Corporate Enforcement

Subscribe to Corporate Enforcement via RSS

The beginning stages of an investigation are often the most critical.  At the outset of any investigation, information is often limited and events are unfolding quickly.  As a result, it is important to develop a clear and adaptable plan that is appropriately scoped, identifies the right team and sets forth the steps that will be taken as part of the investigation.  Having a written plan in place is crucial to making sure that all relevant stakeholders are on the same page about what activities the investigation will include.  It also ensures that the investigation is managed effectively and is guided by a clear set of objectives. …
Continue Reading Dealing with an Investigation: Planning Ahead

Choices made at the outset of a crisis can play a critical role in a company’s ability to maintain future privilege claims. Recent cases highlight the risks of:

1. Sharing privileged communications with third-party consultants;
2. Conducting witness interviews through non-lawyers; and
3. Discussing the crisis with a former employee.
Continue Reading Preserving Privilege in a Crisis

A company faced with a crisis needs to act quickly to assess and determine the scope of any potential liability in order to guide its first response and frame the forthcoming investigation.  Issues overlooked in the early phases of an investigation could prove very costly down the road, limiting options or potentially subjecting a company to greater penalties.
Continue Reading Assessing Risks and Potential Liability in Responding to a Crisis

On May 2, 2019, FINRA proposed new rules to designate “high-risk” firms and strengthen its ability to impose additional obligations on those firms.[1]

  • Proposed Rule 4111 would authorize FINRA to designate “Restricted Firms” based on the number of event disclosures made by the firm and its registered persons. Restricted Firms would be subject to limitations on their operations and could be required to maintain restricted deposits that could only be withdrawn with FINRA’s consent.
  • Proposed Rule 9559 would create an expedited appeals process, including a process for challenging a designation as a Restricted Firm and any obligations imposed.

FINRA expects that only a small number of large firms (500 or more registered representatives) would be affected by the proposed rules, and that only zero to two would have been impacted in any given year had the rules been effective from 2013-2018.[2]

Early signals from FINRA about this rulemaking generated concern that the standards would be overly subjective, leading to uncertainty in application.  We believe, however, that the proposed rules on balance reflect a reasonable, and largely objective, approach given FINRA’s stated goal to “impose tailored obligations” on those firms that “present heightened risk of harm to investors.”[3]
Continue Reading FINRA Proposes Rules Targeting Firms With History of Misconduct

On May 2, 2019, the U.S. Department of the Treasury’s Office of Foreign Assets Control released “A Framework for OFAC Compliance Commitments”, providing general guidance on the elements OFAC considers to compose an effective sanctions compliance program.

Broadly, the framework endorses a risk-based approach to compliance (recognizing that no two compliance programs will…

As discussed in our most recent blog post, on April 30, 2019, the Criminal Division of the U.S. Department of Justice (“DOJ” or “the Department”) announced updated guidance for the Criminal Division’s Evaluation of Corporate Compliance Programs (“the Guidance”).  The Guidance is relevant to the exercise of prosecutorial discretion in conducting an investigation of a corporation, determining whether to bring charges, negotiating plea or other agreements, applying sentencing guidelines and appointing monitors.[1]  The Guidance focuses on familiar factors: the adoption of a well-designed compliance program that addresses the greatest compliance risks to the company, the effective implementation of the company’s compliance policies and procedures, and the adequacy of the compliance program at the time of any misconduct and the response to that misconduct.  The Guidance makes clear that there is no one-size-fits-all compliance program and that primary responsibility for the compliance program will lie with senior and middle management and those in control functions.
Continue Reading DOJ Guidance on Corporate Compliance Programs: A Checklist for Directors

On April 30, 2019, the Criminal Division of the U.S. Department of Justice announced updated guidance for the Criminal Division’s Evaluation of Corporate Compliance Programs (“the Guidance”) in charging and resolving criminal cases.  This memorandum highlights key updates and discusses the themes present across versions of the Guidance.  Overall, this newest version places greater emphasis…

On April 3, 2019, Senator (and Democratic Presidential contender) Elizabeth Warren announced proposed legislation—dubbed the “Corporate Executive Accountability Act”—that would effect a dramatic change in white collar criminal law by permitting prosecution of corporate executives for negligent conduct.  Under traditional criminal law principles, defendants must typically have at least knowledge with respect to the conduct that constitutes the crime.  However, under Senator Warren’s proposed law, executives of large companies could be criminally prosecuted (and fined and/or jailed if convicted) if they are found to have acted negligently in failing to prevent criminal acts committed by the companies they supervise.  The bill is unlikely to be enacted, but it nonetheless represents a significant policy indication from a Presidential candidate.
Continue Reading Senator Warren Proposes Bill to Hold Corporate Executives Criminally Accountable for Negligent Conduct

In a recent speech at the annual ABA White Collar Crime Conference in New Orleans, Assistant Attorney General Brian Benczkowski of the Criminal Division of the Department of Justice (“DOJ”) announced certain changes to the FCPA Corporate Enforcement Policy (“the Enforcement Policy” or “Policy”) to address issues that the DOJ had identified since its implementation.[1]  These and other recent updates have since been codified in a revised Enforcement Policy in the Justice Manual.[2]

The Enforcement Policy, first announced by the DOJ in November 2017, was initially applicable only to violations of the FCPA, but was subsequently extended to all white collar matters handled by the Criminal Division.[3]  The Policy was designed to encourage companies to voluntary self-disclose misconduct by providing more transparency as to the credit a company could receive for self-reporting and fully cooperating with the DOJ.  Among other things, the Enforcement Policy provides a presumption that the DOJ will decline to prosecute companies that meet the DOJ’s requirement of “voluntary self-disclosure,” “full cooperation,” and “timely and appropriate remediation,” absent “aggravating circumstances” – i.e. relating to the seriousness or frequency of the violation.  For more information on the Enforcement Policy, read our blog post explaining it here.
Continue Reading DOJ Updates FCPA Corporate Enforcement Policy

On February 20, 2019, the Paris criminal court found Swiss bank UBS guilty of illegally soliciting French clients and laundering the proceeds of tax fraud, and imposed a record fine of EUR 3.7 billion.

The Paris criminal court (32nd chamber of the Tribunal de grande instance) followed the prosecution’s case, which had requested a fine…