Author Archives: Jonathan Daniel Cohen

Spotlight on Boards

by Martin Lipton, Steven Rosenblum, Karessa Cain, and Hannah Clark 

The ever-evolving challenges facing corporate boards prompt periodic updates to a snapshot of what is expected from the board of directors of a public company—not just the legal rules, or the principles published by institutional investors and various corporate and investor associations, but also the aspirational “best practices” that have come to have equivalent influence on board and company behavior. The ongoing coronavirus pandemic and resulting economic and social turbulence, combined with the wide embrace of ESG, stakeholder governance and sustainable long-term investment strategies, are propelling a decisive inflection point in the responsibilities of boards of directors. The 2016 and 2020 statements of corporate purpose by the World Economic Forum and the 2019 embrace of stakeholder capitalism by the Business Roundtable, together with current statements of policy by most of the leading corporations, institutional investors, asset managers and their organizations, as well as governments and regulators in and outside the United States, lead us to summarize the purpose of the corporation:

Continue reading →

The UK School Algorithm Debacle: Five Lessons for Corporate AI Programs

by Avi Gesser, Anna R. Gressel, and Robin Lööf

The widespread criticism, and partial abandonment, of the algorithm that was used to evaluate UK students serves as useful reminder that corporate AI programs carry significant regulatory and reputational risks, and that careful planning, testing and governance are needed throughout the process to mitigate those risks.

Continue reading →

Chainalysis in Action: Justice Department Demands Forfeiture of 280 Cryptocurrency Addresses Associated with North Korea-Affiliated Exchange Hackers

by Jonathan Levin and Henry Updegrave

Yesterday, the U.S. Department of Justice (DOJ) unsealed a civil forfeiture complaint against the holders of 280 cryptocurrency addresses involved in the laundering of approximately $28.7 million worth of cryptocurrency stolen from an exchange by the North Korea-affiliated hackers known as Lazarus Group. The complaint also analyzes fund movements associated with a second exchange hack the group carried out.

This case highlights the increasingly sophisticated money laundering techniques Lazarus Group is employing in their efforts to launder funds stolen from cryptocurrency exchanges. However, despite these efforts, investigators with the FBI, HSI, IRS-CI, and other agencies were still able to trace the funds to their ultimate destinations. In addition, in some instances, exchanges were able to prevent the hackers from depositing or trading the stolen funds on their platforms.

Continue reading →

Brazil Announces New Anti-Corruption Cooperation Framework; MPF’s 5th Chamber Opposes It

by Kara Brockmeyer, Andrew Levine, Karolos Seeger, Bruce Yannett, Daniel Aun, and Fabricio Archanjo 

On August 6, 2020, Brazilian enforcement authorities announced a technical cooperation agreement focused on leniency agreements under the country’s
Anti-Corruption Law (the “TCA”).[1] The Comptroller-General’s Office (the “CGU”), Attorney-General’s Office (the “AGU”), Ministry of Justice and Public Security (the “MJSP”), and Federal Court of Accounts (the “TCU”) already have executed the TCA, which the Supreme Court (the “STF”) mediated. The Federal Prosecution Service (the “MPF”) is listed also as a signatory and discussed in various provisions, but has not yet executed the TCA. Four days later, the Permanent Advisory Commission on Leniency and Collaboration Agreements of the MPF’s 5th Chamber of Coordination and Revision (the “5th Chamber”)—which focuses on anti-corruption efforts—issued a detailed Technical Note advising the head of the MPF against doing so.[2]

Continue reading →

Beyond Virtue Signaling: Practical Guidance for Effective Board Oversight of Corporate Diversity and Inclusion Commitments

by Saema Somalya 

Since the onset of protests that followed the death of George Floyd on May 25, 2020, more than 35 of America’s largest corporations have put out statements condemning institutionalized racism. These statements, either implicitly or explicitly, acknowledge that a portion of the responsibility for addressing this racism lies with corporate America.[1]  In the weeks and years ahead, corporate boards will be discussing these statements with their CEOs and much hard work will be required to define the appropriate scope of that responsibility and create accountability around it.

