Author Archives: Clarissa Santiago

Safeguarding Corporate Compliance Programs During the COVID-19 Crisis

by Kara Brockmeyer, Andrew M. Levine and Philip Rohlik

COVID-19 has altered life for billions, including how companies interact with their employees, business partners, and regulators. Some changes will reverse as the pandemic ebbs or the virus becomes treatable. Others likely will remain for an extended period of time or even become permanent.

No matter the exact course of the coming months, disruptions from COVID-19 already have had a significant impact on corporate compliance functions, internal investigations, and government enforcement. These disruptions will continue to evolve, affecting companies in differing ways and leaving an unmistakable imprint on the compliance landscape. Continue reading

Florida Cancer Center Admits to Violating the Federal Antitrust Laws; Agrees to Pay More than $120 million in Penalties

by Andrea Agathokolis Murino, James D. Gatta, a 

In the first case of its kind, the Antitrust Division of the U.S. Department of Justice (“DOJ”) announced that it had entered into a deferred prosecution agreement (DPA) with Florida Cancer Specialists & Research Institute LLC (FCS). Specifically, FCS admitted that it violated the federal antitrust laws by participating in a criminal antitrust conspiracy to allocate medical oncology and radiation oncology treatments provided to cancer patients in Southwest Florida for almost two decades. Pursuant to the DPA, FCS agreed to pay the statutory maximum criminal penalty of $100 million, and to cooperate with the DOJ in an ongoing investigation into market allocation in the oncology industry, as well as other conditions. In addition, the Florida Attorney General announced a parallel civil settlement with FCS, requiring FCS to pay more than $20 million in disgorgement for the company’s violations of state antitrust and unfair trade practices laws in connection with the scheme. The announcement of a federal criminal action and the imposition of more than $120 million in fines and disgorgement is a bold and significant statement from federal and state authorities that healthcare providers across the country will be severely punished for engaging in anticompetitive agreements.
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NY DFS Files Enforcement Action Against Opioid Manufacturer for Insurance Fraud

by H. Christopher Boehnig, Roberto Finzi, Michael E. Gertzman, Roberto J. Gonzalez, Brad S. Karp, Elizabeth M. Sacksteder, and Patrick Cordova

On April 16, 2020, the New York Department of Financial Services (“DFS”) issued a Statement of Charges and Notice of Hearing against Irish pharmaceutical company Mallinckrodt plc and several of its U.S. subsidiaries (collectively, “Mallinckrodt”). [1] The administrative hearing will take place on August 24, 2020, before a hearing officer appointed by the DFS Superintendent. According to DFS, Mallinckrodt committed insurance fraud in violation of New York law by allegedly misrepresenting the efficacy and safety of opioids to patients and healthcare professionals, causing an over-prescription of its drugs, the cost of which was ultimately passed on to New York insurance companies and their policyholders. Continue reading

Federal Banking Agencies Encourage Financial Institutions to Offer Small-Dollar Loans: A Response to COVID-19, and Maybe More?

by Jonathan R. Silverstone

On March 26, the Federal Reserve Board (FRB), the Federal Deposit Insurance Corporation (FDIC), the National Credit Union Administration (NCUA), the Office of the Comptroller of the Currency (OCC), and the Consumer Financial Protection Bureau (CFPB) issued an interagency statement encouraging financial institutions to offer small-dollar loans to individuals and businesses impacted by COVID-19 [1]. This statement is one of the latest in a series of releases from the federal banking agencies urging financial institutions to support households and businesses impacted by the outbreak. It is also the most recent development in a larger push by the current administration, predating COVID-19, to get banks back into small-dollar lending. Continue reading

New York Department of Financial Services Emergency Regulations — Mandatory Forbearances for Residential Mortgage Loans

by Mylan L. Denerstein, Matthew L. Biben, James L. Hallowell, Mitchell A. Karlan, Arthur S. Long, and Emil N. Nachman

