On August 31, 2022, in a lengthy order,[1] Judge Timothy Hillman of the U.S. District Court of Massachusetts denied motions to dismiss that were filed by multiple defendant banks (the “Banks”) in an attempt to avoid liability for allegedly aiding and abetting a multibillion-dollar Ponzi scheme by TelexFree. While the Banks raised a variety of issues, the judge’s rulings regarding the “substantial assistance” element of a tortious aiding and abetting claim is particularly noteworthy.… More
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This is the seventh post in this year’s series examining important trends in white collar law and investigations. Our previous post discussed SEC Enforcement in 2022: A Look Ahead. Up next: ESG and the SEC: What’s Next on the Horizon.
Looking further ahead into 2023, we expect to see several trends in the DOJ’s enforcement of the False Claims Act:
This is the sixth post in this year’s series examining important trends in white collar law and investigations. Our previous post discussed trends in sanctions & export controls enforcement. Up next: trends in False Claims Act enforcement.
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This is the fifth post in this year’s series examining important trends in white collar law and investigations. Our previous post discussed trends in State AG enforcement. Up next: SEC Enforcement in 2022: A Look Ahead.
Key Takeaways:
Russia and China will continue to be the focus of country-specific sanctions and export controls, but hotspots around the world persist;…Key Takeaways:
This is the second post in this year’s series examining important trends and new development in white collar law and investigations. Our previous post discussed health care enforcement. Up next: trends in tax enforcement.
As the Biden administration moves into its second year, we anticipate both an increase in U.S. anti-corruption enforcement activity, and a broader, whole-of-government approach that seeks to encourage and reward international partners for their efforts in combatting corruption. … More
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On Friday,… More
By Anthony D. Mirenda, Gwendolyn Wilber Jaramillo, Luciano Racco, Shrutih V. Tewarie
Sales of your software are robust around the globe. You have a network of third-party resellers, distributors or implementation partners that are driving international growth. Your customers praise your efficient maintenance and update services. You’ve made some strategic acquisitions of smaller companies over the past few years. It all sounds good, right? But the recent experience of SAP SE (SAP),… More
As anticipated, the pace of change around the Climate and broader ESG landscape is accelerating rapidly. In this timely webinar, we discussed:
Speakers:
This is our eighth and final post in our First 100 Days series examining important trends in white collar law and investigations in the early days of the Biden administration. Our previous entry was on pandemic-related fraud. Join us in the weeks and months ahead as we return to periodic posting on new developments and emerging trends.
Health care fraud is widely considered a bipartisan focus for federal prosecutors;… More
This is the seventh in our First 100 Days series examining important trends in white collar law and investigations in the early days of the Biden administration. Our previous entry was on FCA enforcement. Up next, healthcare fraud.
2020 saw the outbreak of a global pandemic. While the focus was undoubtedly on the devastation caused, from early 2020, enforcement divisions were proactively monitoring for risk areas arising from the pandemic. … More
This is the fifth in our First 100 Days series examining important trends in white collar law and investigations in the early days of the Biden administration. Our previous entry discussed investigations under the new Congress. Up next, a deep dive on liability under the False Claims Act.
As the Biden Administration began to take shape, many observers (including here at Foley Hoag) predicted that the SEC would move toward requiring standardized disclosures by issuers regarding their ESG risks and opportunities. … More
On January 11, 2021, the U.S. Supreme Court vacated the 2019 decision of the U.S. Court of Appeals for the Second Circuit in United States v. Blaszczak,[1] which substantially broadened the scope of criminal insider trading liability, and remanded the case to the Second Circuit for further consideration in light of the Supreme Court’s decision last year in Kelly v. United States.[2]
The Second Circuit held in Blaszczak that the government’s often challenging burden under the Securities Exchange Act to prove that the insider received a “personal benefit” in exchange for tipping inside information,… More
Last month, General Electric agreed to pay a $200 million penalty to settle an SEC enforcement action arising from alleged disclosure violations concerning the company’s power and health insurance businesses. According to the SEC’s order, between 2015 and 2017, GE did not disclose that the profits it reported for those segments were largely attributable to changes the company made to its accounting practices in order to mask significant challenges that those business lines were facing. … More
On December 4, 2020, the SEC brought its first case charging a public company, The Cheesecake Factory, with making misleading disclosures about the effects of COVID-19 on its business operations and financial condition. The agency has made explicit since January that it is closely focused on this issue, and its settled action against The Cheesecake Factory, which agreed to pay a $125,000 penalty, signals that it will target issuers for failing to provide fulsome disclosure about the negative impacts of the pandemic.… More
On November 2, 2020, the SEC’s Division of Enforcement issued its Annual Report for fiscal year 2020. The Report provides a useful look at Enforcement’s accomplishments, priorities, and challenges over the past year. Notably, the number of SEC enforcement actions fell by approximately 17 percent from fiscal 2019 – a likely result, at least in part, of the impact of the COVID-19 pandemic on Enforcement’s operations. The total amount of penalties and disgorgement the SEC obtained,… More
On October 1, 2020, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) released an advisory regarding potential sanctions risks related to facilitating ransomware payments, as covered in this post from Foley Hoag’s Security, Privacy, and the Law blog.
