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Jonathan S. Kolodner’s practice focuses on white-collar criminal enforcement and regulatory matters as well as complex commercial litigation.

On August 24, 2018, the Second Circuit in United States v. Hoskins issued a decision limiting the FCPA’s reach, holding that foreign nationals who cannot be convicted as principals under the FCPA also cannot be held liable for conspiring to violate or aiding and abetting a violation of the statute. The decision, written by Judge Pooler (joined by Chief Judge Katzmann and Judge Lynch, who also wrote a concurring opinion), concluded that, due to affirmative legislative policy and extraterritoriality concerns, the FCPA’s reach cannot be extended via conspiracy or complicity liability to implicate individuals who cannot violate the FCPA as principals. Although the decision limits the government’s ability to prosecute foreign nationals for conspiring to commit or aiding and abetting a violation of the FCPA, practically speaking, the decision will apply only to a small class of foreign nationals and entities – those who engaged in a bribery scheme in which there is otherwise jurisdiction under the FCPA, but who are not themselves subject to the FCPA’s jurisdiction. That said, the ruling is significant as one of the few cases limiting the FCPA’s jurisdiction due to the statute’s unique, extraterritorial nature, which may encourage charged defendants in other cases to challenge the DOJ’s broad interpretation of its jurisdiction.

Please click here to read the full alert memorandum.

DOJ has expanded its efforts to give more concrete guidance to companies facing FCPA risk to M&A transactions and the question of successor liability.  In a speech on July 25, 2018, at the American Conference Institute’s 9th Global Forum on Anti-Corruption Compliance in High Risk Markets, Deputy Assistant Attorney General Matthew S. Miner highlighted DOJ’s views on successor liability for FCPA violations by acquired companies.[1]  Miner sought to clarify DOJ’s policy regarding the voluntary disclosure of misconduct by successor companies and to highlight the benefits of such disclosure as spelled out in the joint DOJ and SEC FCPA Resource Guide (the “Resource Guide”).[2]  In general, as with other recent pronouncements and actions by DOJ, such as the FCPA Corporate Enforcement Policy,[3] Miner’s speech seemed intended to highlight ways in which firms can gain cooperation credit (up to and including a declination) in FCPA investigations. Continue Reading DOJ Remarks Provide Guidance on Addressing FCPA Risk in M&A Transactions

On July 11, 2018 the U.S. Department of Justice (“DOJ”), Bureau of Consumer Financial Protection (“CFPB”), the Securities and Exchange Commission (“SEC”) and the Federal Trade Commission (“FTC”) announced the establishment of a new Task Force on Market Integrity and Consumer Fraud (the “Task Force”).[1]  Deputy Attorney General Rod Rosenstein made the announcement on behalf of the Task Force, joined by Acting Director Mick Mulvaney of the CFPB, Chairman Jay Clayton of the SEC and Chairman Joe Simons of the FTC. Continue Reading DOJ Announces New Inter-Agency Task Force on Market Integrity and Consumer Fraud

On June 27, 2018, Equifax Inc., the credit reporting agency, agreed to implement stronger data security measures under a consent order with the New York State Department of Financial Services (“NYDFS”) and seven other state banking regulators.[1]  The order imposes detailed duties on Equifax’s Board of Directors in response to criticisms raised by the regulators during an examination of Equifax’s cybersecurity and internal audit functions.  The examination followed the company’s massive 2017 data breach, which exposed sensitive personal information of nearly 148 million customers.  Equifax agreed to the order without admitting or denying any charges of “unsafe or unsound information security practices.” Continue Reading State Regulators Reach Settlement With Equifax in Connection With Massive Data Breach

On June 22, 2018, the United States Supreme Court decided Carpenter v. United States, in which it held that the government must generally obtain a search warrant supported by probable cause before acquiring more than seven days of historical cell-site location information (“CSLI”) from a service provider. Noting “the deeply revealing nature of CSLI, its depth, breadth, and comprehensive reach, and the inescapable and automatic nature of its collection,” the Court held that an individual “maintains a legitimate expectation of privacy in the record of his physical movements captured through CSLI” that warrants Fourth Amendment protection. While the Court sought to construe its decision narrowly, the reasoning of the majority and Justice Gorsuch in his dissent raise significant questions about whether and to what extent individuals may have a reasonable expectation of privacy or possessory interest in other sensitive personal data held by third parties beyond the CSLI at issue in Carpenter.

