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The government isn’t just cracking down on securities fraud. Since 1999, more than 75 corporate officers have been imprisoned for federal antitrust crimes-a greater number than the total for the previous ten years. And that’s just the beginning, according to James Griffin, a deputy assistant attorney general who has been a key player in some of the U.S. Justice Department’s highest-profile antitrust convictions. “It’s hard to predict what the numbers will be over the next few years, but the department is moving forward in an aggressive manner,” says Griffin, who has been with Justice’s antitrust division since 1987. Charles James, the former head of the division, has also noted the office’s strong record in criminal enforcement ["Shake-up at Antitrust," December 2002]. The overall trend has been toward more frequent and longer prison terms, with the average sentence now 15 months. At the same time, individual executives are now facing fines as high as $10 million. In October, for example, a Luxembourg-based manufacturer of textile staples and its former U.S. director, Troy Stanley, pleaded guilty to participating in a price-fixing conspiracy. The company agreed to pay a $28.5 million criminal fine, while Stanley was hit with a $20,000 criminal fine and eight months in jail. In New York, prosecutors recently secured nine guilty pleas in an ongoing investigation of printing companies that serve ad agencies. According to Douglas Tween, a trial attorney in the New York office of Justice’s antitrust division, the investigation is far from over, and five related indictments remain outstanding. A Decade-Long Transformation Prosecutors started getting tough in the early 1990s, when changes in the federal sentencing guidelines enabled them to seek longer sentences and stiffer fines. At the same time, a change in prosecutorial discretion at the Justice Department “got the ball rolling,” according to David Laing, an antitrust partner in the Washington, D.C., office of Baker & McKenzie. “The laws have been on the books since the 1890s,” Laing says, “but Gary Spratling, the antitrust division’s deputy assistant attorney general in the 1990s, played an integral role in invigorating the process.” Spratling ended his 28-year career with the Justice Department in 2000 and is now a partner in the San Francisco office of Gibson, Dunn & Crutcher. He did not respond to repeated interview requests. But his impact is also acknowledged by David Marx, a litigation partner at McDermott, Will & Emery who runs the Chicago firm’s antitrust practice. Spratling “pushed for bigger cases and international cooperation and converted Justice’s corporate amnesty provision into [a] ‘business development program’ [for] the antitrust division,” says Marx. Prosecutors also became more aggressive in using sophisticated investigative techniques, including undercover operations, during Spratling’s tenure, Marx adds. “It has always been a challenge to get convictions on testimony of coconspirators, but it’s much easier to create doubt where there’s a videotape-especially since evidence is not disclosed until trial,” Marx notes. Despite Spratling’s departure, the Justice Department has continued to seek-and win-substantial penalties for antitrust crimes. As Laing says, “the door is now open, and it’s not closing anytime soon.” In last year’s Sotheby’s-Christie’s art auction price-fixing case, for example, Alfred Taubman was fined $7.5 million and sentenced to a year and a day in prison. According to Griffin, who worked on the case, “Criminal prosecution remains the highest priority in the [antitrust] division, with close to 40 percent of lawyers involved in criminal investigations full-time.” There’s also a growing trend to prosecute individuals for cartel activities and for price-fixing schemes at companies based abroad. Almost 70 percent of the companies charged by the antitrust division last year were foreign-based, and approximately 33 percent of the individual defendants were foreign nationals. The United States has also entered into a number of treaties specifically related to mutual assistance in recent years, and foreign jurisdictions are increasingly adopting the aggressive posture of the Justice Department. Get Early Advice, Take Quick Action Closer government scrutiny has led businesses to adopt a variety of new practices to protect themselves. Baker & McKenzie’s Laing says that some companies are seeking advice before problems arise, such as requesting informational seminars about antitrust issues for their sales and marketing divisions. Executives are also being told to take quick action if they learn that their companies are the targets of government investigations. That includes ordering an immediate internal review to determine if actual wrongdoing has taken place, and whether the company should exercise the “first mover advantage” made possible by the Justice Department’s amnesty program. As McDermott’s Marx says: “It’s not too late to protect yourself if you do it early in the game, especially if your business is one of the first in an industry to be targeted.”

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