Former Federal Prosecutors and Defense Attorneys React to Dubin v. United States

Editor’s Note: The NYU Law Program on Corporate Compliance and Enforcement is following the Supreme Court’s recent decision in Dubin v. United States, in which it circumscribed the application of the aggravated identity theft statute, 18 U.S.C. § 1028A. In this post, former federal prosecutors and current defense attorneys react to the decision.

Top left to right: Elizabeth Geddes, Brian Jacobs, Paul Krieger, and Harry Sandick.
Bottom left to right: Justin Weddle, Elisha Kobre, and Sarah Krissoff
(Photos courtesy of authors and their firms)

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Key Takeaways from Interagency Guidance on Banks’ Risk-Management of Fintech Relationships

by Margaret E. Tahyar and Ledina Gocaj

Left to right: Margaret E. Tahyar and Ledina Gocaj (Photos courtesy of Davis Polk & Wardwell LLP)

On June 6, 2023, the Federal Reserve, FDIC and OCC (the Agencies) released final interagency guidance on banking organizations’ management of risks associated with third-party relationships. Davis Polk’s memo on the guidance is linked here. Our key takeaways:

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The Top Eight AI Adoption Failures and How to Avoid Them

by Avi Gesser, Matt Kelly, Samuel J. Allaman, Michelle H. Bao, Anna R. Gressel, Michael Pizzi, Lex Gaillard, and Cameron Sharp

Top left to right: Avi Gesser, Matt Kelly, Samuel J. Allaman, and Michelle H. Bao.
Bottom left to right: Anna R. Gressel, Michael Pizzi, Lex Gaillard, and Cameron Sharp.
(Photos courtesy of Debevoise & Plimpton LLP)

Over the past three years, we have observed many companies in a wide range of sectors adopt Artificial Intelligence (“AI”) applications for a host of promising use cases. In some instances, however, those efforts have ended up being less valuable than anticipated—and in a few cases, were abandoned altogether—because certain risks associated with adopting AI were not properly considered or addressed before or during implementation. These risks include issues related to cybersecurity, privacy, contracting, intellectual property, data quality, business continuity, disclosure, and fairness.

In this Debevoise Data Blog post, we examine how the manifestation of these risks can lead to AI adoption “failure” and identify ways companies can mitigate these risks to achieve their goals when implementing AI applications.

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Supreme Court Issues Decision in High-Stakes False Claims Act Case: Outcome and Future Implications

by Kayla Conti

Kayla Conti (Photo courtesy of Kohn, Kohn & Colapinto LLP)

On June 1, 2023, the Supreme Court issued a unanimous decision[1] in the consolidated case of U.S. ex rel. Schutte v. SuperValu, Inc. (“SuperValu”)[2] and U.S. ex rel. Thomas Proctor v. Safeway, Inc. (“Safeway”),[3] holding that subjective intent is relevant for determining whether a defendant acted “knowingly” under the False Claims Act. The Supreme Court reversed the Seventh Circuit’s decisions in favor of Petitioners, which effectively preserves the False Claims Act as a major tool for both prosecuting and deterring fraud. While whistleblowers, taxpayers, and anti-fraud advocates have ample reason to rejoice, the decision left more to be desired by the Department of Justice and many entities who submit claims for payment to federal programs.

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Federal Agencies Publish New Version of the #StopRansomware Guide

by Benjamin A. Powell, Matthew F. Ferraro, Shannon Togawa Mercer, and Ariel Dobkin

From left to right: Benjamin A. Powell, Matthew F. Ferraro, Shannon Togawa Mercer, and Ariel Dobkin (photos courtesy of Wilmer Cutler Pickering Hale and Dorr LLP)

On May 23, 2023, the Cybersecurity and Infrastructure Security Agency (CISA) published a second edition of the #StopRansomware Guide (the Guide). The Guide, first published in September 2020, aims to help organizations reduce the risk of ransomware attacks, and it provides best practices to prevent, detect, respond to, and recover from such incidents. The 2023 version contains updated guidance and best practices in the areas of initial infection vectors, cloud backups, zero trust architecture and ransomware response.

