As this blog has previously noted, the Coronavirus pandemic, like other crises before it, is likely to increase prosecutions for fraud, particularly under the Payment Protection Program (“PPP”) created by the federal government’s Coronavirus stimulus packages. Two new prosecutions announced by the Department of Justice mark some of the first prosecutions under the PPP, and signal where and how the government will be looking for wrongdoing. Continue Reading Prosecutions Related to Coronavirus Stimulus Begin
Companies seeking PPP loans must concurrently navigate the potential minefield of public scrutiny and government enforcement, requiring a heightened level of planning and procedures.
An adequate compliance program is a must to avoid ramped-up enforcement efforts and to minimize legal and reputational risks.
Reproduced with permission. Published May 1, 2020. Copyright 2020 The Bureau of National Affairs, Inc. 800-372- 1033. For further use, please visit http://www.bna.com/copyright-permission-request/
On April 14, 2020, the U.S. Department of Justice made a long-awaited move towards enhanced transparency into the corporate compliance monitorship selection process in launching a new webpage that lists the names of all independent compliance monitors for the Fraud Section’s thirteen active monitorships. Seven of the active monitorships are associated with the FCPA Unit, five with Market Integrity and Major Frauds, and one with Health Care Fraud.
The move to publish names comes after years of criticism–and in some cases, litigation–surrounding the confidentiality of DOJ’s selection process. As reported previously on this blog, in March 2018, a D.C. federal judge ordered the Department of Justice to turn over the names of prospective monitors nominated to oversee the corporate compliance programs of fifteen companies found to be in violation of the FCPA. While recognizing that these individuals have “more than a de minimis privacy interest in their anonymity,” the court found that any such privacy interest was outweighed by the public’s interest in learning their identities. Prior to that, in the Fall of 2016, a federal district court in the Southern District of New York appointed its own monitor, rejecting the three candidates proposed by the government and the defendant company. The court concluded that two of the three candidates were under-qualified and had not been fully vetted (one was a full-time law student).
The U.S Department of Justice recently asked Congress to grant it emergency powers as the coronavirus outbreak begins to affect the timing of court proceedings and DOJ’s ability to conduct investigations. Perkins Coie attorneys explore DOJ’s request and the pandemic’s effects on the practice of white-collar criminal defense.
When administrators of colleges and universities first learn of misconduct, abuse, or neglect allegations within their communities—especially those involving wrongdoing committed by beloved mentors or authority figures within the institution—it is critical that the institution react swiftly and thoughtfully by conducting appropriately-scaled, rigorous, and credible investigations. Such investigations are primarily focused on establishing what factually transpired. But, it is equally paramount to ensure that college and university communities have confidence in the integrity of the actions taken by their institutions—both to address past harm and to ensure proper remediation and future security.
In this article, we have identified four guideposts designed to help colleges and universities steer themselves, and their communities, through such moments of crisis. Although it is impossible to create a one-size-fits-all approach appropriate for any given situation, our experience leading sensitive and highly scrutinized independent investigations at colleges and universities across the country may be instructive in implementing several key principles that can be adapted to a variety of institutional crises.
Reproduced with permission. Published March 30, 2020. Copyright 2020 The Bureau of National Affairs, Inc. 800-372- 1033. For further use, please visit http://www.bna.com/copyright-permission-request/
Authored by T. Markus Funk, Hon. Virginia M. Kendall of the U.S. District Court for the Northern District of Illinois.
As the COVID-19 pandemic ravages communities across the globe, we are witnessing an unprecedented spike in demand for immediate supplies to quarantined citizens, medical workers, and governmental agencies struggling to flatten the curve.
Sadly, we have learned from history that national crises and natural disasters—and the supply chain disruptions that accompany them—offer the most fertile ground for those in the business of exploiting workers.
It, therefore, is critical that companies, during these challenging times redouble their supply chain vigilance and ward off the potentially business-ending scrutiny once normalcy returns.
