Until recently, most universities might have thought that the topic of money laundering was solely of academic interest for courses in law, criminal justice, or accounting. It is becoming increasingly clear, however, that colleges and universities may be facing increasing risk of exposure to handling criminal proceeds when they accept large cash payments for student tuitions. Two recent sets of developments in Canada and Great Britain show that that risk is more than speculative, and that universities need to revise their policies for accepting currency to minimize that risk. Continue reading
Author Archives: Seth Massey
Sen. Klobuchar Introduces Bill to Significantly Alter Federal Antitrust Law
by Craig A. Benson, Joseph J. Bial, Andrew C. Finch, Andrew J. Forman, William B. Michael, Jane B. O’Brien, Jacqueline P. Rubin, Charles F. (Rick) Rule, Aidan Synnott, Brette Tannenbaum
On February 4, 2021, Sen. Amy Klobuchar (D-MN) introduced the Competition and Antitrust Law Enforcement Reform Act (the “CALERA”), which is co-sponsored by Sens. Blumenthal (D-CT), Booker (D-NJ), Markey (D-MA) and Schatz (D-HI). If enacted, the CALERA would significantly alter existing federal antitrust law by, among other things, establishing new legal standards for anticompetitive mergers and expanding liability for exclusionary conduct. Continue reading
Antitrust and Competition: Investment Firms’ Voting Rights—The Devil is in the Potential Antitrust Liability
by Frédéric Louis, Anne Vallery, Álvaro Mateo Alonso, and Édouard Bruc
On January 27, 2021, the Court of Justice of the European Union (“CJEU”) issued an important ruling regarding an investment fund’s liability for the cartel behaviour of an affiliate. The CJEU confirmed that an investment fund is liable under Article 101 of the Treaty on the Functioning of the European Union based on holding 100% voting rights over an indirect affiliate that participated in a cartel, even though the fund held well below 100% equity in that affiliate during part of the relevant period (see here). This judgement tips the scales towards enforcement and away from key defence principles such as the presumption of innocence, or the requirement to sanction only the actual offender. Nonetheless, it sheds some useful insight for financial investors to mitigate antitrust exposure. Continue reading
The Key Open Questions That Will Determine the Next Four Years of SEC Enforcement
by Charles D. Riely and Michael F. Linden
As President Biden’s administration gets into full swing, many expect future Chairman Gary Gensler’s SEC to take a more aggressive approach to enforcement. Public companies and other market participants are left wondering what, exactly, that means. In this post, we take a detailed look at where the SEC is starting from, what has happened since January 20th, where it goes from here, and what interested parties should be watching for as the “new” SEC ramps up. Continue reading
SEC Changes Enforcement Practice for Settlement Offers in Cases Involving Waivers
by Greg D. Andres, Martine M. Beamon, Angela T. Burgess, Tatiana R. Martins, Uzo Asonye, Robert A. Cohen, Neil H. MacBride, Fiona R. Moran, Paul J. Nathanson, and Kenneth L. Wainstein
Parties considering whether to settle an SEC enforcement investigation or criminal proceeding have a reasonable expectation that they will know the likely consequences of a settlement. This includes whether they can expect to receive a waiver from certain statutory disqualifications. Last week, however, the Acting Chair of the SEC announced that the Enforcement Division will not recommend any settlement offer that is conditioned on the settling party receiving a waiver. If this statement reduces transparency between SEC staff and parties negotiating a possible settlement, the result likely will be a more difficult and protracted process for both sides as it becomes difficult for settling parties to make informed decisions about the full implications of a resolution. Continue reading
What the CFTC’s Settlement with Vitol Inc. Portends about Enforcement Trends
by Joel M. Cohen, Jeffrey L. Steiner, Patrick F. Stokes, Lawrence J. Zweifach, Emily A. Cross, and Darcy C. Harris