Please click here to read the full alert memorandum.

On June 13, 2018, in its latest decision in a long-running litigation, the U.S. District Court for the District of Columbia considered the applicability of certain exemptions under the Freedom of Information Act (“FOIA”) to documents sought by journalists relating to the actions of the independent compliance monitor that Siemens AG was required to retain under the terms of its 2008 plea agreement for violations of the Foreign Corrupt Practices Act (the “FCPA”).  Broadly speaking, although the court concluded that portions of the documents that related to Siemens’ business operations and the DOJ’s analysis of the monitor’s activities were exempted from disclosure, the court also required the DOJ to produce other portions of those materials and to reevaluate, based on the court’s decision, whether additional materials had to be disclosed.  The decision, and the lengthy litigation over the application of FOIA to these materials, highlight the complexity of identifying the boundaries of the FOIA protection applicable to the typically sensitive and confidential information companies provide to compliance monitors and the risk that such information later will have to be disclosed once it is in the hands of the government.  Continue Reading Recent District Court Decision on Applicability of FOIA to Siemens FCPA Monitorship Documents Provides Guidance on Scope of Possible Disclosures

On May 9, Deputy Attorney General Rod J. Rosenstein provided remarks at the American Conference Institute’s 20th Anniversary New York Conference on the Foreign Corrupt Practices Act and announced a new policy designed to promote coordination and limit the imposition of multiple penalties on a company for the same conduct, which he referred to as “piling on.”

This memorandum highlights some of the most salient points from Rosenstein’s remarks, and describes the key elements of the new policy, with an eye towards potential implications for enforcement actions going forward.

On April 25, 2018, a jury in the United States District Court in Connecticut acquitted former UBS AG (“UBS”) trader Andre Flotron of conspiring to manipulate the precious metals futures market through “spoofing.”  The verdict, the first acquittal in a criminal spoofing-related case since the practice was outlawed by the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) in 2010, reflects the difficulties the government faces in cracking down on the practice. Continue Reading Acquittal of Former UBS Trader Signals Potential Challenges for Government’s Anti-Spoofing Initiative

On March 1, 2018, U.S. Department of Justice (“DOJ” or the “Department”) officials announced that the Criminal Division is expanding the applicability of a policy that encourages corporate self-reporting and cooperation for violations of the Foreign Corrupt Practices Act (“FCPA”) to reach other types of non-corruption criminal cases.  Speaking at the American Bar Association’s National Institute on White Collar Crime in San Diego, John Cronan, Acting Assistant Attorney General for the DOJ Criminal Division, and Benjamin Singer, Chief of the DOJ Securities and Financial Fraud Unit, told attendees that the Criminal Division will apply the FCPA Corporate Enforcement Policy (the “FCPA Enforcement Policy”) as nonbinding guidance in cases other than FCPA cases.

The FCPA Enforcement Policy, which was adopted in November 2017, provided additional guidelines regarding the credit the Department will provide to companies that self‑report FCPA violations and then cooperate with the resulting investigation – including a presumption that self-reporting companies will not be criminally charged.  Expanding use of the FCPA Enforcement Policy signals the Department’s perception of its success and a further effort by DOJ to encourage companies to self-report and cooperate.  It also provides important guidance for companies faced with a variety of different types of investigations regarding the treatment they can expect, and tools to advocate before the Department for more favorable resolutions. Continue Reading DOJ Announces Expansion of Approach Encouraging Self Reporting and Cooperation

In December 2017, the US Department of Justice, Criminal Division’s Computer Crime and Intellectual Property Section (“DOJ”) released guidance for law enforcement to follow when seeking data stored by an entity with a cloud service provider.[1]  In short, DOJ suggests that prosecutors should seek data directly from the company, rather than its cloud service provider, so long as doing so will not compromise the investigation. Continue Reading New DOJ Guidelines on Collecting Cloud–Based Data