Category Archives: Government Enforcement

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FINRA Settlement Highlights Importance of Anti-Money Laundering Due Diligence and Monitoring

Sarah AbergChristopher BoschBy Sarah Aberg and Christopher Bosch on Posted in Government Enforcement
A recent enforcement action offers a glimpse of the Financial Industry Regulatory Authority’s (“FINRA”) expectations for firms conducting anti-money laundering (“AML”) due diligence and transaction monitoring.  On July 27, 2020, FINRA settled with broker-dealer JKR & Company (“JKR”) over allegations that the firm failed to detect, investigate, and report suspicious activity in four customer accounts … Continue Reading

DOJ Cracks Down on COVID-Relief Fraud

Kate RossSarah AbergBy Kate Ross and Sarah Aberg on Posted in Government Contracts Law, Government Enforcement
On July 15, 2020, the Department of Justice (“DOJ”) charged Andrew Marnell with bank fraud in connection with $8.5 million worth of Paycheck Protection Program (“PPP”) loans he obtained for fake business expenses, that were then spent on gambling and stock market bets, incurring millions of dollars in losses.  See United States v. Marnell, No. … Continue Reading

Prepare for a Perfect Storm of COVID-19 Whistleblower Claims

Scott RoybalMatthew LinBy Scott Roybal and Matthew Lin on Posted in FCA, Government Contracts Law, Government Enforcement, Whistleblower
Whistleblowers are a common character in investigations into governmental abuse.  They famously have exposed covert government surveillance programs, political corruption scandals, and even led to the impeachment of the president of the United States.  Some statutes also empower whistleblowers to bring claims against private businesses on behalf of the government for financial misconduct involving fraud, … Continue Reading

Materiality Concerns For CARES Act Enforcement Cases

Charles KreindlerMatthew LinBy Charles Kreindler and Matthew Lin on Posted in FCA, Government Contracts Law, Government Enforcement
With the Department of Justice’s (DOJ) decision to drop charges against Michael Flynn, materiality has come to the forefront of popular legal discourse.  At the same time, prosecutors and whistleblowers will carefully consider enforcement/false claims actions against entities who may have wrongfully received relief funds under the Coronavirus Aid, Recovery, and Economic Stability Act (CARES … Continue Reading

Small Business Money Grab Under the CARES Act Brings Enforcement Risks

Scott RoybalLaura AlexanderMatthew LinBy Scott Roybal, Laura Alexander and Matthew Lin on Posted in Compliance, False Claims, Government Contracts Law, Government Enforcement, SBA
The devastating economic impact of the COVID-19 pandemic already has set in, with the future of thousands of businesses hanging in the balance.  Big and small businesses alike are finding it difficult to cope with the downturn.  The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) provisions related to small business loans provide a … Continue Reading

The SEC’s 2020 Examination Priorities

Sarah AbergKate RossBy Sarah Aberg and Kate Ross on Posted in Government Enforcement, Securities Exchange Commission (SEC)
On January 7, 2020, the Securities and Exchange Commission (“SEC”) released its 2020 examination priorities, an annual report by the SEC’s Office of Compliance Inspections and Examinations (“OCIE”) meant to apprise the public of the SEC’s activities and enforcement agenda based on potentially high-risk areas for investors and U.S. markets. The issues in this year’s … Continue Reading

A Few Thoughts on DOJ’s Procurement Collusion Strike Force

Jonathan AronieRyan RobertsBy Jonathan Aronie and Ryan Roberts on Posted in Compliance, Compliance Programs, Contractor Business Ethics Compliance Program and Disclosure Requirements, Flow-down, Government Enforcement, Internal Controls, Mandatory Disclosure Rule, OIG, Supply Chain
This month, and with great fanfare, the U.S. Department of Justice (DOJ) announced its creation of a Procurement Collusion Strike Force.  We know what you’re thinking, and no – this Strike Force will not be starring in the next Avengers movie. Rather, DOJ created the Strike Force to combat antitrust crimes in Federal procurement. The … Continue Reading

Regulatory Moves Show Financial Watchdogs Working Smarter, if Not Harder

Sarah AbergChristopher BoschBy Sarah Aberg and Christopher Bosch on Posted in Cryptocurrency, Cybersecurity, Government Enforcement, Law Enforcement, Securities Exchange Commission (SEC)
To gain insight into where the Securities and Exchange Commission (“SEC”) and Commodity Futures Trading Commission (“CFTC”) have been focusing their oversight and what their priorities will be in 2020, look no further than their recent words and deeds. A common thread running through the recent public statements and enforcement activity of both agencies is … Continue Reading

Spoofing Enforcement Intensifies

Julie BaumanSarah AbergBy Julie Bauman and Sarah Aberg on Posted in Government Enforcement, Internal Controls, Securities Exchange Commission (SEC)
U.S. regulators, in particular the Commodity Futures Trading Commission (“CFTC”), are intently pursuing market manipulation enforcement. The September 30 end of the 2019 fiscal year brought with it a flurry of press releases from four different agencies announcing settlements of spoofing-related enforcement actions against trading firms, banks, interdealer brokers, and traders.… Continue Reading

New York’s Department of Financial Services: the Self-Styled “Regulator of the Future”

