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David Sewell

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David Sewell advises banks, nonbank financial institutions, and fintech companies regarding banking law and regulation.

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On March 2, 2023, U.S. Department of Justice Deputy Attorney General (DAG) Lisa Monaco once again delivered groundbreaking remarks at the American Bar Association National Institute on White Collar Crime, this time heralding a new era of corporate enforcement aimed at addressing U.S. national security priorities.  Last spring, as U.S. sanctions against Russia rolled out, DAG Monaco described sanctions as “the new FCPA (Foreign Corrupt Practices Act”)” in terms of DOJ priorities, sending shockwaves through the world of corporate compliance.  Since then, DOJ has borne that promise out largely through an aggressive campaign, championed by Task Force KleptoCapture, as we have previously written about, resulting in a large number of criminal cases targeting individual defendants. 

In this most recent announcement, DAG Monaco set a new tone: announcing that enforcement of national security-related violations—most notably sanctions evasion and export control violations—against corporations would be among the top priorities of the DOJ.  Later in the day, Matthew Axelrod, Assistant Secretary for Export Enforcement within the Department of Commerce, Bureau of Industry and Security (BIS), drove home that point, emphasizing that companies should no longer view export control and sanctions violations as “technical violations,” but would be well advised to view them as enterprise risks given the prioritization these issues are receiving within the various government enforcement agencies, including the DOJ.  Further highlighting this new landscape, the Department of Treasury Office of Foreign Assets Control (OFAC) spoke at the ABA White Collar Conference for the first-time ever on March 2 and the DOJ, BIS and OFAC issued their first-of-its kind joint compliance guidance the same day, relating to third party-intermediary risks. 

It was a day filled with sea-changing announcements for sanctions and export control enforcement, but the takeaway was simple: Sanctions and export controls really are the new FCPA in terms of corporate enforcement priorities and related compliance expectations.  The Money Laundering and Asset Recovery Section (MLARS) has already begun conducting sanctions- and export-related investigations.…

Continue Reading DOJ to Prioritize Enforcement of Sanctions and Export Control Violations Against Corporations

On September 29, 2022, the Department of the Treasury’s Financial Crimes Enforcement Network (“FinCEN”) issued its highly anticipated Final Rule implementing the beneficial ownership information (“BOI”) reporting requirements of the Corporate Transparency Act (“CTA”) legislation. The Final Rule brings about the most significant revisions to the U.S. anti-money laundering/countering the financing of terrorism (“AML/CFT”) compliance framework in more than 20 years, implementing sweeping beneficial ownership disclosure requirements applicable to all U.S. companies and foreign companies doing business with or within the U.S.

The Final Rule generally tracks FinCEN’s earlier Proposed Rule from December 7, 2021, discussed in our prior article here, although there have been a few amendments to the earlier proposal. Below we provide a brief summary of key provisions and takeaways from the Final Rule, which goes into effect on January 1, 2024.…

Continue Reading FinCEN Issues Highly Anticipated Final Rule on Beneficial Ownership Reporting under the Corporate Transparency Act

The U.S. Treasury is taking a fresh look at requiring investment advisers to meet the same standards as banks and broker-dealers, including potentially subjecting investment advisers to the BSA/AML compliance and reporting requirements that apply to other types of financial institutions. …
Continue Reading U.S. Treasury Renews Focus on AML Risks for Investment Advisors

On April 14, 2022, the Financial Crimes Enforcement Network (FinCEN) issued an advisory focusing on detecting kleptocrats (i.e., government officials who appropriate national resources for personal gain) and the proceeds of foreign public corruption and preventing them from entering the U.S. financial system. This guidance is the latest in a series of advisories FinCEN has issued focusing on Russian kleptocracy, and is part of a broader strategic initiative among key U.S. and global law enforcement and regulatory agencies focusing on corruption and money laundering as critical national security risks. In particular, the advisory highlights the enhanced focus of U.S. enforcement resources on the attempts of Russian oligarchs to evade sanctions imposed by the United States and its allies in response to Russia’s invasion of Ukraine.

U.S. law enforcement and regulatory agencies have high expectations as to the compliance efforts U.S. companies will adopt to meet this moment. Enforcement against companies and individuals involved in missteps is likely to be aggressive and robustly resourced. Indeed, the Department of Justice (DOJ) announced on April 6, 2022, in connection with the unsealing of an indictment of a Russian oligarch charged with U.S. sanctions violations, that it will “work relentlessly to counter Russian aggression, including by enforcing U.S. sanctions law.”…
Continue Reading As Russia Sanctions Mount, FinCEN Issues Advisory on Kleptocracy and Foreign Public Corruption

Through a series of recent public comments, top leadership from the Consumer Financial Protection Board (“CFPB”) is warning that the agency is poised to play an increasingly affirmative role in the oversight of new payments systems, including the technologies and technology companies involved. First, CFPB Director Rohit Chopra told federal lawmakers that “the desire of Big Tech to gain greater control over the flow of money in the economy raises a number of questions.” Director Chopra’s comments make clear that his agency is stepping up its regulatory scrutiny of large technology firms as well as more traditional participants in the consumer finance industry, such as banks and mortgage companies. Just days later, Director Chopra issued a statement reiterating his concerns about the role of large technology companies in consumer finance and further declaring that the CFPB is “actively monitoring” and preparing for a broader consumer adoption of cryptocurrencies. Commenting specifically on the Report on Stablecoins issued by the President’s Working Group on Financial Markets, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation, Director Chopra stated that the use cases for stablecoins in retail payments, consumer deposits, stored value instruments, and others “trigger obligations under federal consumer financial protection laws,” including the prohibition of unfair, deceptive, or abusive acts or practices. These comments and others by the CFPB lead many to conclude that a more aggressive enforcement approach across industries is likely to follow.

As a starting point, Director Chopra indicated that the CFPB is examining the following questions regarding tech firms’ role in real-time consumer payments:

  • How will these firms harvest and monetize data they collect on consumer transactions?
  • What criteria will the firms use to decide who is removed from the platform?
  • How will they ensure that payment systems adhere to consumer protections?
  • Will Big Tech giants have an incentive to impede the entry of new firms seeking to offer competitive products and services?

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Continue Reading Consumer Protection Regulator Signals Increased Scrutiny of Payments Systems and Tech Companies