USA – NEW YORK Trends and Developments Contributed by: Temidayo Aganga-Williams, Selendy Gay PLLC
Introduction New York has always played a distinct role in financial crime. It is where the money, the institutions and the most aggressive prosecutors are. New York’s influ - ence extends beyond its own cases and the gov - ernment’s actions taken here often reshape how the country polices financial markets. The past year has been a striking example of that pat - tern in action. The four developments examined here were not selected because they are exhaustive. They were selected because they are illustrative. Begin - ning in late 2025, Manhattan prosecutors dusted off a three-decade-old law that treats corporate fraudsters the same way the government treats drug lords and used it against sitting executives. Manhattan prosecu - tors also unveiled a disclosure programme for compa - nies that come clean about financial crimes, offering new terms. The Justice Department in Washington put out its own version weeks later. Manhattan prosecu - tors also filed the first-ever criminal case for trading on insider information in a prediction market, a boom - ing industry that had assumed it existed beyond the reach of federal law. And New York’s financial regula - tors continued to hold the crypto industry to stand - ards demanding enough that global firms must either comply or walk away from one of the world’s most lucrative markets. Each of these developments tells a story on its own. Taken together, they point to something larger: New York, per usual, is not waiting for Washington to set the agenda on financial crime. It is setting the agenda itself. New York’s Stick: the Return of the “Financial Kingpin” Statute For over three decades, one of the federal govern - ment’s most powerful weapons against financial crime sat largely unused, gathering dust on the shelf. The Continuing Financial Crimes Enterprise (“CFCE”) statute, enacted in 1990 in the aftermath of the sav - ings and loan crisis and modelled deliberately on the drug-trafficking Kingpin Statute, carries a mandatory minimum of ten years and a maximum of life imprison - ment. It was designed to be devastating. And then, for reasons that had more to do with prosecutorial habit than legal obstacles, it was almost never used.
That recently changed in New York. In just six weeks spanning late 2025 and early 2026, the US Attorney’s Office for the Southern District of New York (“USAO- SDNY”) unsealed two separate indictments charging corporate executives under the CFCE – the first such charges in more than a decade. The two cases were strikingly different in industry but identical in structure: executives at the top of organisations who allegedly used their positions to run sophisticated, multi-year fraud schemes involving falsified financial statements, manipulated collateral and teams of subordinates who either participated or looked the other way. In the first case, former Tricolor Holdings CEO Dan - iel Chu and former COO David Goodgame were charged with repeatedly defrauding lenders using various schemes, including “double-pledging” col - lateral to multiple lenders, overstating collateral by approximately USD800 million and causing hundreds of millions in losses. Weeks later, former First Brands Group CEO Patrick James and his brother Edward James, a former senior vice president, were charged with fraudulently inflating invoices, pledging collateral multiple times and falsifying financial statements to trick lenders into giving them billions of dollars. These are not abstract legal manoeuvres. The CFCE requires prosecutors to prove that a defendant organ - ised, managed or supervised a continuing criminal enterprise and that the fraud was not a lapse or a rogue act, but a systematically run operation. By charging it, New York prosecutors are sending a message that goes far beyond the individual defendants: Executives who treat their organisations as personal fraud vehi - cles will be treated not as typical white-collar offend - ers but as criminal kingpins. Further, under the current Administration’s policy of charging the most serious, readily provable offence, the CFCE may frequently be the most serious charge available in major fraud cases and prosecutors can be expected to reach for it. When they do, it will reshape the calculus for every executive who finds themselves in the crosshairs of a financial fraud investigation. New York’s Carrot: SDNY’s Voluntary Self- Disclosure Programme Not long after unsealing the above indictments, on 24 February 2026, US Attorney Jay Clayton announced
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