Sarah AbergBochan KimBy Sarah Aberg and Bochan Kim on Posted in Cryptocurrency, Government Enforcement
Under its new leader, the New York Department of Financial Services (“DFS”) has staked out high ground for itself by self-identifying as the “regulator of the future” DFS’s pronouncement came in a July press release issued about a month after Linda Lacewell was confirmed as the agency’s third superintendent. The press release, issued to announce … Continue Reading

How to Prevent or Defend Against Business Crimes, including Trade Secrets and Human Trafficking

Charles KreindlerBy Charles Kreindler on Posted in Bribery, Gratuities, and Kickbacks, Civil Litigation, Corporate Governance, FCPA, Government Enforcement, Healthcare, Human Trafficking, Supply Chain, White Collar
The C-Suite rarely wants to consider, much less worry about, the impacts of criminal conduct on their business. The reality is, however, companies can and do get pulled into criminal and quasi-criminal enforcement actions as both victims and (albeit unintentional) perpetrators. Two areas of criminal conduct that perhaps do not receive the amount of C-Suite … Continue Reading

New York DFS Consumer Protection and Financial Enforcement Division: New Name, New Look, Old Mandate

Sarah AbergChristopher BoschBy Sarah Aberg and Christopher Bosch on Posted in Civil Litigation, Cybersecurity, Government Enforcement
On April 29, 2019, just months into her new job at the New York State Department of Financial Services (“DFS”), acting DFS Superintendent Linda Lacewell announced a significant reorganization within the financial and insurance regulator. The new Consumer Protection and Financial Enforcement Division (the “CPFED”) combines seven previously separate divisions and units – Enforcement, Investigations … Continue Reading

Resurrecting the Spare Parts Bogeyman – A Refresher on Why the Government Gets It Wrong

John ChierichellaBy John Chierichella on Posted in Audits, DCAA, Government Enforcement, Price Evaluation
The April issue of National Defense Magazine brought a well-written article by Susan Cassidy and her colleagues at Covington & Burling LLP on a recent DOD IG report analyzing (and criticizing) spare aviation parts pricing, even though the report concluded that the contractor in question had complied with the Truthful Cost or Pricing Data Act. … Continue Reading

SEC Enforcement’s Annual Report Prioritizes Retail Investors, Cryptocurrency, Cybercrime, and Individual Accountability

Jeff KernJulie BaumanBy Jeff Kern and Julie Bauman on Posted in Cryptocurrency, Cybersecurity, Government Enforcement, Internal Controls, Securities Exchange Commission (SEC)
The Enforcement Division of the United States Securities and Exchange Commission (“SEC”) recently released its annual enforcement report (“Report”) for fiscal year 2018. The Report reflects an increased focus on retail investors, cryptocurrency, cybercrime, and individual accountability. Further, it showcases that SEC enforcement continues to be robust under the Trump administration, despite industry and media … Continue Reading

Fool Me Twice…SEC’s latest Cyber-Fraud ROI Indicates Future Enforcement Against Hacker Victims

Bill MatejaSarah AbergJennifer N. LeBy Bill Mateja, Sarah Aberg and Jennifer N. Le on Posted in Compliance Programs, Cybersecurity, Government Enforcement, Internal Controls, Securities Exchange Commission (SEC)
In the aftermath of the Securities and Exchange Commission’s (“SEC”) latest Report of Investigation (“Report”) regarding cyberattacks via “spoofed or manipulated electronic communications,” companies should prepare to adjust and update their internal controls or face possible enforcement actions for violation of federal securities law.  Released as a warning to public companies about recent cyberattacks, the Report’s … Continue Reading

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

Anne PerryDavid GallacherBy Anne Perry and David Gallacher on 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

Ninth Circuit Severely Limits “Rogue Employee” Exception for Corporations in Securities Fraud Cases

Julie BaumanBy Julie Bauman on Posted in Corporate Governance, Government Enforcement, Scienter
In an issue of first impression, the Ninth Circuit Court of Appeals recently held that a rogue corporate officer’s fraudulent intent can be imputed to a corporation even where the defrauding officer acted against the corporation’s interest, known as the “adverse interest exception.” In re ChinaCast Educ. Corp. Sec. Litig., — F.3d  –, 2015 WL … Continue Reading

Suspension and Debarment: A New Government Approach

Townsend BourneBy Townsend Bourne on 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

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

Emily TheriaultBy Emily Theriault on 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

“How Dare You Charge That for a Spare Part!” – The Untold Story of the X27 Interface Assembly

John ChierichellaBy John Chierichella on Posted in Audits, DCAA, Government Enforcement, Price Evaluation, Procurement
The pricing of spare parts has been a subject of Government criticism for decades.  Pick up any DCAA or IG audit report relating to spare parts or any intra-agency memorandum on the topic and you will sense the dudgeon with which the Government reacts to the prices of those parts.… Continue Reading

Corporate Internal Investigations: Best Practices

Bryan DalyChristopher HaleMelissa EavesBy Bryan Daly, Christopher Hale and Melissa Eaves on 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

WE’RE BEING SEARCHED!

By Sheppard Mullin on Posted in Government Enforcement
If Government Agents Arrive, Follow These Steps: Ask for identification of the agent-in-charge and the prosecutor. Get business cards. Contact your company’s inside or outside counsel. Ask the agents to talk to your counsel. Request the agents not begin the search until counsel can be present. Read the search warrant to learn what areas may … Continue Reading
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