Category Archives: Compliance

Feds Focus on Individuals in Evaluating Corporate Compliance Programs

Earlier this month, the U.S. Department of Justice (“DOJ”) and the U.S. Department of the Treasury’s Office of Foreign Asset Controls (“OFAC”) both issued guidance regarding their expectations for corporate compliance programs. Both documents are geared towards establishing more rigid frameworks for assessing compliance programs. A common theme among both pieces of guidance appears to … Continue Reading

From the Big Easy to the Big Ten, And Beyond: What the Process of Reforming the New Orleans Police Department Can Teach Colleges and Universities

By Jonathan Aronie, David Douglass and A. Joseph Jay, III on October 30, 2018 Posted in Compliance, Compliance Programs, Corporate Governance, Internal Investigations, White Collar

In 2012, the Penn State Lions went 8-4 on the field, passing 3,283 yards, rushing 740 yards, and scoring 349 points. This credible performance earned it a respectable 38th ranking out of the 124 schools in the NCAA’s Division I Football Bowl Subdivision. But few will remember Penn State’s athletic performance in 2012. What people … Continue Reading

“Brand Memo” Prohibits US DOJ From Converting Agency Guidance Into Binding Legal Obligations In Civil Enforcement Actions

By Emily Theriault on January 30, 2018 Posted in Compliance, False Claims, FCA

On January 25, 2018, Associate Attorney General Rachel Brand issued a memorandum (the “Brand Memo”) limiting the use of agency guidance documents in affirmative civil enforcement cases. The memorandum builds on Attorney General Jeff Sessions’ November 16, 2017 memorandum prohibiting DOJ from promulgating guidance documents that create rights or obligations that are binding on regulated … Continue Reading

FINRA Updates Its Sanction Guidelines

By Jeff Kern and Julie Bauman on April 26, 2017 Posted in Compliance, Regulations

Earlier this month, FINRA announced changes to its Sanction Guidelines through Notice to Members 17-13. FINRA’s Sanction Guidelines are used by FINRA disciplinary hearing panels to decide what, if any, sanctions to impose in those enforcement actions in which a rule violation is found. FINRA enforcement staff and members of the defense bar utilize the … Continue Reading

Watching the Detectives: The SEC Launches a Dedicated FINRA Oversight Unit

By Sarah Aberg on October 26, 2016 Posted in Compliance, Regulations

The SEC has launched a dedicated team to oversee FINRA, according to remarks by Marc Wyatt, Director of the SEC’s Office of Compliance Inspections and Examinations (“OCIE”). Congress has vested the SEC with the power to supervise FINRA, including the authority to inspect and examine. The new unit, named FINRA and Securities Industry Oversight (“FISIO”), … Continue Reading

SEC Steps Up Cybersecurity Enforcement with $1 Million Fine Against Morgan Stanley

By Jeff Kern and Christopher Bosch on June 30, 2016 Posted in Compliance, Cybersecurity

The Securities and Exchange Commission’s (“SEC”) recent $1 million settlement with Morgan Stanley Smith Barney LLC (“MSSB”) marked a turning point in the agency’s focus on cybersecurity issues, an area that the agency has proclaimed a top enforcement priority in recent years. The MSSB settlement addressed various cybersecurity deficiencies that led to the misappropriation of … Continue Reading

REGULATORS, QUANT UP! New Rules from FINRA, SEC and CFTC Target Automated Algorithmic Trading

By Sarah Aberg on February 26, 2016 Posted in Compliance, Proposed Rules, Regulations

On February 11, 2016, the Financial Industry Regulatory Authority (“FINRA”) filed a proposed rule with the Securities and Exchange Commission (“SEC”) that would require individuals who “design, develop or significantly modify algorithmic trading strategies” (or “ATS”) as well as individuals responsible for the “day-to-day supervision or direction of the development process,” to pass a qualification … Continue Reading

Look Before You Leap – Pitfalls and Trip Wires Inherent in Government Contracting

By Anne Perry and David Gallacher on January 27, 2016 Posted in Compliance, Do's and Don'ts in Government Contracting, Government Contracts Law, Government Enforcement, Procurement

Accepting money from the Government, whether through a contract, grant, or other transaction, does not come for free. In the commercial world, companies typically engage in a cost/benefit analysis when they make major decisions, such as whether to enter a new line of business, extend their product line, open new facilities, or expand globally. To … Continue Reading

