Law Flashcards

Which of the following best describes 'constructive fraud' as distinguished from actual fraud?

Answer: A breach of legal or equitable duty that the law treats as fraudulent regardless of intent to deceive

Constructive fraud involves a breach of fiduciary or legal duty that the law treats as fraudulent without requiring proof of actual intent to deceive.

The statute of limitations for civil RICO claims under federal law is:

Answer: 4 years from discovery of the injury

The Supreme Court established a four-year statute of limitations for civil RICO claims, running from when the plaintiff discovered or should have discovered the injury.

Under Federal Rule of Evidence 404(b), evidence of prior bad acts is generally inadmissible to prove character but may be admissible to prove:

Answer: Intent, knowledge, identity, motive, or absence of mistake

Rule 404(b) permits prior bad act evidence for purposes such as proving motive, opportunity, intent, preparation, plan, knowledge, identity, or absence of mistake or accident.

A grand jury subpoena issued in a federal fraud investigation requires the recipient to:

Answer: Produce documents or testimony as specified, unless a valid privilege applies

Recipients of grand jury subpoenas must comply by producing the requested documents or testimony, though they may invoke valid privileges such as the Fifth Amendment or attorney-client privilege.

Which of the following is considered a 'predicate offense' under the federal money laundering statutes (18 U.S.C. § 1956)?

Answer: Specified unlawful activities (SUAs) such as drug trafficking and fraud

Federal money laundering statutes require that the funds involved proceed from a 'specified unlawful activity' (SUA), which includes drug trafficking, fraud, and over 200 other predicate offenses.

Under the Stored Communications Act (SCA), law enforcement generally must obtain a search warrant to access:

Answer: Email content stored for 180 days or fewer

Following the Sixth Circuit's Warshak decision and subsequent DOJ policy, law enforcement must obtain a warrant to compel disclosure of email content regardless of storage duration.

In securities law, insider trading based on material non-public information violates SEC Rule 10b-5 under which legal theory when a corporate outsider misappropriates information?

Answer: The misappropriation theory

The misappropriation theory holds that a person who misappropriates confidential information from a source to whom they owe a duty of trust violates Rule 10b-5 by trading on that information.