On August 5, President Biden signed two bills into law that extend to ten years the statute of limitations for civil and criminal enforcement actions for fraud on the Paycheck Protection Program (“PPP”) and Economic Injury Disaster Loans (“EIDL”). These two bills—the PPP and Bank Fraud Enforcement Harmonization Act of 2022 and the COVID-19 EIDL Fraud Statute of Limitations Act of 2022—were both passed by Congress with bipartisan support.
A federal court filing by a fintech company revealed that it has been under investigation by the Department of Justice (“DOJ”) in relation to its Paycheck Protection Program (“PPP”) loan approval practices for over a year. This rare disclosure of a pre-indictment DOJ investigation warns that the government is refocusing enforcement efforts to the fintechs and financial institutions that administered PPP loans.…
Just when you didn’t think things could get any weirder, on Friday, January 21, 2022, the U.S. District Court for the Southern District of Georgia issued a ruling clarifying its prior EO 14042 injunction (currently on appeal to the 11th Circuit, and discussed previously here) by refusing to clarify the injunction. Yes, you read that right. Let us explain.
Continue Reading Executive Order 14042 – Update 15.0: U.S. District Court “Clarifies” Its Injunction Applies Only To The Vaccine Mandate
On January 13, 2022, the Supreme Court reinstated the nationwide injunction of the Occupational Safety and Health Administration’s (OSHA) COVID-19 Emergency Temporary Standard (ETS). (Technically, the Court overturned the Sixth Circuit’s decision dissolving the 5th Circuit’s injunction, discussed in the OSHA Emergency Temporary Standard Survival Guide.) This means the OSHA ETS is no longer in force, and businesses, regardless of size, need not comply with the OSHA ETS vaccine/test mandate.
Continue Reading Supreme Court Enjoins OSHA Emergency Temporary Standard; Keeps CMS Rule Alive
New York’s chief law enforcement agency recently squandered an opportunity to bring much needed guidance to the digital assets space. On October 18, 2021, the Office of New York Attorney General, Letitia James (“NYAG”), issued a press release warning New York businesses that offer interest-bearing accounts to customers depositing virtual currency without having registered under New York General Business Law § 352, et seq. (the “Martin Act”) are breaking the law.
Continue Reading NYAG’s Warning to Crypto Businesses Muddies Regulatory Waters; Compliance Requirements Remain Elusive
On September 9, 2021, President Biden signed an Executive Order (EO) to implement COVID safety protocols for Federal service contractors. While the EO did not identify specific safety protocols, it did direct a Federal task force (the “Safer Federal Workforce Task Force,” created by Executive Order in January 2021) to issue COVID-19-related workplace safety guidance for prime contractors and subcontractors in the near future. Specifically, the Task Force is charged with issuing contractor guidance by September 24, 2021, including definitions of relevant terms, specific workplace safety protocols, and applicable exceptions.
Continue Reading COVID-19 Oversight and Enforcement: President Biden’s COVID Executive Order
On July 30, 2021, the Special Inspector General for Pandemic Recovery (“SIGPR”), Brian D. Miller, submitted his quarterly report to Congress. SIGPR was created as an independent watchdog of the Department of the Treasury under the CARES Act. It is tasked with investigating fraud and abuse of federal stimulus funds in response to COVID-19, and works in collaboration with law enforcement and U.S. Attorney’s Offices throughout the country. These investigative efforts have resulted in civil and criminal enforcement actions against recipients of federal funding throughout the country, and such enforcement action investigations are sure to continue. The quarterly report showed that the federal government has been active in investigating fraud and abuse related to stimulus funds, and its call for additional funding signals an increase in future enforcement against recipients of federal stimulus funds.
Continue Reading The Special Inspector General for Pandemic Recovery Calls For Increased Funding and Expanded Jurisdiction In Its Quarterly Report To Congress
On August 5, 2021, the U.S. Court of Appeals for the Second Circuit ruled that a French banker may seek dismissal of an indictment without having to physically appear in the United States. The decision limits the application of the “fugitive disentitlement” doctrine – which has long prevented foreign nationals from challenging criminal prosecutions without appearing in the United States to do so.
Continue Reading The Second Circuit Court of Appeals Finds That French Banker Need Not Travel to the United States to Seek Dismissal of Her Indictment
In Securities & Exchange Comm’n v. Fowler, No. 20-1081, 2021 WL 3083655 (2d Cir. July 22, 2021), the United States Court of Appeals for the Second Circuit upheld a lower court judgment awarding the Securities and Exchange Commission (“SEC”) civil penalties, disgorgement, and injunctive relief in a securities fraud action against a broker engaged in unsuitable and unauthorized high-frequency trading. The district court entered its judgment following a jury trial finding the defendant guilty of violations of Section 10(b) of the Securities Exchange Act of 1934, Rule 10b-5 promulgated thereunder, and Sections 17(a)(1), 17(a)(2), and 17(a)(3) of the Securities Act of 1933. On appeal, defendant asserted that the action was subject to a five-year statute of limitations imposed by 28 U.S.C. § 2462 despite the parties having entered into tolling agreements. Defendant also argued that the civil penalties assessed against him were excessive, and the disgorgement award failed to properly account for legitimate business expenses as required by Liu v. Securities & Exchange Comm’n, 140 S. Ct. 1936 (2020). After reviewing its text and legislative history, the Second Circuit concluded in this matter of first impression that § 2462 is non-jurisdictional and, therefore, the district court had the power to hear the case in light of the parties’ tolling agreements. The decision is important because it reaffirms the enforceability of tolling agreements between the SEC and its investigative quarries. The court also rejected defendant’s arguments alleging improper civil penalty and disgorgement calculations.
Continue Reading Second Circuit Upholds Enforceability of SEC Tolling Agreements
In Van Buren v. United States, No. 19-783 (U.S. June 3, 2021), the United States Supreme Court issued an opinion drastically limiting the application of the Computer Fraud and Abuse Act (CFAA) (18 U.S.C. § 1030 et seq.), holding that the “exceeds authorized access” clause of the Act applies only to those who obtain information from particular areas in the computer—such as files, folders, or databases—to which the individual is not authorized to access under any circumstances. However, the Supreme Court excluded application of the clause to individuals who misuse their access to obtain information otherwise available to them for an unauthorized purpose.
Continue Reading Supreme Court Resolves Circuit Split Over CFAA
During a March 9, 2021 industry conference, one of the four current U.S. Securities and Exchange (“SEC”) commissioners floated a new approach to calculating penalties for corporate misconduct. Caroline A.
Continue Reading SEC Commissioner Calls for a Brave New Approach to Corporate Penalties