On March 3, 2023, Assistant Attorney General (“AAG”) Kenneth A. Polite announced revisions to two Department of Justice (the “DOJ”) Criminal Division policies and the launch of a new pilot program, as well as a forthcoming re-issuance of the FCPA Resource Guide in Spanish later this month. His announcement follows a speech by Deputy Attorney General (“DAG”) Lisa O. Monaco the day before previewing the policy changes. In parallel, the DOJ published (1) a new Compensation Incentives and Clawback Pilot Program (the “Pilot Program”), (2) revised Evaluation of Corporate Compliance Programs (“ECCP”) guidance, and (3) a revised Memorandum on the Selection of Monitors in Criminal Division Matters (the “Corporate Monitor Memorandum”).Continue Reading Department of Justice Announces Revisions to Criminal Division Policies
DOJ and SEC Charge Healthcare Executive With Insider Trading Through a Rule 10b5-1 Trading Plan, Marking DOJ’s First Such Indictment
On March 1, 2023, the U.S. Department of Justice and the Securities and Exchange Commission announced insider trading charges against Terren Peizer, the CEO and Chairman of a California-based healthcare services company called Ontrak, Inc. (the “Company”) for allegedly selling Company securities while in possession of material, non-public information (“MNPI”) that one of the Company’s major customers was likely to cancel its contract.Continue Reading DOJ and SEC Charge Healthcare Executive With Insider Trading Through a Rule 10b5-1 Trading Plan, Marking DOJ’s First Such Indictment
U.S. Attorney’s Offices Issue Nationwide Corporate Voluntary Self-Disclosure Policy
On February 22, 2023, the Department of Justice announced a new corporate Voluntary Self-Disclosure Policy for U.S. Attorney’s Offices nationwide (the “USAO Policy”).Continue Reading U.S. Attorney’s Offices Issue Nationwide Corporate Voluntary Self-Disclosure Policy
FinCEN Proposes Rule Regarding Access to Beneficial Ownership Information under the Corporate Transparency Act
On December 15, 2022, the Financial Crimes Enforcement Network (“FinCEN”) of the Department of the Treasury announced a Notice of Proposed Rulemaking (the “Access Rule NPRM”) to implement the requirements of the Corporate Transparency Act (“CTA”) with respect to access to beneficial ownership information (“BOI”) reported to FinCEN under the CTA. The Access Rule NPRM would implement the CTA’s provisions on who may access BOI held by FinCEN, the circumstances under which access may be granted, and the conditions regarding use, security, and oversight of BOI. Separately, it proposes an approach to the use of “FinCEN identifiers” for corporate entities that FinCEN’s final BOI Reporting Rule left unaddressed.Continue Reading FinCEN Proposes Rule Regarding Access to Beneficial Ownership Information under the Corporate Transparency Act
Second Circuit Decision Limits the Ability to Prosecute Instances of Trading on Confidential Government Information
On December 29, 2022, in a closely-watched insider trading case, the Second Circuit decided United States v. Blaszczak (“Blaszczak II”). The Supreme Court in January 2021 had vacated and remanded the Second Circuit’s prior decision in light of Kelly v. United States (also known as the “Bridgegate” decision). On remand, a divided panel of the Second Circuit found that trading on the basis of certain confidential government information related to pending regulation does not give rise to violations of the criminal wire fraud and securities fraud statutes.Continue Reading Second Circuit Decision Limits the Ability to Prosecute Instances of Trading on Confidential Government Information
Accelerated Pace and Increased Regulatory Expectations in Enforcement and Compliance Investigations
The following post was originally included as part of our recently published memorandum “Selected Issues for Boards of Directors in 2023”.
The Securities and Exchange Commission (SEC) and Department of Justice (DOJ) ramped up their enforcement efforts in 2022, often in highly coordinated actions, including with other regulatory agencies such as the Commodity Futures Trading Commission (CFTC), Department of the Treasury’s Office of Foreign Assets Control (OFAC) and Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN). The DOJ also announced major policy changes regarding corporate criminal enforcement and took steps to convey its seriousness in pursuing actions against individual wrongdoers, recidivists and companies that fail to maintain effective compliance programs. The SEC was particularly active, setting its record for civil penalties and continuing its enforcement focus on insider trading, digital assets and Environment, Social and Governance (ESG) disclosures.
To read the full post, please click here.
For a PDF of the full memorandum, please click here
U.S. Department of Justice Announces Revisions to Corporate Criminal Enforcement Policy
Following a speech by Assistant Attorney General Kenneth A. Polite on January 17, 2023, the DOJ issued additional guidance on changes to the Corporate Criminal Enforcement Policy, focused on voluntary self-reporting.
The policy increases, and makes more explicit and concrete, the potential benefits for companies to self-disclose misconduct, cooperate, and remediate, as well as the potential costs for those that fail to do so.
The memorandum provides insights into how DOJ will address voluntary self-reporting by corporations going forward, including the availability of declinations, discounts from the U.S. Sentencing Guidelines, and mechanisms to reward cooperation, especially “extraordinary cooperation” as covered by the updated Corporate Enforcement Policy.
Please click here to read the full alert memorandum.
FDIC Continues Rulemakings Related to Misrepresentation in Advertising: Digital Asset Businesses Still in the Crosshairs
On December 21, 2022, the Federal Deposit Insurance Corporation published a notice of proposed rulemaking elaborating on what constitutes false advertising of deposit insurance for purposes of the Federal Deposit Insurance Act.Continue Reading FDIC Continues Rulemakings Related to Misrepresentation in Advertising: Digital Asset Businesses Still in the Crosshairs
U.S. SEC Enforcement 2022 Year in Review
The U.S. Securities and Exchange Commission recently announced the Division of Enforcement’s results for fiscal year 2022, the first full year for the Division under the leadership of both Chair Gary Gensler and Director of Enforcement Gurbir Grewal.
Results were up from the year before, with a record $4.2 billion in civil penalties reflecting the agency’s goal to see penalties “recalibrated” upward across the board. With several blockbuster corporate settlements, the SEC continued to focus on traditional areas such as investment advisers, broker-dealers, and issuer accounting and disclosure, while also prioritizing individual accountability and suits against “gatekeepers” such as auditors and lawyers. The past year has also been notable for the SEC’s willingness to impose third-party compliance consultants, often with broad mandates, to oversee entity-level improvements. Our analysis of the SEC’s enforcement results provides indications of where the agency may focus in the year to come.
Please click here to read the full alert memorandum.
DOJ Provides Updates on FCPA and Corporate Criminal Enforcement Trends at International Conference on the FCPA
On December 1, 2022, at the American Conference Institute’s 39th International Conference on the Foreign Corrupt Practices Act (“FCPA”) in Washington D.C., Acting Principal Deputy Assistant Attorney General Nicole M. Argentieri (“DAAG Argentieri”) gave a special keynote speech highlighting developments in FCPA enforcement by the Department of Justice (“DOJ” or the “Department”), including with regard to the application of the DOJ’s announcement of corporate criminal enforcement policy priorities in September of this year. DAAG Argentieri focused on several policy changes and enforcement trends and initiatives using examples from this year’s FCPA resolutions and declination, as well as from the Money Laundering and Asset Recovery Section’s Kleptocracy Asset Recovery Initiative. Continue Reading DOJ Provides Updates on FCPA and Corporate Criminal Enforcement Trends at International Conference on the FCPA