On March 21, 2020, New York Governor Andrew Cuomo issued an Executive Order relating to  90-day forbearances for borrowers that are suffering financial hardship as a result of the COVID-19 pandemic.  In part, this Executive Order called on the New York Department of Financial Services (DFS) to promulgate emergency regulations in furtherance of the Governor’s directive.  On March 24, 2020, the New York Superintendent of Financial Services, Linda A. Lacewell, promulgated regulations implementing the Executive Order (Emergency Regulations).  Importantly, the Emergency Regulations clarify ambiguities in the Executive Order and demonstrate a focus on consumer and individual forbearances. Continue reading

Controlling Material, Non-Public Information During the Coronavirus Pandemic

by John F. Savarese, Wayne M. Carlin, and David B. Anders 

In an unusual statement issued earlier this week, the Co-Directors of the SEC’s
Division of Enforcement, Stephanie Avakian and Steven Peikin, reminded market
participants of the critical importance of maintaining proper control over the
dissemination of material, non-public information, adhering to the restrictions
imposed by Regulation FD on selective disclosures, and assuring compliance with
policies and procedures designed to prevent insider trading and other conduct that
would undermine market integrity. They stressed in particular that, as companies and
markets cope with the outbreak of COVID-19 and the continuing coronavirus
pandemic, corporate insiders are likely learning new material, non-public information
“that may hold an even greater value than under normal circumstances.”
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FinCEN Guidance in Response to COVID-19

by Elizabeth Davy, Eric J. Kadel, Jr., Sharon Cohen Levin, Shari Leventhal, and John Grein

Background

On March 16, 2020, the Financial Crimes Enforcement Network (“FinCEN”) issued guidance (the “Guidance”) encouraging financial institutions to communicate concerns related to the timely filing of reports required under the Bank Secrecy Act (“BSA”) and identifying several patterns of fraudulent transactions that have emerged since the onset of the COVID-19 outbreak.[1] Continue reading

OFAC Cites the Use of U.S.-Origin Software and U.S. Network Infrastructure in Reaching a Nearly $8 Million Settlement with a Swiss Commercial Aviation Services Company

by H. Christopher Boehning, Jessica S. Carey, Christopher D. Frey, Michael E. Gertzman, Roberto J. Gonzalez, Brad S. Karp, Rachel M. Fiorill, Karen R. King and Jacob A. Braly

On February 26, 2020, the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”) announced a $7,829,640 settlement agreement with Geneva-based Société Internationale de Télécommunications Aéronautiques SCRL (“SITA”), to settle its potential civil liability for 9,256 apparent violations of the Global Terrorism Sanctions Regulations (“GTSR”).[1] The case involved the alleged provision of commercial services and software subject to U.S. jurisdiction for the benefit of certain airline customers designated by OFAC as specially designated global terrorists (“SDGTs”) between April 2013 and February 2018.[2] Continue reading

Will Banks Continue to Have Privileged Access to the Financial Safety Net?

by Dr. Sebastian Schich

A change in banks’ status may be right around the corner. Traditionally, banks have been considered “special” among financial intermediaries. This status in turn has been seen as justifying the backing of bank activities by a publicly-supported financial safety net. The recent wave of innovations in financial services, however, raises the question of whether that assessment is still valid. Many financial services traditionally offered only by banks are now increasingly being offered by other providers, often in more convenient forms for customers and sometimes also more cheaply. The economic functions performed by banks are being unbundled and offered separately or in rebundled form. To paraphrase a widely-used statement attributed to Bill Gates, while banking is needed, banks might not be. Continue reading

The SEC’s Enforcement Network

by Verity Winship

What do the Hampshire Constabulary, Texas Railroad Commission, City of Chicago, and the FBI have in common? One answer is that the U.S. Securities and Exchange Commission thanked each of them for assisting the agency in a securities enforcement action. My article, Enforcement Networks, takes advantage of this routine practice to develop a novel approach to quantifying how networks of domestic and international agencies coordinate in civil enforcement. It maps agency coordination through more than 20 years of SEC acknowledgments. Continue reading