Conflict Minerals Legislation: The SEC’s New Role as Diplomatic and Humanitarian Watchdog

Buried in the voluminous Dodd-Frank Wall Street Reform and Consumer Protection Act is an oft-overlooked provision requiring corporate disclosure of the use of “conflict minerals” in products manufactured by issuing corporations. This Article scrutinizes the legislative history and lobbying efforts behind the conflict minerals provision to establish that, unlike the majority of the bill, its goals are moral and political, rather than financial. Analyzing the history of disclosure requirements, the Article suggests that the presence of conflict minerals in an issuer’s product is not inherently material information and that the Dodd-Frank provision statutorily renders nonmaterial information material. The provision, therefore, forces the SEC to expand beyond its congressional mandate of protecting investors and ensuring capital formation by requiring issuers to engage in additional nonfinancial disclosures in order to meet the provision’s humanitarian and diplomatic aims. Further, the Article posits that the conflict minerals provision is a wholly ineffective means to accomplish its stated humanitarian goals and likely will cause more harm than good in the Democratic Republic of the Congo. In conclusion, this Article proposes that a more efficient regulatory model for conflict minerals is the Clean Diamond Trade Act and the Kimberly Process Certification Scheme

No Smoke and No Fire: The Rise of Internal Controls Absent Anti-Bribery Violations in FCPA Enforcement

The Foreign Corrupt Practices Act (FCPA) prohibits bribery of foreign public officials in order to obtain or retain business. It is, for all intents and purposes, an anti-bribery statute. To detect bribery, the FCPA contains accounting provisions related to bookkeeping and internal controls. The books and records provision requires issuers to make and maintain accurate books, records, and accounts; likewise, the internal controls provision requires that issuers devise and maintain reasonable internal accounting controls aimed at preventing and detecting FCPA violations. If one considers the analogy that bribery is the “fire” in FCPA enforcement actions, and books and records violations are the “smoke,” internal controls are the “smoke detectors.” The government is increasingly punishing, or threatening to punish, companies for the potential ineffectiveness of these “smoke detectors.” Internal controls violations arguably are not substantive violations, but instead are violations arising out of the potential for other violations. The recent increase in the number of enforcement actions alleging violations of the internal controls provision in the absence of any correlating anti-bribery provision violations suggests that enforcement of the Act has (d)evolved to a place well beyond its stated purpose. Additionally problematic is that the internal controls required by the FCPA are not a fixed standard but instead a fairly ambiguous set of recommendations and guidelines that depend on the characteristics of each company and industry. The result of this is overcriminalization and overenforcement of the statute by the government, and overcompliance by the private sector. This Article addresses the alarming shift in the interpretation of the breadth of the statute by the Securities and Exchange Commission (SEC) and the Department of Justice (DOJ), and discusses the vast theoretical ramifications of this overcriminalization and overenforcement

Karen E. Woody, Putting Pandora on Trial, 98 J. Crim. L. & Criminology 699 (2008) (reviewing Mark A. Drumbl, \u3cem\u3eAtrocity, Punishment, and International Law\u3c/em\u3e (2007))

In the wake of increasing globalization over the past fifty years, international criminal law has transformed from a toothless shadow into a concrete reality; the International Criminal Court is the most recent and impressive institutional accomplishment. Unfortunately, international criminal law has enjoyed this progress on the heels of increasingly horrific international crimes. International adjudicatory institutions have taken many forms and the sentences they deliver have varied widely. In Atrocity, Punishment, and International Law, Mark Drumbl reviews the strides made in international criminal law from the Nuremberg trials through present-day trials, particularly those related to the crimes committed in Rwanda and Yugoslavia. In doing so, Drumbl offers one of the most comprehensive assessments of the role of punishment in international criminal law. In this Review, I detail Drumbl\u27s primary themes and acknowledge the book\u27s numerous and notable contributions to the field of international criminal law. I then argue that a natural extension of Drumbl\u27s theory of cosmopolitan pluralism is the use of religious institutions as vehicles of rehabilitation and restoration for communities fractured by mass atrocity

The New Insider Trading

Pursuant to the SEC’s Rule 10b-5, in order to obtain a conviction for insider trading based upon a tipper-tippee theory, the government must prove that the tipper received a personal benefit for the tip, and that the tippee knew about that benefit. The last five years of blockbuster insider trading cases have focused on this seemingly nebulous personal benefit test, and the Supreme Court has been unable to clear the muddy waters. As a result, the parameters of insider trading remain hard to pin down and often shift depending on the facts of the most recent case. Two terms ago, the Supreme Court, in an unsurprising unanimous decision in Salman v. United States, reaffirmed the holding of Dirks, from which the personal benefit test arose. The Court in Salman, however, failed to elucidate the more problematic areas of insider trading, including the application of the personal benefit test if the tippee is not a trading relative or friend. Legal practitioners, legislators, and academics have offered up various solutions for the problem of having an amorphous law against insider trading, yet none have succeeded. This Article suggests that the hubbub over defining the personal benefit element of insider trading—sure to reach a fever pitch the next time a cert petition on the issue is granted—may be misguided. This is because there may be a simpler way to bring an insider trading case. Since Sarbanes-Oxley, there has been a sleepy provision of the criminal code that could present an end-around to the morass of insider trading precedents under Rule 10b-5. Under 18 U.S.C. § 1348, the government can bring an insider trading case under the more general umbrella of securities fraud, which has scant jurisprudential precedent. In other words, the heavily litigated personal benefit test found in Dirks may not apply to a charge of insider trading under § 1348. The elements required to prove a charge under § 1348 are similar to other fraud-based offenses such as mail and wire fraud, health care fraud, and bank fraud. Whether § 1348 was intended to apply to insider trading in particular is an open question, and a broader question is whether the jurisprudential interpretation for the elements of the crime of insider trading as defined under Rule 10b-5 should be imported into the judicial interpretation of § 1348. In other words, if the conduct that constitutes criminal insider trading under Rule 10b-5 exists only if the elements of the Dirks test are met, then a § 1348 charge for criminal insider trading may create an entirely new scheme and definition of the crime. This Article analyzes the potential of this dual paradigm and argues that, given the uncertainty and shifting parameters of insider trading prohibitions, application of § 1348 to insider trading should be afforded the rule of lenity