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National Association of Attorneys General’s 2023 Consumer Protection Spring Conference

by Courtney M. Dankworth, Avi Gesser, Paul D. Rubin, Jehan A. Patterson, Sam Allaman, and Melissa Muse

From top left to right: Courtney M. Dankworth, Avi Gesser, and Paul D. Rubin.
From bottom left to right: Jehan A. Patterson, Sam Allaman, and Melissa Muse.
(Photos courtesy of Debevoise & Plimpton)

On May 10−12, 2023, the National Association of Attorneys General (the “NAAG”) held its Spring 2023 Consumer Protection Conference to discuss the intersection of consumer protection issues and technology. During the portion of the conference that was open to the public, panels featuring federal and state regulators, private legal practitioners, and industry experts discussed potential legal liabilities and consumer risks related to artificial intelligence (“AI”), online lending, and targeted advertising.

In this Debevoise Update, we recap some of the panels and remarks, which emphasized regulators’ increased scrutiny of the intersection of consumer protection and emerging technologies, focusing on the leading themes from the conference: transparency, fairness, and privacy.

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Crypto Experts React to SEC Coinbase, Binance Enforcement Actions

Editor’s Note: The NYU Law Program on Corporate Compliance and Enforcement (PCCE) is following the SEC’s recent enforcement actions against major digital asset exchanges Coinbase and Binance and Binance’s founder, Chanpeng Zhao. In this post, cryptocurrency experts provide their insights to the SEC’s enforcement actions.

From left to right: Marc Fagel, Ijeoma Okoli, Daniel Payne, and Charles Senatore (photos courtesy of the authors)

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Registration Is Open for PCCE’s 2023 Directors’ Academy

The Program on Corporate Compliance and Enforcement (PCCE) is delighted to announce that registration is open for our forthcoming Directors’ Academy at New York University School of Law on September 21st and 22nd, 2023.

Our event is for public company directors, is off-the-record, offers a Directors’ Academy Certificate to those who attend each full day of programming, NY CLE credit for lawyers, and is provided at a reasonable price consistent with our academic mission. Our in-person program is for a select audience not to exceed 90 people and will feature networking breaks, receptions, and meals.

Public company directors interested in registering, or who want more information, should contact PCCE Assistant Director Carolyn Pautz at crp283@nyu.edu

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Not Home Alone: FTC Says Ring’s Lax Practices Led to Disturbing Violations of Users’ Privacy and Security

by Lesley Fair

Lesley Fair (photo courtesy of author)

Many consumers who use video doorbell and security cameras want to detect intruders invading the privacy of their homes. Consumers who installed Ring may be surprised to learn that according to a proposed FTC settlement, one “intruder” that was invading their privacy was Ring itself. The FTC says Ring gave its employees and hundreds of Ukraine-based third-party contractors up-close-and-personal video access into customers’ bedrooms, their kids’ bedrooms, and other highly personal spaces – including the ability to download, view, and share those videos at will. And that’s not all Ring was up to. In addition to a $5.8 million financial settlement, the proposed order in the case contains provisions at the intersection of artificial intelligence, biometric data, and personal privacy. It’s an instructive bookend to another major biometric privacy case the FTC announced today, Amazon Alexa.

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FTC Diminishes Role of Administrative Law Judge

by Jonathan M. Moses, Nelson O. Fitts, and Adam L. Goodman

From left to right: Jonathan M. Moses, Nelson O. Fitts, and Adam L. Goodman (Photos courtesy of Wachtell, Lipton, Rosen & Katz)

Recently, the FTC quietly issued a final rule modifying its internal procedures to diminish the role of its Administrative Law Judge. The ALJ adjudicates, among other things, the agency’s challenges to mergers and acquisitions under the antitrust laws. The move is of a piece with the agency’s agenda under Chair Lina Khan—on which we have commented here, here, and here—and underscores the significance of numerous pending challenges to the constitutionality of the FTC’s in-house adjudicative process.

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