In a decision with potentially far-reaching implications, Alasaad v. Mayorkas, Nos. 20-1077, 20-1081, 2021 WL 521570 (1st Cir. Feb. 9, 2021), the First Circuit recently rejected First and Fourth Amendment challenges to the U.S. government agency policies governing border searches of electronic devices. These policies permit so-called “basic” manual searches of electronic devices without any articulable suspicion, requiring reasonable suspicion only when officers perform “advanced” searches that use external equipment to review, copy, or analyze a device. The First Circuit held that even these “advanced” searches require neither probable cause nor a warrant, and it split with the Ninth Circuit in holding that searches need not be limited to searches for contraband, but may also be used to search for evidence of contraband or evidence of other illegal activity. This decision implicates several takeaways for company executives entering and leaving the United States, particularly if they or their employers are under active investigation. In-house counsel in particular should consider the implications of the decision given obligations of lawyers to protect the confidentiality of attorney-client privileged information.
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Corporate Advisory
A Playbook for Corporate DOJ Investigations
Corporate investigations under the Biden Administration’s Department of Justice (“DOJ”) are expected to increase in the coming months. Navigating such investigations can be complex, distracting, and costly, and comes with the risk of prosecution and significant collateral consequences for the company. Recently, Cleary Gottlieb partners and former DOJ prosecutors, Lev Dassin, Jonathan Kolodner, and Rahul…
SEC Chief Accountant Weighs in on Accounting Issues During the COVID-19 Outbreak
On April 3, 2020, the SEC’s Chief Accountant, Sagar Teotia, issued a Statement on the Importance of High-Quality Financial Reporting in Light of the Significant Impacts of COVID-19 (the “OCA Statement”). The OCA Statement emphasizes that while the SEC Office of the Chief Accountant (“OCA”) appreciates the challenging environment that companies and their auditors face in attempting to comply with their financial reporting obligations due to COVID-19[1], and will not second-guess their reasonable judgments, OCA expects financial reporting to continue to “provide investors with high-quality financial information.” The OCA Statement also reaffirms OCA’s views on the importance of gatekeepers by pointing out the critical need for auditor independence in this uncertain economic environment. In addition to this general theme, the OCA Statement contains several notable points that will have implications for companies in the current situation, both in preparing their financial statements, and in taking steps to mitigate litigation and enforcement risk.
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