On April 24, 2024, President Biden signed into law H.R. 815, a foreign aid bill containing a provision that doubles the statute of limitations (SoL) for civil and criminal violations of U.S. sanctions and other national security programs from five years to ten years.Continue Reading Statute of Limitations for U.S. Sanctions Violations Extended from Five to Ten years
Criminal Enforcement
SEC Announces FY 2023 Enforcement Results with Second-Highest Penalties on Record
By Robin M. Bergen, Matthew C. Solomon, Tom Bednar, Sarah Choi, Andrea Trespalacios & Justin M. McCoy on
On November 14, the Securities and Exchange Commission announced its enforcement results for the 2023 fiscal year,[1] with case numbers up from fiscal year 2022 and monetary sanctions at the second highest level in the agency’s history, though down significantly from last year’s record highs. In a press release announcing the results, Enforcement Director Gurbir Grewal noted that the past year’s cases demonstrate how the agency “work[s] with a sense of urgency, using all the tools in our toolkit.” This post evaluates how the SEC used its enforcement tools in the past year and surveys the enforcement highlights in key substantive areas.Continue Reading SEC Announces FY 2023 Enforcement Results with Second-Highest Penalties on Record
Department of Justice Announces Revisions to Criminal Division Policies
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.[1] His announcement follows a speech by Deputy Attorney General (“DAG”) Lisa O. Monaco the day before previewing the policy changes.[2] In parallel, the DOJ published (1) a new Compensation Incentives and Clawback Pilot Program (the “Pilot Program”),[3] (2) revised Evaluation of Corporate Compliance Programs (“ECCP”) guidance,[4] and (3) a revised Memorandum on the Selection of Monitors in Criminal Division Matters (the “Corporate Monitor Memorandum”).[5]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
By Matthew C. Solomon, Adam Fleisher, Tom Bednar & Sarah Choi on
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
Second Circuit Decision Limits the Ability to Prosecute Instances of Trading on Confidential Government Information
By Leslie N. Silverman, Victor L. Hou, Adam Fleisher, Robin M. Bergen, Jared Gerber, Tom Bednar & Michael Cinnamon on
On December 29, 2022, in a closely-watched insider trading case, the Second Circuit decided United States v. Blaszczak (“Blaszczak II”).[1] 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
SEC Charges Company Executives with Insider Trading for Allegedly Setting Up 10b5-1 Trading Plan While in Possession of MNPI
By Matthew C. Solomon, Tom Bednar & Sarah Choi on
On September 21, 2022, the Securities and Exchange Commission announced settled insider trading charges against the CEO and the former President and Chief Technology Officer of Cheetah Mobile Inc. (the “Company”), a China-based mobile internet company. The executives allegedly possessed material nonpublic information (“MNPI”) when they set up a trading plan under Rule 10b5-1 of the Securities Exchange Act.
Continue Reading SEC Charges Company Executives with Insider Trading for Allegedly Setting Up 10b5-1 Trading Plan While in Possession of MNPI
SEC and DOJ Charge Employee of Digital Asset Trading Platform and His Associates With Alleged Insider Trading in Digital Assets
By Tom Bednar, Samuel Levander & William S. Dawley on
On July 21, 2022, the Securities and Exchange Commission and the U.S. Attorney’s Office for the Southern District of New York charged Ishan Wahi, a former employee of the digital asset trading platform Coinbase (the “Company”), as well as his brother and friend, with engaging in insider trading ahead of certain of the Company’s digital asset listing announcements (i.e., announcements in which the Company publicly discloses the specific digital assets that it plans to make available for trading on its platform), which allegedly generally increase the value of the relevant digital assets.
Continue Reading SEC and DOJ Charge Employee of Digital Asset Trading Platform and His Associates With Alleged Insider Trading in Digital Assets
Authorities in U.S. Take Steps to Strengthen Enforcement of U.S. Measures Against Russia
U.S. federal and state authorities recently announced actions that are designed to give effect to economic measures taken against Russia and hold accountable those who violate U.S. laws. These developments suggest that U.S. authorities’ focus on enforcing U.S. sanctions and export controls, anticorruption and anti-money laundering laws, and the growing scrutiny of cryptocurrency, will continue. They also point to further coordination and cooperation between authorities in the U.S. and other jurisdictions in investigating and prosecuting violations of their respective laws.
Continue Reading Authorities in U.S. Take Steps to Strengthen Enforcement of U.S. Measures Against Russia
SEC’s “Shadow Trading” Insider Trading Case Allowed to Proceed
By Adam Fleisher, Robin M. Bergen, Matthew C. Solomon, Daniel Montgomery & Tom Standifer on
On January 14, 2022, the United States District Court for the Northern District of California issued a decision in SEC v. Matthew Panuwat[1] validating the legal theory advanced by the Commission that trading in the securities of a competitor company could form the basis of an insider trading violation where the defendant learned that an acquisition of his employer was imminent. In denying the defendant’s motion to dismiss the complaint, the court ruled that the SEC had sufficiently pled a claim, marking the first judicial decision concerning alleged insider trading in securities of a company based on material, nonpublic information (“MNPI”) about another company, a practice that has sometimes been referred to as “shadow trading.” The court’s refusal to dismiss the SEC’s novel legal theory that trading on the basis of MNPI of one company to profit on a securities transaction involving a competitor constitutes actionable insider trading should be considered by companies and individuals as they assess trading decisions and policies.
Continue Reading SEC’s “Shadow Trading” Insider Trading Case Allowed to Proceed
DOJ Announces First Set of Revisions Strengthening Corporate Criminal Enforcement Policies
On October 28, 2021, Deputy Attorney General Lisa O. Monaco announced the administration’s first significant changes to the DOJ’s policies on corporate criminal enforcement, highlighting departures from Trump-era policies. The announcement focused on three corporate enforcement policy developments:
- Individuals and Corporate Misconduct: to be eligible for cooperation credit, companies must provide the DOJ with all
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