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Introduction

Whistleblower programs have proliferated and been growing in importance in the criminal and regulatory enforcement landscape globally.  In this three-part series, we first discuss recent developments in whistleblower programs in the United States.  Second, we review whistleblower initiatives in other non-U.S. jurisdictions over the past year.  Third, we address how developments in whistleblower programs impact corporations.Continue Reading Whistleblowing in Focus: Recent Developments, Emerging Issues, and Considerations for Companies. Part One: Developments in the U.S.

On December 20, 2024, the Securities and Exchange Commission (the “SEC”) adopted amendments to Exchange Act Rule 15c3-3 (the “Customer Protection Rule”) to require carrying broker-dealers with $500 million or more in average total credits to perform the customer and PAB (i.e., proprietary accounts of broker-dealers) reserve account computations and make any required deposits daily, rather than weekly (the “Final Rules”).  Approved by a 4-1 vote,[1] the Final Rules included several changes from the proposed rules, which we discussed in our prior Blog Post.Continue Reading SEC Adopts Rules Requiring Daily Computation of Customer and PAB Reserve Requirements for Certain Broker-Dealers

On December 26, the U.S. Court of Appeals for the Fifth Circuit vacated the previous grant of a stay of the injunction enjoining enforcement of the Corporate Transparency Act (CTA) and beneficial ownership reporting rule.  As a result, the nationwide preliminary injunction originally granted by the district court is once again in effect pending consideration of the DOJ’s appeal by the Fifth Circuit’s merits panel.Continue Reading Fifth Circuit Reinstates CTA Injunction Pending Oral Arguments in March; FinCEN January 13 Deadline on Hold

In our prior notes of December 4, 9, and 13, 2024, we reported that (1) a district court in Texas issued a nationwide injunction halting implementation of the Corporate Transparency Act (CTA), (2) the Financial Crimes Enforcement Network (FinCEN) acknowledged that companies need not file CTA mandated disclosures while that injunction remained in effect. Subsequently, the U.S. Department of Justice (DOJ) moved to stay the injunction pending appeal. The district court rejected that motion, but on December 23, 2024, the United States Court of Appeals for the Fifth Circuit granted the government’s motion, staying the district court’s injunction and expediting briefing of the appeal. In so doing, the Court concluded that the government had “made a strong showing that it is likely to succeed on the merits in defending CTA’s constitutionality.” In addition, the Court rejected the plaintiffs’ warnings that “lifting the . . . injunction days before the compliance deadline would place an undue burden on them,” reasoning that the plaintiffs filed suit only months ago and the injunction had been in place mere weeks, whereas businesses have had “nearly four years . . . to prepare since Congress enacted the CTA, as well as the year since FinCEN announced the reporting deadline.”Continue Reading Fifth Circuit Pauses District Court CTA Injunction; FinCEN Extends Filing Deadline to January 13, 2025

As outlined in our prior update, on December 3, 2024, a Texas federal district court issued a preliminary injunction that temporarily blocks the Corporate Transparency Act (CTA) and its implementing regulations from taking effect nationwide. Continue Reading DOJ Appeals CTA Injunction; FinCEN Suspends Filing Requirement

We want to make you aware that yesterday, a Texas federal district court issued a nationwide preliminary injunction temporarily blocking the effectiveness of the Corporate Transparency Act (CTA) and its implementing regulations, which require certain companies (including certain non-U.S. companies registered to conduct business in the United States) to disclose beneficial ownership information to the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury.Continue Reading Federal District Court Enjoins Enforcement of U.S. Corporate Transparency Act

On November 22, the Securities and Exchange Commission announced its enforcement results for the 2024 fiscal year with a record $8.2 billion in financial remedies.[1]  At the same time, a few cases and sweeps comprised the vast bulk of that amount, and the number of cases brought dropped by 26%.  In a press release announcing the results, Acting Enforcement Director Sanjay Wadhwa touted the agency’s “high impact enforcement actions” and noted “stepped up efforts” by market participants to self-report their own potential wrongdoing, cooperate in SEC investigations, and remediate any shortcomings.  Chair Gary Gensler, who recently announced he will step down at the start of the next Trump presidency, described the Enforcement Division as a “steadfast cop on the beat.”  Set forth below are key highlights on enforcement trends from the past year, as well as predictions for what the next year may hold under a new administration.Continue Reading SEC FY 2024 Enforcement Results: Record Dollars But Many Fewer Cases

On November 14, 2024, the U.S. Department of Justice (“DOJ”) Antitrust Division (the “Division”) released guidance for the Evaluation of Corporate Compliance Programs in Criminal Antitrust Investigations (the “Guidance”). The Guidance will be used by the Division in assessing the adequacy and effectiveness of a company’s antitrust compliance program when making a charging or resolution decision.[1]Continue Reading DOJ Antitrust Creates Guidance for Evaluating Antitrust Compliance Programs

On October 22, 2024, the SEC announced settled enforcement actions charging four companies with making materially misleading disclosures regarding cybersecurity risks and intrusions. These cases mark the first to bring charges against companies who were downstream victims of the well-known cyber-attack on software company SolarWinds. The four companies were providers of IT services and digital communications products and settled the charges for amounts ranging from $990,000 to $4 million.Continue Reading SEC Charges Four Companies Impacted by Data Breach with Misleading Cyber Disclosures

On October 25, 2024, the Securities and Exchange Commission (“SEC”) adopted amendments to certain rules in the Covered Clearing Agency Standards (the “Amendments”) aimed at improving risk management and resilience of covered clearing agencies (“CCAs”).  Although not directly relevant to firms who are participants in one of the clearing agencies, the amendments could result in changes to margin requirements imposed by clearing agencies.  The Amendments:Continue Reading Clearing Agency Participants Take Note: Covered Clearing Agency Resilience Rules Could Bring New Margin Requirements