It’s (Not) Academic: Cybersecurity Is a Must for Universities and Academic Medical Centers

By Christine Couvillon on November 23, 2015 Posted in Compliance, Cybersecurity, Industries

Cutting-edge research institutions need cutting-edge cybersecurity to protect their IP and critical personal and financial data. Universities hold vast repositories of valuable information, including student healthcare information, patient information from academic medical centers, and financial and personal data from applicants, donors, students, faculty, and staff. So it’s no surprise hackers have been targeting universities lately—in … Continue Reading

Contractors Beware: An Overly Broad Confidentiality Agreement Could Cost You!

By Katie Calogero on November 23, 2015 Posted in Compliance, DFARS, False Claims, FCA

On October 29, 2015, DOD renewed the DFARS deviation implemented in February, which prohibits contracting with entities that require employees or subcontractors to sign internal confidentiality agreements or statements that prohibit, or otherwise restrict, such employee or subcontractor from lawfully reporting waste, fraud, or abuse. Defense contractors should review their policies to ensure they meet … Continue Reading

Suspension and Debarment: A New Government Approach

By Townsend Bourne on November 23, 2015 Posted in Compliance, Debarment, Government Enforcement, Suspension

Contractors and government contracts attorneys are likely to see (if they haven’t already) a rise in the number of cases in which individuals, rather than corporate entities, are targeted by government officials for suspension and debarment. This is significant because, under the FAR, the misconduct of an individual can be imputed to the contractor, causing … Continue Reading

Forward to the Past: NYSE Returns to Regulation

By Jeff Kern and Christopher Bosch on November 23, 2015 Posted in Compliance, Regulations

Everything old is new again. On January 1, 2016, the New York Stock Exchange (“NYSE”) – now owned by Intercontinental Exchange, Inc. – will be taking back some of the regulatory responsibilities it yielded to the Financial Industry Regulatory Authority (“FINRA”), starting in 2007 when the NYSE and National Association of Securities Dealers (“NASD”) merged … Continue Reading

Been to Confession Lately?

By John Chierichella on October 27, 2015 Posted in Compliance, Internal Investigations, Mandatory Disclosure Rule

It has been six years since the Government introduced the concept of mandatory disclosure into the contracting calculus. In a recent Government Contractor Briefing Paper,™ John Chierichella and Bruce Casino review the FAR mandatory disclosure rule, what it requires, its inherent (and purposeful) ambiguities, best practices for compliance, and statistical data relating to industry-wide willingness … Continue Reading

Suspensions and Debarments on the Rise – A Brief Review of the ISDC’s FY 2014 Stats

By Emily Theriault on April 30, 2015 Posted in Compliance, Debarment, Government Enforcement, Suspension

The upward trend of suspensions and debarments continued in FY 2014. According to the Interagency Suspension and Debarment Committee (“ISDC”) Report to Congress, released March 31, 2015, while referrals to the suspending and debarring officials decreased 12% from FY 2013, suspensions, debarments, and proposed debarments increased, Government-wide, by almost 8%. Since the ISDC began collecting … Continue Reading

Final Anti-Trafficking Rule to Impose New – and Uncertain – Obligations on Contractors

By Sheppard Mullin on February 25, 2015 Posted in Compliance, Executive Orders, Human Trafficking

In late January, the FAR Council issued its long-awaited final rule amending the FAR to strengthen the U.S. Government’s policy against human trafficking. As discussed below, the amendments may have far-reaching compliance implications for government contractors.… Continue Reading

Corporate Internal Investigations: Best Practices

By Bryan Daly, Christopher Hale and Melissa Eaves on February 26, 2014 Posted in Compliance, Corporate Governance, Government Enforcement, Internal Investigations

A CEO receives an anonymous call claiming that someone is stealing company trade secrets or that an employee is taking kickbacks from a vendor. A GC gets a call from the HR director who has an employee accusing the company of submitting false bills to a government agency. You are served by a government agency … Continue Reading