On December 3, 2020, the Commodity Futures Trading Commission (“CFTC” or the “Commission”) Division of Enforcement (the “Division”) announced a settlement with Vitol Inc. (“Vitol”), an energy and commodities trading firm in Houston, Texas. This is the first public action coming out of the CFTC’s initiative to pursue violations of the Commodity Exchange Act (“CEA”) involving foreign corruption. The CFTC’s action rests on an aggressive theory that seeks to approach allegations of corruption through its historic ability to pursue fraud and manipulation, which has not yet faced a serious legal challenge. Continue reading
DOJ Announces First False Claims Act Settlement with Borrower and Its CEO for PPP Fraud
by Jessica S. Carey, Michael E. Gertzman, Roberto J. Gonzalez, Loretta E. Lynch, Carl L. Reisner, Jeannie S. Rhee, Richard C. Tarlowe, Jacob A. Braly, and Dana L. Kennedy
On January 12, 2021, the U.S. Attorney’s Office for the Eastern District of California announced the first civil settlement with a borrower for allegedly committing fraud in obtaining a Paycheck Protection Program (PPP) loan, in violation of the False Claims Act (FCA) and the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA).[1] DOJ alleged that the borrower, SlideBelts Inc., and its president and CEO falsely stated in their PPP applications that the company was not “presently involved in any bankruptcy,” which was a condition of PPP eligibility.[2] The settlement was for $100,000, and the company also previously repaid the $350,000 PPP loan. Continue reading
Update on Communist Chinese Military Companies (CCMCs) Sanctions (Part II of II)
by H. Christopher Boehning, Jessica S. Carey, Christopher D. Frey, Michael E. Gertzman, Roberto J. Gonzalez, Brad S. Karp, Xiaoyu Greg Liu, Richard S. Elliott, Rachel M. Fiorill, and Karen R. King
In response to the Trump administration’s CCMC sanctions (discussed in Part I of this post), the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) has released additional guidance and its first two general licenses. The U.S. Department of Commerce also responded to the sanctions; it published on December 21, 2020 the first ever Military End User List pursuant to the Export Administration Regulations as well as a warning that exports to CCMCs will raise red flags and require due diligence. Continue reading
Update on Communist Chinese Military Companies (CCMCs) Sanctions (Part I of II)
by H. Christopher Boehning, Jessica S. Carey, Christopher D. Frey, Michael E. Gertzman, Roberto J. Gonzalez, Brad S. Karp, Xiaoyu Greg Liu, Richard S. Elliott, Rachel M. Fiorill, and Karen R. King
On November 12, 2020, President Trump issued an Executive Order titled “Addressing the Threat from Securities Investments that Finance Communist Chinese Military Companies” (the “Order”), which went into effect on January 11, 2021 (after a 60-day grace period).[1] The Order prohibits U.S. persons[2] from engaging in transactions in publicly traded securities (or any securities that are derivative or otherwise designed to provide investment exposure to such publicly traded securities) of any identified “Communist Chinese Military Companies” (“CCMCs”). In the Order, President Trump cited the national security threat posed by the People’s Republic of China’s (the “PRC”) national strategy of Military-Civil Fusion, and, specifically, the threat posed by PRC companies that sell securities to U.S. investors and then invest this capital to finance the development and modernization of the Chinese military. Continue reading
DOJ Announces First Criminal Indictments for Labor Market Antitrust Violations
by Robert A. Atkins, Craig A. Benson, Andrew C. Finch, Aidan Synnott, and Maria Helen Keane
- The Antitrust Division of the U.S. Department of Justice (DOJ) has announced the first criminal indictments for “no-poach” and wage-fixing agreements.
- These indictments follow a change in policy announced by the DOJ several years ago to pursue such violations as criminal matters, and not merely civil violations.
- Companies with antitrust compliance programs should consider reflecting in their training programs and monitoring mechanisms the DOJ’s stance that naked “no-poach” or wage-fixing agreements are subject to criminal prosecution, and might also consider instituting methods to identify and evaluate such agreements.