OFAC is the federal agency responsible for implementing and enforcing U.S. sanctions against individuals, entities, and foreign governments involved in terrorism,… More
Just before the close of its fiscal year, the Securities and Exchange Commission (SEC) brought three noteworthy financial reporting cases against issuers that resulted from the agency’s increasingly sophisticated use of risk-based data analytics to detect disclosure violations. On September 28, 2020, the SEC filed settled actions against two issuers, as well as two officers of one of them, for falsifying their reported earnings per share (EPS). These actions,… More
On September 23, 2020, the Securities and Exchange Commission (SEC), in a 3-2 vote, approved several significant amendments to, and interpretive guidance on, the rules governing its whistleblower program. Most controversially, the SEC adopted the position that it has discretion to reduce the largest whistleblower awards based upon
their size. The amendments, first proposed in 2018, have generated substantial opposition from the plaintiffs’ bar and within the Commission,… More
The U.S. Supreme Court’s decision last month in Liu v. SEC raises the question of whether disgorgement payments in SEC enforcement actions should now be deductible for federal income tax purposes. The Court held that a disgorgement award that does not exceed a wrongdoer’s net profits and is ordered for the benefit of victims is equitable relief, and therefore available to the SEC under the Securities Exchange Act. … More
Last week, the Supreme Court decided in Liu v. SEC that the SEC may continue to seek disgorgement in judicial proceedings as a form of equitable relief under the Securities Exchange Act. A ruling to the contrary would have deprived the SEC of its most significant tool, in dollar terms, for obtaining monetary relief. Although the decision preserves the SEC’s disgorgement power, it restricts how courts may disgorge ill-gotten gains in three ways: in general,… More
Earlier this month, the Criminal Division of the United States Department of Justice (DOJ) updated its Evaluation of Corporate Compliance Programs guidance. In considering enforcement actions against companies, prosecutors use the guidance to assist in evaluating (1) the form of any resolution or prosecution, (2) the amount of a monetary penalty, if any, and (3) whether to impose compliance obligations, such as a monitor or reporting requirements. The guidance thus provides valuable insight into the factors prosecutors consider when making these decisions.… More
Following up on previous guidance, Steven Peikin, Co-Director of the SEC Division of Enforcement (“Enforcement”), provided updated detail on Enforcement’s response to the COVID-19 pandemic in a virtual keynote address last month at the Securities Enforcement Forum West 2020. (We discussed Enforcement’s prior statements here and here.) In his remarks, Peikin affirmed that Enforcement will continue to prioritize COVID-19-related fraud – in particular,… More
The SEC recently brought an FCPA action against a former Goldman Sachs executive
for an alleged bribery scheme, but decided not to charge the bank itself.
The case holds some important lessons for FCPA compliance, as Foley Hoag attorneys John Murray and Shrutih Tewarie discuss in this Law360 article. More
In the past two weeks, the federal government has charged several individuals in Paycheck Protection Program loan fraud schemes. The allegations have ranged from applying for loans for non-operating businesses to using loan funds to buy cars and jewelry. Charges announced this week showed a whole new level of creativity. A Texas man, Samuel Yates, allegedly used an online name generator to make up the names of hundreds of employees in an effort to obtain a $5 million loan. … More
In yet another sign that the federal government is following through on its warnings about PPP loan fraud, the Department of Justice, according to reports from Reuters, has issued grand jury subpoenas to several Wall Street banks related to an investigation into PPP loans. The subpoenas were reportedly issued by the DOJ’s Fraud Section. The issuance of the subpoenas does not necessarily indicate wrongdoing by the banks. … More
Federal prosecutors continued to quickly respond to PPP loan fraud, bringing two additional cases that allege clear misuse of the funds intended for small businesses. In one case, prosecutors in Georgia charged reality TV personality Maurice Fayne, aka “Arkansas Mo” of “Love & Hip Hop: Atlanta” fame, with bank fraud for allegedly using $1.5 million of a $2 million PPP loan to maintain his luxury lifestyle. … More
On Tuesday, May 5, the Department of Justice (DOJ) filed charges in the federal District Court of Rhode Island against David A. Staveley and David Butziger for conspiracy to make a false statement and conspiracy to commit bank fraud in connection with loan applications made under the federal government’s Payroll Protection Program (PPP). The Complaint alleges that Staveley of Andover, Massachusetts, and Butziger of Warwick, Rhode Island,… More
Partner John Murray recently published an alert on guidance from the SEC Division of Enforcement regarding the unique risks of insider trading posed by the COVID-19 pandemic. The full alert can be found here. More
Editors’ Note: This is the third in our start-of-year series examining important trends in white collar law and investigations in the coming year. Our previous entry discussed healthcare fraud in 2020. Up next: a look at trends regarding the False Claims Act. Look for additional posts throughout the month of January.
2019 was a blockbuster year for FCPA enforcement.… More
The Supreme Court has granted certiorari to decide whether the U.S. Securities and Exchange Commission can seek and obtain disgorgement from a court as a remedy for a securities violation. A decision that the SEC does not have disgorgement authority would have significant consequences for litigants.
In SEC v. Liu, a California District Court held that the defendants had defrauded Chinese individuals seeking to invest in a cancer treatment center to obtain visas under the EB-5 Immigrant Investor Program.… More
This is a follow-up to our September 13, 2019 post discussing the DOJ guidance on corporate claims of inability to pay.
On Tuesday, October 8, 2019, the Department of Justice provided guidance on how its prosecutors should evaluate claims of corporate poverty. This comes on the heels of Deputy Assistant Attorney General Matthew Miner’s comments last month suggesting that further guidance on corporate poverty claims was forthcoming. … More