Via Peter Henning @ DealBook.
Charges against a firm for organizing a program to dispense inside information has not been seen before, but Mr. Nguyen’s plea agreement indicates that prosecutors may now view Primary Global as the hub of the case.
Ever since the demise of accounting firm Arthur Andersen in 2002, prosecutors have been reluctant to pursue criminal charges against an organization when there is a threat the prosecution will put the entire operation out of business, inflicting harm on innocent employees and investors. But if management was involved in the misconduct, then there is a greater chance the Justice Department will move against the entity and not just the individuals.
A recent example of charges against a firm for conduct by its leaders was the prosecution of the law firm Milberg Weiss for the role of its name partners in making improper payments to expert witnesses and representative plaintiffs in class actions it pursued. Prosecutors even included charges under the Racketeer Influenced and Corrupt Organizations Act, more commonly known as RICO, against the firm, which ultimately paid a $75 million fine to settle the matter.
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