugs. 

JPMorgan Must Defend Claim It Saved Millions on Abandoned Assets

JPMorgan Chase & Co. could be on the hook for millions in unpaid interest and penalties for delaying transfers of unclaimed property to the state of New York following a first-of-a-kind state court ruling.

Cattle Price-Fixing Cases Consolidated in Minnesota

A Minnesota federal court ruled Wednesday that some of the country’s largest meatpacking companies, including Tyson and Cargill, will now face consolidated allegations of colluding to drive down prices of cattle used for beef production.

Philly And Citibank Resolve Libor-Rigging Claims in MDL

Up next on Judge Buchwald’s docket is the distribution agreement of $182 million worth of deals the exchange-based plaintiffs struck with Bank of America, Barclays, Citibank, Deutsche Bank, HSBC and JP Morgan.

Schwab, Investors Ask 2nd Circ. To Revive Libor Claims

Charles Schwab Corp. and investors in financial instruments tied to the London Interbank Offered Rate on Friday urged the Second Circuit to reinstate claims against a slew of banks over their alleged manipulation of the benchmark, arguing they have proper antitrust standing and that the litigation belongs in U.S. federal courts.

Citi, JPM Get Nod For $182.5M Euribor Settlement Payout

A Manhattan federal judge on Friday approved a $182.5 million settlement between JPMorgan Chase & Co., Citigroup and investors who accuse the two megabanks of rigging a key euro rate, signing off also on a roughly $36 million haul for plaintiffs’ firms that brought the antitrust class action.

Class-action lawsuit seeks damages for county ‘discriminatory conduct’ in tax assesment

Three Nassau residents have filed a class-action lawsuit against the county on behalf of non-white property owners who they contend were forced to bear the property tax burden of wealthier, white communities due to county policies beginning in 2010.  Kirby McInerney represents the plaintiffs.

Sprint To Pay NY $330M In Tax FCA Case, $63M For Tipster

Mobile giant Sprint Corp. will pay $330 million to resolve a New York False Claims Act suit that accused the company of shirking $100 million in state taxes, with almost $63 million of that sum going to a whistleblower, the state attorney general said Friday.

J.P. Morgan Chase precious metals markets rigging lawsuit paused

JPMorgan Pushes Back On Depo Bid In Silver Trading Suit

How Ex-JP Morgan Silver Traders Guilty Plea Could Boost Manipulation Suit

Spa Castle to fork over $2.5 million: AG

Settling with the state, Spa Castle is going to pay $2.5 million in civil damages and criminal restitution over a tax fraud scheme, New York Attorney General Barbara Underwood and Acting Department of Taxation and Finance Commissioner Nonie Manion announced last Thursday.  “This is a case where tax cheaters would have stayed under the radar had it not been for a brave whistleblower reporting on the fraud,” Randall Fox of Kirby McInerney LLP, one of the two attorneys who represented the source.

3rd Circuit rules banks can’t push clients out of FINRA arbitration, breaks with 2nd, 9th

Kirby McInerney Partner Mark Strauss is quoted in this article about the Third Circuit’s recent decision that banks can’t push clients out of FINRA arbitration.

JP Morgan Can’t Duck FINRA Arbitration, 3rd Circuit Says

A Third Circuit panel ruled Tuesday that J.P. Morgan Securities must arbitrate a Pennsylvania health system’s claims over several pre-2008 auction rate securities offerings, finding the system hadn’t waived its right to arbitration before the Financial Industry Regulatory Authority by signing on to agreements with clauses pegging New York’s Southern District as the forum for any disputes.

The Erosion of American Pipe Tolling

Kirby McInerney Partner Meghan Summers authored an article published in Law360 about the erosion of American Pipe tolling of the statute of limitations.

Tax Qui Tams Reach Maturity

Thanks to 2010 amendments to New York’s False Claims Act, whistleblowers can receive incentive awards of 15 to 30 percent of the government's recovery for bringing actions — called “qui tam” actions — on behalf of the government to help recover tax monies lost by fraud.

Cigarette Kickbacks are Burning Small Distributors

The suit was filed last week in Brooklyn state court by several small New York distributors of cigarettes and other candy store items — Amsterdam Tobacco, Donohue Candy, Kingston Candy, Mountain Candy and Sunrise Candy — claiming that bigger out-of-state distributors for years have been allegedly giving kickbacks to stores that buy cigarettes from them.

Small cigarette wholesales accuse large companies of violating state tax laws

A lawsuit filed this week accuses five of the state’s largest tobacco wholesalers of giving secret rebates to customers to drive down competition as part of an alleged scheme which may have violated state laws that set minimum prices on cigarettes.

