Shariah’s Black Box
[381] Azzad Asset Management, Social and Financial Screens, https://azzad.net/new/ethical_screens.aspx (last visited Feb. 2, 2008).
[382] Charles Doyle, CRS Report for Congress, Criminal Money Laundering Legislation in the 109th Congress (2006), available at https://www.house.gov/gallegly/issues/crime/crimedocs/RS22400.pdf (last visited Feb. 2, 2008).
[383] 18 U.S.C. § 1962(a)-(d) (2006); see also Niels B. Schaumann, Gilbert Law Summaries: Securities Regulation 394 (6th ed. 2002).
[384] § 1961(5); see also H.J. Inc. v. Nw. Bell Tel. Co., 492 U.S. 229 (1989) (stating that must show the predicate acts are related to one another and that they amount to, or constitute a threat of, continuing racketeering activity).
[385] See, e.g., § 1961(1)B & G; see also supra note 382.
[386] § 1961(4).
[387] See Schofield v. First Commodity Corp., 793 F.2d 28 (1st Cir. 1986) (discussing criminal respondeat superior under RICO).
[388] § 1963(d); see also § 1956(b)(3)-(4).
[389] § 1963(a)-(c).
[390] While it has not been the purpose of this memorandum to detail the legal risks for the professional facilitators, there is substantial legal exposure for the legal, accounting, and financial professionals who provide the knowledge and expertise to develop the financial and legal instrumentalities of SCF. While “scheme liability” under a Rule 10b-5 private right of action has been put to rest by Stoneridge Inv. Partners, LLC v. Scientific-Atlanta, Inc., 2008 U.S. LEXIS 1091 (U.S. 2008), to the extent that the lawyers get involved in drafting the “representations”, liability will still apply. See Loss & Seligman, supra note 10, at 1329-1332 (discussing “primary liability” for lawyers under Rule 10b-5); id. at 1465-1469 (discussing the “duty to report evidence of a material violation” under Part 205 to Title 17 of the Code of Federal Regulations promulgated by the SEC pursuant to Section 307 of the Sarbanes-Oxley Act of 2002).
[391] This conclusion has been reached by a thorough review of the published proprietary and non-proprietary information disseminated by many of the financial institutions and the professional facilitators (i.e., the law firms, accounting firms, and financial advisors who promote SCF as a business model and marketing niche) and of the published academic and trade journals which have treated SCF in some detail over the past decade. Some of this material will be referenced throughout this memorandum as its relevance to disclosure, due diligence, compliance, industry standards, and best practices are examined.