Continue reading →

ESG Disclosures: The Push for Consistent and Comparable Standards – Europe

by Mark S. Bergman, Ariel J. Deckelbaum, Jeh Charles Johnson, Brad S. Karp, Loretta E. Lynch, Richard A. Rosen, and Audra J. Soloway

Key Takeaways

  • The European Union has taken a leading role in advancing ESG disclosure requirements across the full spectrum of sustainability topics. Some of the initiatives are focused largely on climate issues, while others address the broader sustainability landscape.
  • In the absence of international consensus on ESG disclosure requirements, EU regulations and guidance could begin to shape disclosure in other jurisdictions.

Continue reading →

A Path to Data-Driven Health Care Enforcement

by Jacob T. Elberg

In recent years, the U.S. Department of Justice (DOJ) has increased guidance to entities regarding government expectations as to what I refer to as “compliant behaviors” – maintenance of an effective pre-existing compliance program, post-enforcement adoption of an effective compliance program, cooperation with a government investigation, and self-disclosure of misconduct – and increased transparency in criminal cases as to the benefits defendants can expect to receive for engaging in those behaviors. In the health care industry, however, it is not criminal prosecution but the civil False Claims Act (FCA) which represents the government’s primary means of fraud enforcement. With no parallel increase in transparency with regard to FCA cases, the health care industry and the defense bar have expressed skepticism regarding the actual payoff they might realize by engaging in compliant behaviors, even as resources devoted to health care compliance have skyrocketed. DOJ’s response has been a series of public statements amounting to, “trust us, they matter,” and there has been no mechanism to test those assurances – until now.

Continue reading →

Prepared Remarks of Former Special Inspector General for the Troubled Asset Relief Program (“SIGTARP”) Neil M. Barofsky Before the U.S. Senate Committee on Homeland Security and Governmental Affairs (Part IV of IV)

by Neil M. Barofsky

These remarks have been edited for length and are being published in four parts. The following post is Part IV of Neil M. Barofsky’s prepared remarks, which were delivered on July 28, 2020. For Part I of this post, click here. For part II, click here. For Part III click here. 

With so much public money at stake, it is critical that Congress do what it can to ensure that government aid is not being stolen, wasted, or given to political cronies.  It is just as critical, as already noted, that taxpayers are aware of how and to whom their money is being distributed.  In the CARES Act, Congress demanded comprehensive oversight to guard government aid, and provided what was described as overlapping and redundant oversight entities to ensure full coverage.  It also included some conflicts of interest provisions intended to prevent government officials and their families from benefitting from certain programs.

Continue reading →

10 Key Takeaways from the Federal Reserve’s Final Rule on CSI and FOIA

by Luigi L. De Ghenghi, Randall D. Guynn, Jai R. Massari, Margaret E. Tahyar, Eric McLaughlin, Daniel E. Newman, and Eric B. Lewin 

The Federal Reserve’s recent updates to its regulations on confidential supervisory information (CSI) and availability of information under the Freedom of Information Act (FOIA)[1] include several meaningful modifications to adapt these rules for the digital age of emails, data rooms and slide decks and the modern organizational structure and operations of banking organizations.  

Continue reading →

Prepared Remarks of Former Special Inspector General for the Troubled Asset Relief Program (“SIGTARP”) Neil M. Barofsky Before the U.S. Senate Committee on Homeland Security and Governmental Affairs (Part III of IV)

by Neil M. Barofsky

These remarks have been edited for length and are being published in four parts. The following post is Part III of Neil M. Barofsky’s prepared remarks, which were delivered on July 28, 2020. For Part I of this post, click here. For part II, click here. 

I will now turn to the various Federal Reserve programs I previously detailed.  For the first two of the Federal Reserve’s key CARES Act facilities mentioned above—the Main Street Program and the Municipal Liquidity Facility—lending is still largely non-existent several months after they were announced, even after the Federal Reserve made repeated attempts to expand eligibility for the programs.  This is, in part, because these facilities were intended by Treasury and the Federal Reserve as a backstop for eligible entities, which by design are intended to become most attractive to borrowers should the debt markets for such entities seize up again.  And it is undeniable that the mere announcement of the Federal Reserve’s programs had the intended effect, helping to restore liquidity to these markets.  But it is a question for Congress as to whether this is enough, and whether these funds should be distributed more immediately to a broader set of struggling entities, on more generous terms.  This would certainly get more money into the economy more quickly, but would also significantly increase the risk of losses, as well as the possibility of depleting funds should the debt markets take a significant turn for the worse. 

Continue reading →