Diamonds on the Souls of Her Shoes: The Kimberly Process and the Morality Exception to WTO Restrictions

This Article analyzes the events predicating the Kimberley Process and examines the validity of the Kimberley Process in relation to international trade obligations. Part I describes the background of conflict diamonds and their role in African wars. The section outlines the need for regulation in the diamond industry and examines how other attempted measures at curbing the illicit diamond trade have fallen short. Part II details the Kimberley Process and its guidelines. This section analyzes the relevant U.S. legislation passed in 2003, the Clean Diamond Trade Act. Part II also suggests that because the Kimberley Process ( KP ) is predicated upon voluntary compliance, the KP in its current form will have little to no impact on curbing trade in conflict diamonds because its parameters are not legally binding. Part III analyzes whether, despite the current WTO waiver, the KP is a violation of international trade law. This section discusses the use of morality in international trade and proposes that any WTO challenge to the legislation will not stand because the Kimberley Process warrants the general exception to GATT in Article XX(a). Therefore, this section argues that despite its renewal, the waiver is not necessary to preserve the goals of GATT and international trade laws

Voluntary Disclosure Fostering Overenforcement and Overcriminalization of the FCPA

Professor Peter Reilly’s article, Incentivizing Corporate America to Eradicate Transnational Bribery Worldwide: Federal Transparency and Voluntary Disclosure Under the Foreign Corrupt Practices Act, 67 Fla. L. Rev. 1683 (2015), challenges the notion that voluntary disclosure of potential Foreign Corrupt Practices Act (FCPA) violations to the government is always the best course of action for a company. In a world where whistleblowers can receive a bounty for information provided to the Securities and Exchange Commission (SEC),2 self-reporting is a critical, high-pressure decision that each company must undertake when faced with potential FCPA liability. This Article takes a broader look at the FCPA landscape, focusing on SEC enforcement, in parallel to the Department of Justice (DOJ) focus that Professor Reilly undertakes in his Article. Specifically, this Article buttresses Professor Reilly’s argument by pointing out that the SEC has become an increasingly prosecutorial agency that uses disgorgement as a punitive measure, and enjoys the ability to be both prosecutor and judge in a settlement-driven landscape. In practicality, this means the scales are tipped in the government’s favor, making the decision whether to voluntarily disclose even murkier

The Role of Women Entrepreneurs in Rebuilding a Nation: The Rwandan Model

This Article contributes to the literature by analyzing the normative shifts within the country\u27s institutions, both pre- and post-genocide, and observes the role of women in restructuring the institutions as a major factor in the success that Rwanda enjoys today. By prioritizing gender equality in the recreation of its legal and economic structures, Rwanda is able to leverage the talents and capabilities of its entire population, and provides a model that can be applied to a number of other countries. Part I details the historical underpinnings of the Rwandan genocide and humanitarian crisis. Part II addresses the efforts to establish the rule of law in the aftermath of such a tragedy and describes the novel use of an indigenous forum for conflict resolution, gacaca, and the impact that this type of judicial experiment had on women in particular. Part III analyzes how Rwanda created a legal environment that empowers women. Part IV analyzes how the combination of reestablishing the rule of law through gacaca and an empowering legal environment helped sparked an economic rebirth within Rwanda, and promoted peace. While some details of Rwandan society post-genocide may be unique, this Part also outlines how the lessons from Rwanda can be applied more broadly and make a contribution to our understanding of how women influence peace, transitional justice, and entrepreneurship

A Low Noise Receiver for Submillimeter Astronomy

A broadband, low noise heterodyne receiver, suitable for astronomical use, has been built using a Pb alloy superconducting tunnel junction (SIS). The RF coupling is quasioptical via a bowtie antenna on a quartz lens and is accomplished without any tuning elements. In its preliminary version the double sideband receiver noise temperature rises from 205 K at 116 GHz to 815 K at 466 GHz. This is the most sensitive broadband receiver yet reported for sub-mm wavelengths. Its multi-octave sensitivity and low local oscillator power requirements make this receiver ideal for remote ground observatories or space-borne telescopes such as NASA's Large Deployable Reflector. A version of this receiver is now being built for NASA's Kuiper Airborne Observatory