Reproduced with permission. Published March 27, 2020. Copyright 2020 The Bureau of National Affairs, Inc. 800-372- 1033. For further use, please visit http://www.bna.com/copyright-permission-request/
In this time of supreme uncertainty, companies have many urgent concerns. Recent actions by the Department of Justice give businesses another thing to focus on: investigations and enforcement relating to fraud, waste, and abuse sure to trail in the wake of Covid-19 relief.
Even if your company does not receive funds specifically tied to the federal government’s response to the Covid-19 outbreak, you should bear in mind the risks of potential exposure to fraud allegations.
Reproduced with permission. Published March 24, 2020. Copyright 2020 The Bureau of National Affairs, Inc. 800-372- 1033. For further use, please visit http://www.bna.com/copyright-permission-request/.
Attorneys counseling companies on white collar matters are likely to have discovered crimes such as theft, bribery, and embezzlement committed by current and former employees, as well as by competitors. Such bad acts (and bad actors) are not regularly reported to law enforcement.
In fact, what prevents more widespread reporting is the understandable fear that the “whistleblowing” company—or individual—may face civil exposure for, say, defamation or tortious interference, not to mention the potential negative publicity accompanying such law enforcement outreach.
Reproduced with permission. Published March 20, 2020. Copyright 2020 The Bureau of National Affairs, Inc. 800-372- 1033. For further use, please visit http://www.bna.com/copyright-permission-request/
The CFTC filed a record number of enforcement actions in 2019 against market participants, the majority of which involved commodities fraud, market manipulation, and spoofing. As a result of these actions, the CFTC reports that it obtained over $1.3 billion in monetary sanctions and disgorgement in 2019—a 39% increase over the prior fiscal year. And at this year’s ABA Derivatives & Futures Law Committee Winter Meeting, regulators from the CFTC and ICE warned market participants to expect these enforcement trends in spoofing and market manipulation to continue into 2020.
CFTC Seeks Parallel Enforcement with Market Regulators, but Coordinated Resolutions Scarce
The CFTC’s Chief Counsel of the Division of Enforcement, Gretchen Lowe, commented that protecting market integrity continues to be a top priority at the CFTC. She noted that Enforcement is particularly focused on spoofing and market manipulation, as well as matters involving regulatory infractions, such as registrants’ reporting obligations, failure to supervise, business conduct standards, and adequacy of remediation efforts.
Lowe also signaled that Enforcement will continue to pursue “parallel cooperative enforcement efforts” with both domestic and foreign market regulators—including SROs and criminal enforcement authorities in the spoofing context. ICE Futures U.S. Enforcement Counsel, Frances Mendieta reinforced that the lines of communication are “very open” between ICE and the CFTC, and that the regulators may share information with each other over the course of an investigation.
However, despite such extensive interplay between the regulators, coordinated or “global” resolutions appear to be the exception, rather than the rule. Both Lowe and Mendieta suggested that the sequential nature of the regulators’ respective investigations can make it difficult to coordinate settlements. Consequently, while regulators seem keen to build on each other’s investigations, the resolutions often occur months, or sometimes years apart, which can leave market participants in protracted cycle of enforcement involving the exact same conduct. Continue Reading CFTC, Market Regulators Forecast Aggressive Enforcement Trends, High Bar for Cooperation
The U.S. Commodity Futures Trading Commission’s (CFTC) Director of the Division of Swap Dealer & Intermediary Oversight (DSIO), alongside fellow panelist and National Futures Association’s (NFA) General Counsel, fielded wide-ranging questions from co-panelists and audience members alike in a discussion focused on Intermediaries & Advisors at the ABA’s Derivatives & Futures Law Committee Winter Meeting in Naples, Florida (January 23-25, 2020). Chief among the topics addressed were views regarding DSIO and NFA’s evolving approach to swap dealer oversight, particularly on the heels of DSIO’s recently issued guidance on the Chief Compliance Officer Annual Report for futures commission merchants, swap dealers, and major swap participants. Continue Reading DSIO and NFA Share Views on Evolving Swap Dealer Oversight