David Douglass on the False Claims Act

By Sheppard Mullin on February 26, 2014 Posted in Compliance, FCA

Sheppard Mullin government contracts partner David Douglass was recently quoted at length in an article discussing the defense of False Claims Act cases. Although the Government is all too often using the False Claims Act as an all-encompassing fraud statute, Mr. Douglass notes that companies are having more success defending against these allegations in recent … Continue Reading

Lots of Little Things – FAR Updates from the Federal Acquisition Circular

Every now and then, the FAR Councils issue a Federal Acquisition Circular (FAC) – an update to the Federal Acquisition Regulation implementing a number of changes. Often these changes are rather pro forma. But occasionally, you get a Circular with many different (and interesting) issues. FAC 2005-67, issued in late-June 2013, with rules becoming effective … Continue Reading

Quick on the Trigger – Period for Contractors to Comment on Past Performance Evaluations Will Shrink from 30 Days to 14 Days

By Sheppard Mullin on August 14, 2013 Posted in Compliance, Debarment, FAPIIS, Past Performance, Proposed Regulations, Suspension

By David Gallacher Over the last few years, there has been a significant push to consolidate all contractor information into central locations, and also to ensure that all performance-related information is updated and current (allowing the government customers to have access to the latest and greatest information about how a contractor has performed). Two recent … Continue Reading

Threats and Vulnerabilities – What Every Contractor Should Know About The SBA’s New “Presumed Loss” and “Deemed Certification” Rules

By Sheppard Mullin on July 22, 2013 Posted in Compliance, False Claims, FCA, SBA, Set-Aside, Size Standards, Small Business, Subcontracts

By David Gallacher Nearly three years ago, on September 27, 2010, the President signed into law the Small Business Jobs Act of 2010 (“Jobs Act”), which directed the Small Business Administration (“SBA”) to implement a variety of small business size and integrity requirements. As noted in our prior blog posting discussing many of these requirements, … Continue Reading

Meaning Of FCPA’s “Foreign Official” Causes Uncertainty For Companies Doing Business Abroad

By Sheppard Mullin on June 15, 2012 Posted in Bribery, Gratuities, and Kickbacks, Compliance, FCPA, White Collar

By Alison Kleaver and Joseph Barton One of the goals of the Foreign Corrupt Practices Act (“FCPA”) is to prevent U.S. companies and individuals from paying bribes to foreign officials in exchange for business. To this end, the FCPA prohibits any domestic individual or business entity from making payments to a “foreign official” for the … Continue Reading

Deciphering the Alphabet Soup – FAPIIS, CPARS, and PPIRS; Don’t Look For All This In The FAR

By Sheppard Mullin on April 16, 2012 Posted in Compliance, Debarment, FAPIIS, Proposed Regulations, Simplified Acquisition Threshold, Suspension

By Bruce Shirk and David Gallacher In March 2010, the U.S. Government rolled out a new tool promised to provide a centralized source for all publicly available contractor past performance and integrity information – the Federal Performance and Integrity Information System (“FAPIIS”). We have written multiple times about it (in June 2010, March 2011, and … Continue Reading

Preventing Personal Conflicts Of Interest Among Contractor Employees Performing Acquisition Support Services

By Sheppard Mullin on April 16, 2012 Posted in Compliance, Compliance Programs, Personal Conflicts of Interest

By Keith Szeliga On December 2, 2011, Federal Acquisition Regulation Subpart 3.11 – Preventing Personal Conflicts of Interest for Contractor Employees Performing Acquisition Functions — took effect. The new Rule imposes a host of compliance obligations on contractors, including the requirement to screen for and prevent personal conflicts of interest when supporting acquisition functions. The … Continue Reading

Terrorism and Taxes – Proposed FAR Rule Imposes 2% Tax on Foreign Offers to Fund 9/11 Relief Fund

By Sheppard Mullin on March 16, 2012 Posted in Compliance, Cost, Cost Accounting, Cost Corner, Cost Principles, Country of Origin, Domestic Preferences, Fixed Price, Foreign Investment, International Contracts, International Procurement, Pricing, Procurement, Proposed Regulations, Proposed Rules, Tax, WTO GPA

By David Gallacher and John Bonn On January 2, 2011, the President signed the James Zadroga 9/11 Health and Compensation Act of 2010, Pub. L. No. 111-347, which set up a relief fund for victims, first responders, and construction workers who were injured in the September 11 terrorist attacks in New York City. To pay … Continue Reading

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