FCA Memo No Proof Of New DOJ Direction On Dismissals

A recently leaked memo setting out circumstances for when U.S. Department of Justice attorneys should use its rarely invoked authority to ask for “meritless” qui tam False Claims Act cases to be dismissed could foreshadow a more aggressive DOJ approach to dismissals, but proof will only come from seeing its future actions, attorneys said.

U.S. Company Settles Whistleblower Lawsuit, Pays for Importer’s Customs Fraud

Kirby McInerney Partner Mark Strauss authored this article on a whistleblower lawsuit involving customs fraud.  Federal prosecutors in New York recently announced the settlement of a remarkable lawsuit relating to a scheme to evade import duties.  The case involved an importer’s undervaluation of apparel to pay less duties than were really owed.

Tax Nonfilers Face Potential Liability Under New York FCA

A recent, little-noticed decision in the New York Supreme Court has confirmed that the tax provisions of New York’s False Claims Act apply not only to persons and companies that cheat on the tax returns they submit, but also to those who knowingly skirt their obligations by entirely failing to file any New York Tax returns.

FCA Cases Protect Claims by Relying on NY’s Favorable Pleading Standard

Fraud-related claims usually must be pled with particularity. But in a little-noticed provision at the end of New York’s False Claims Act, Sec.192(1-a), the New York legislature provided for a lower pleading hurdle when asserting violations of New York’s FCA in state court.

Trade Enforcement under Trump Likely to Involve Expanded Use of U.S. Whistleblower Statute

Kirby McInerney Partner Mark Strauss published an article in Supply and Demand Chain Executive regarding the use of U.S. Whistleblower laws under the current administration.

Expect Increased Use of Whistleblower Law Under Trump

Kirby McInerney Partner Mark Strauss authored the attached editorial for Global Trade Magazine regarding whistleblower law under the current administration.

6 Years of Tax Qui Tams in New York

In this viewpoint, Fox looks back at six years of New York tax enforcement through qui tam lawsuits. He concludes that the abuses predicted by opponents of the law have failed to materialize and that the statute, which allows tax recovery suits by private citizens, appears to have generated a good return on the investment. The full article is reproduced with permission of TaxAnalysts and is accessible on KM’s website.

Qui Tam Plaintiffs’ Bar Expects Increase in New York Whistle-Blower Cases

Bloomberg BNA quoted Kirby McInerney partner Randall M. Fox, former New York Attorney General Bureau Chief, in an article addressing a high profile whistle-blower tax case against Sprint Nextel Corp. for the company’s alleged failure to collect and pay sales taxes on flat-rate calling plans, and why the plaintiffs’ bar expects more of these types of cases to be filed.

Tax Fraud and the FCA: 4 Takeaways From NY’s Sprint Ruling

Kirby McInerney Partner Randall Fox published an article in Law360 discussing a whistleblower False Claims Act case against Sprint Corp. for failing to collect and pay more than $100 million in New York state and local sales taxes on its flat-rate monthly cell phone charges.

Presenting a False Claims Act Case: Back to Basics

False Claims Act cases focus on situations where the government has been victimized by fraud. A whistleblower who invokes the act first presents the case to government enforcement authorities who decide either to intervene and take up the case, or decline and allow the whistleblower to proceed on the government’s behalf.

Morgan Stanley, Investors Settle Dispute Over ‘Rigged’ Notes 

Morgan Stanley & Co. LLC has reached a settlement with a putative class of investors suing over $139 million in allegedly defective mortgage-backed securities, it told a New York federal judge, and expects to hand in the deal on Friday.

Haunted by Inflation, He Snapped Up Silver at $2, Made a Fortune and Lost It

Market fixing inquiry gathers pace

Representative comments by David Kovel.

Qui Tam Troubles, Part IV: Does New York Have the Answer?

This is the final article in a series on qui tam suits. This article discusses New York’s approach to tax fraud suits, which is being heralded as a possible model for both state and federal regimes.

The Case for Qui Tam Tax Claims: Former New York Attorney General Bureau Chief Randall Fox Tells Why States Should Lift Their Bar

On June 6, 2014, Bloomberg BNA published its interview with partner Randall M. Fox, former New York Attorney General Bureau Chief, on why states should lift their bar on qui tam tax claims.

Hess, Mercuria Units Added to Brent Crude Price-Fixing Lawsuit

Mercuria Energy Group Ltd. and Hess Corp. (HES:US)’s oil trading businesses were added to a lawsuit claiming they conspired with companies including BP Plc (BP), Statoil ASA (STL) and Royal Dutch Shell Plc (RDSA) to manipulate Brent crude oil prices.