NYU Law’s Program on Corporate Compliance and Enforcement (PCCE)
March 25, 2022
I have been fortunate in my career to have served as a prosecutor, as a defense attorney, and to work as a chief compliance officer of a Fortune 500 company. The detection and prevention of criminal conduct has been a constant across these three roles. Perhaps the most challenging of the three roles has been serving in compliance.
by Sharon Cohen Levin, Anthony Lewis, Eric Kadel, Jennifer Sutton, Claudia Kassner, Samantha Rosenthal, and Sheeva Nesva
On February 4, 2022, the U.S. Department of the Treasury (“Treasury”) published a study identifying art market participants and sectors of the U.S. high-value art market that may present money laundering and terrorist finance risks to the U.S. financial system (the “Study”). The Study also examines efforts that U.S. government agencies, regulators, and market participants might explore to further mitigate these risks. The Study found that the high-value art market is susceptible to abuse by illicit financial actors due to, among other characteristics, its historical culture of anonymity, the transferability of high-value items in the art trade, and the inconsistency in due diligence practices among participants. The Study further cautions that the emerging digital art market embodies all of these qualities. Coupled with the untraditional structure of this submarket’s transactions, the risk of money laundering is heightened in this emerging submarket. Treasury’s recommendations include enhanced private sector information sharing, widespread voluntary anti-money laundering/countering the financing of terrorism (“AML/CFT”) compliance programs, and consideration of international harmonization of regulation.
Under the United Kingdom’s anti-money laundering (AML) legal regime, it has been clear for some time that the United Kingdom Money Laundering Regulations 2007 and 2017 (MLR) apply to multiple business sectors, including accountants, financial service businesses, estate agents, and solicitors.[1] Although some lawyers might still chafe at the notion that they are subject to such regulations, there is no doubt that United Kingdom solicitors, as legal professionals, are obliged to comply with AML legislation.[2]
by David Sarratt, H Jacqueline Brehmer, and Christopher Ford
On January 28, 2022, California Attorney General Rob Bonta announced that his office sent notices alleging noncompliance with the California Consumer Privacy Act (“CCPA”) to a number of companies operating customer loyalty programs. This sweep of notices follows the Attorney General’s initial round issued on July 1, 2020 and was summarized in the Attorney General’s July 2021 enforcement examples, which we analyzed on the Debevoise Data Blog.
By Jan Dunin-Wasowicz and Nicolas Burnichon
On December 21, 2021, the Court of Justice of the European Union (the “Court”), sitting as the Grand Chamber, rendered its judgment in the Bank Melli Iran v. Telekom Deutschland case (the “Judgment”), providing for the first time guidance on the application of Regulation (EC) 2271/96 (the “EU Blocking Statute”). This article reviews the salient aspects of the Judgment and discusses its significance for sanctions compliance from a trans-Atlantic perspective.
by Helena K. Grannis and Jeff J. Shim
Robust interest in ESG-related matters and growing demands from shareholders, regulators and various other stakeholders during 2021 have put management and boards of public companies firmly on notice that strong ESG policies, practices and commitments are key components to long-term organizational success, business resiliency and value creation.
by Antonia Apps, George Canellos, and Isabel Pitaro
The Securities and Exchange Commission (“SEC”) has long wanted to find the right case to pursue so-called “shadow trading,” where insiders armed with material nonpublic information about their own company use that information to trade in the securities of another company whose stock is closely correlated, such as a peer in the same industry.[1] In SEC v. Panuwat, filed last year, the SEC may have found the perfect vehicle for extending the insider trading laws to shadow trading. On January 14, 2022, the SEC secured its first victory in the case, when Judge Orrick of the United States District Court for the Northern District of California denied the defendant’s motion to dismiss in a broadly worded opinion that could have far-reaching implications for public companies and the investment community.[2]
by Benjamin van Rooij and Adam Fine
With each new corporate scandal and case of major illegal corporate behavior or wrongdoing, regulators and prosecutors will face tougher questions about why they have not been able to prevent damages. Increasingly, this will mean that compliance and regulatory enforcement become an ex-ante affair, where corporate managers and government officials seek to influence behavior before damage happens, rather than the ex-post model of assigning liability after the fact or defending the corporation against such liability.
by Peter Hardy, Richard Andreano, Jr., Michael Robotti, and Nikki Hatza
On December 6, FinCEN announced that it was issuing an Advanced Notice of Proposed Rulemaking (“AMPRM”) to solicit public comment on potential requirements under the Bank Secrecy Act (“BSA”) for certain persons involved in real estate transactions to collect, report, and retain information. If finalized, such regulations could affect a whole new set of professionals and one of largest industries in the U.S.—an industry which, heretofore, has not been subject to the requirements of the BSA, with limited exceptions.
by Carmine Boccuzzi, Jr., Jonathan Kolodner, Rahul Mukhi, Boaz Morag, Rathna Ramamurthi, Hyatt Mustefa, and Matthew Slater
The U.S. Court of Appeals for the Second Circuit recently held in U.S. v. Halkbank[1] that a Turkish state-owned bank did not have sovereign immunity from criminal charges that it engaged in a conspiracy to launder $20 billion of Iranian oil and gas proceeds in violation of U.S. sanctions.
While the district court had joined other Circuit courts in ruling that the Foreign Sovereign Immunities Act (“FSIA”) does not confer on foreign sovereigns immunity from criminal prosecutions, the Second Circuit declined to decide that unsettled issue, except insofar as it held that the FSIA is not the only source of criminal jurisdiction over a foreign sovereign. Instead, the Second Circuit assumed arguendo that the FSIA confers immunity in the criminal context and held that the conduct at issue would fall under the FSIA’s commercial activity exception to immunity.