Global Crisis Management Series:  This post is part 15 in a series concerning topics further elaborated on in Cleary Gottlieb’s Global Crisis Management Handbook—a desk reference for spotting issues and avoiding common mistakes when faced with a crisis.  The current version is available here.

Have the right policies in place

  • Ensure clear, readily accessible, and (where necessary) country-specific policies are in place indicating the permitted uses of company devices and other IT equipment, including messaging services. If you allow employees to use their own devices to perform work, make sure your policies adequately address issues of access in the context of investigations.
  • Draft and make accessible to employees a policy concerning the purposes for which, when, and by whom, suspicious log data can be accessed, and implement and enforce acceptable and unacceptable use of IT work facilities policies.
  • Evaluate policies regularly. Policies that allow monitoring of communications should be reviewed at least annually to assess whether they are the least intrusive means to achieve the stated purposes.
  • Stay informed on updates in the law surrounding monitoring, and note that these rules also apply to the monitoring of electronic communications in the workplace.

Continue Reading Be Prepared: How to Proactively Account for Data Privacy

On September 18, 2019, the Securities and Exchange Commission (“SEC”) filed its first civil suit alleging violations of broker-dealer registration requirements in U.S. digital asset markets.  In a case filed in the U.S. District Court for the Central District of California, the SEC alleged that Defendants ICOBox and its founder, Nikolay Evdokimov, illegally conducted an unregistered public securities offering for their 2017 initial coin offering (“ICO”), and have operated an unregistered brokerage service facilitating the launch of ICOs in digital asset securities since 2017. Continue Reading SEC Files First Suit Against Alleged Unregistered Broker-Dealer Operating in Digital Asset Markets

Global Crisis Management Series:  This post is part 14 in a series concerning topics further elaborated on in Cleary Gottlieb’s Global Crisis Management Handbook—a desk reference for spotting issues and avoiding common mistakes when faced with a crisis.  The current version is available here.

Many investigations, particularly those that are cross-border in nature, are likely to present data privacy issues, and managing these issues is frequently a key consideration in an investigation.  By keeping data privacy laws in mind as soon as an investigation starts, an organization will avoid the risk that it has failed to satisfy certain requirements, thereby exposing itself to the possibility of a fine or sanction from a regulator.  Below we walk through chronologically how an organization might incorporate data privacy considerations at each stage of an investigation: Continue Reading Incorporating Data Privacy Considerations Into Investigations

Companies that face non-public government investigations frequently confront challenging questions regarding whether and when to disclose the existence of the investigation, how much to disclose, and any duty to update the disclosure as the investigation proceeds. The SEC recently filed a settled complaint alleging that Mylan committed accounting and disclosure violations for failing to timely disclose an otherwise confidential DOJ investigation into whether Mylan overcharged Medicaid for its largest revenue and profit generating product, the EpiPen. The investigation resulted in Mylan agreeing to pay $465 million to settle the investigation. The settlement papers are important reading for all public companies considering disclosure of government investigations.

Please click here to read the full alert memorandum.

On September 4, 2019, the SEC’s Office of Compliance Inspections and Examinations (“OCIE”) issued a Risk Alert addressing the most common compliance issues it identified in examinations of investment advisers (“Advisers”) related to principal and agency cross transactions. Continue Reading SEC’s OCIE Affiliate Transaction Risk Alert Highlights Pitfalls in Obtaining Effective Consent

Global Crisis Management Series:  This post is part 13 in a series concerning topics further elaborated on in Cleary Gottlieb’s Global Crisis Management Handbook—a desk reference for spotting issues and avoiding common mistakes when faced with a crisis.  The current version is available here.

When a company receives a request for information from an investigating authority, one initial issue is whether to cooperate with the request or to assume an adversarial (or at least non-cooperative) position.  Even if the company ultimately decides to contest the authority’s characterization of the conduct, it is often in the company’s best interest to agree to cooperate with the investigation and the authority’s requests (to the extent they are reasonable and lawful).  In this vein, there are three important ways to establish and maintain a cooperative posture with an investigating authority, while also protecting the company’s interests in the process. Continue Reading Best Practices for Negotiating the Scope of an Investigative Request

Global Crisis Management Series:  This post is part 12 in a series concerning topics further elaborated on in Cleary Gottlieb’s Global Crisis Management Handbook—a desk reference for spotting issues and avoiding common mistakes when faced with a crisis.  The current version is available here.

One critical issue to consider in responding to an investigative request is whether by producing the requested data, the company will be waiving a privilege or violating legal confidentiality obligations, including data privacy restrictions.  To avoid inadvertently waiving protections over the company’s information or violating any legal restrictions on the production, companies should consider whether any of the following are implicated by the information requested by the authority: Continue Reading Before You Press Send: Protecting Privilege and Complying With Limitations on Data Dissemination When Responding to an Investigative Request

The SFO recently released its much anticipated Corporate Co-Operation Guidance (the “Guidance”). It provides details of the types of behaviour expected by the SFO in order for an organisation to receive credit for its cooperation, including through the offer of a Deferred Prosecution Agreement (“DPA”) or by the SFO determining that it is not in the public interest to prosecute. The Guidance raises the bar for obtaining cooperation credit in key areas, and also produces certain points of tension with guidance issued by US enforcement authorities which will have to be navigated during any transatlantic investigation.

Please click here to read the full alert memorandum.

 

In what appears to be an industry-wide sweep involving American Depositary Receipts (“ADRs”), over the last few years the SEC has brought enforcement actions against 13 financial institutions – including depositary banks and brokers that borrow and lend “pre-released” ADRs.  On August 16, 2019, the SEC announced the latest of these actions against two brokers – Cantor Fitzgerald & Co. and BMO Capital Markets Corporation – for charges related to the improper borrowing and lending of “pre-released” ADRs without obtaining or locating the foreign shares purportedly underlying those ADRs.  The SEC’s cases have targeted conduct going back as far as seven years from the date of the announced settlements, and resulted in monetary settlements in excess of $427 million.  While these actions may be on the wane given the apparent contraction of the pre-release market, the SEC’s actions signal that it is willing to bring cases to police conduct it views as having a negative effect on markets generally, even in the absence of readily-identifiable victims.

Please click here to read the full alert memorandum.

Global Crisis Management Series:  This post is part 11 in a series concerning topics further elaborated on in Cleary Gottlieb’s Global Crisis Management Handbook—a desk reference for spotting issues and avoiding common mistakes when faced with a crisis.  The current version is available here.

Upon receiving a request for information from a governmental authority or other agency, it is critical to make early strategic decisions about how to respond to the request and effectively frame the scope of the inquiry.  Generally speaking, there are two overarching goals that typically inform a company’s strategy for responding to requests for information: (i) to provide the requesting authority the information it seeks as efficiently as possible while maintaining credibility and (ii) to appropriately frame and cabin the scope of inquiry to minimize the burden on the company.  To do so, the party receiving the request should first explore a number of foundational questions to understand the context of and motivation for the request. Continue Reading Five Important Questions for Addressing an Investigative Request