Author Archives: Seth Massey

Throwing Down the Gauntlet on Politics and Banking: Office of the Comptroller of the Currency Proposes “Fair Access” Rule

by Arthur S. Long and Samantha J. Ostrom

On November 20, 2020, the Office of the Comptroller of the Currency (“OCC”) proposed a rule to require large national banks and federal savings associations to offer and provide “fair access” to financial services (Fair Access Proposal).[1] The Fair Access Proposal can be seen as a potential preemptive strike against regulatory encouragement of moves to “debank” certain bank customers, such as the fossil fuel industry and agribusiness.  This post contains a summary of the Fair Access Proposal, the OCC’s justifications for it, and the OCC’s asserted legal authority for promulgating it.  The deadline for comments on the Fair Access Proposal is January 4, 2021 – suggesting that the OCC may be seeking to finalize it before a new Comptroller of the Currency is appointed and confirmed. Continue reading →

In Global First, the United Kingdom Moves Toward Mandatory Climate-Related Disclosures by 2025

by Mark S. Bergman, Ariel J. Deckelbaum, Brad S. Karp, Elizabeth M. Sacksteder, Scott P. Grader, Frances F. Mi, William J. O’Brien, David G. Curran, and Sofia D. Martos

On November 9, 2020, a UK taskforce chaired by HM Treasury and made up of UK regulators and government officials (the “Taskforce”) published the Interim Report of the UK’s Joint Government-Regulator TCFD Taskforce (the “Interim Report”), along with a roadmap to achieving its recommendations (the “Roadmap”).[1] The Interim Report concluded that the United Kingdom should move towards mandatory TCFD-aligned disclosures across all sectors of the UK economy over the next five years. The Roadmap presents a five-year timeline of planned or potential regulatory actions or legislative measures across seven categories of organizations: listed commercial companies; UK-registered large private companies; banks and building societies; insurance companies; asset managers; life insurers and regulated pension schemes; and occupational pension schemes. The UK Government expects a significant portion of mandatory requirements to be in place by 2023.

Continue reading →

The Challenge of Addressing Non-Financial Misconduct in UK Regulated Firms

by Matthew Nunan and Martin Coombes

Many UK regulated firms will be currently (re-)assessing staff as fit and proper and training staff on the Financial Conduct Authority’s (FCA’s) (or the Prudential Regulation Authority’s (PRA’s)) Conduct Rules. The FCA has recently banned three individuals from working in the financial services industry for non-financial misconduct outside the workplace. The enforcement actions are, therefore, a timely reminder for regulated firms that the FCA has indicated it will bring an increased focus on how firms deal with non-financial misconduct by employees, both within and outside of the workplace. Continue reading →

A Step Towards More Responsibility in Banking

by Claire A. Hill

Goldman Sachs recently admitted that it conspired to violate the Foreign Corrupt Practices Act’s (FCPA’s) anti-bribery provisions.  It agreed to pay a significant monetary fine and to enter into a deferred prosecution agreement.  These sorts of resolutions are common when companies are charged with violating the law.  But Goldman did something that is not common: it clawed back or reduced compensation for senior executives not directly involved in the wrongdoing.  It clawed back some amounts paid to senior executives during the time the misconduct was occurring, and it reduced 2020 compensation of present top management. Continue reading →

Despite Unprecedented Challenges, SEC’s Division of Enforcement’s 2020 Annual Report Presents Healthy Enforcement Results

by Kara Brockmeyer, Andrew Ceresney, Arian June, Robert B. Kaplan, Julie M. Riewe, Jonathan R. Tuttle, Mary Jo White, Ada Fernandez Johnson, and Mark D. Flinn

On November 2, 2020, the U.S. Securities and Exchange Commission’s (the “SEC” or “Commission”) Division of Enforcement (the “Division”) released its 2020 Annual Report (the “Report”), which details the Division’s activities and results for the period October 1, 2019 to September 30, 2020. The Report highlights the substantial impact of the COVID-19 pandemic on the Division’s activities, including the challenges of moving investigations forward while working remotely and the need to divert significant resources to protecting retail investors by investigating potential pandemic-related misconduct. Continue reading →

The National Rapid Response Strike Force: Reinforcing DOJ’s Commitment to Targeting Health Care Fraud

by David W. Ogden, Ronald C. Machen, Stephen A. Jonas, Ericka Aiken, Cadene Russell Brooks, and Athena Katsampes

On September 30, 2020, the United States Department of Justice (“DOJ”) announced the creation of the National Rapid Response Strike Force (“NRR Strike Force”) within the DOJ’s Health Care Fraud Unit.  The announcement was made in connection with the DOJ’s press release on the largest health care fraud and opioid enforcement action in DOJ history.  Continue reading →

SEC Settles Charges Against BMW AG for Failure to Provide Accurate Disclosure in Rule 144A Bond Offerings

by Mark S. Bergman, Richard A. Rosen, and Tong Yu

On September 24, 2020, the SEC announced[1] settled charges against BMW AG and two of its U.S. subsidiaries for inaccurate and misleading disclosures included in offering memoranda for Rule 144A offerings of bonds in the United States. The enforcement action arose out of improper reporting of retail sales of BMW vehicles. The enforcement action was based on violations of Section 17(a)(2) and (a)(3) of the U.S. Securities Act of 1933 (the “Securities Act”).[2]

This enforcement action is notable in that it is highly unusual for the SEC to pursue disclosure claims against a foreign issuer (that is not an SEC registrant) undertaking an offering of securities in the United States on a private basis. In 2003, the SEC brought an action against Parmalat Finanziara S.p.A. for violations of Section 17(a) in connection with debt offerings in the United States; the claims arose out of the financial scandal involving Parmalat and certain of its senior managers and directors.

Continue reading →

Government Wins Significant Spoofing Conviction

by John F. Savarese, David B. Anders, and Louis J. Barash

Late last week, the government won a jury verdict in a major “spoofing” trial.  United States v. Vorley, No. 18 CR 00035 (N.D. Ill. Sept. 25, 2020).  The jury found that Vorley and his co-defendant violated the federal mail fraud statute by placing orders that they did not intend to execute, in the hope that such orders would move the market and enable them to execute other profitable orders.  Continue reading →

SEC Brings Enforcement Action Against Investment Adviser for Section 13 Beneficial Ownership Reporting Failures

by Andrew J. Ceresney, Matthew E. Kaplan, Nicholas P. Pellicani, Robert B. Kaplan, Julie M. Riewe, and Jonathan R. Tuttle 

On September 17, 2020, the U.S. Securities and Exchange Commission (the “SEC”) announced the institution of a settled cease and desist proceeding against WCAS Management Corporation (“WCAS”), an SEC-registered investment adviser to five private funds operating under the name Welsh, Carson, Anderson & Stowe (the “WC Funds”), for failures to satisfy reporting obligations under Section 13(d) of the Securities Exchange Act of 1934 (the “Exchange Act”). Specifically, the SEC’s Cease and Desist Order (the “SEC’s Order”), which WCAS consented to without admitting or denying the SEC’s findings, found that WCAS caused the WC Funds to violate Section 13(d)(2) and Rule 13d-2 of the Exchange Act by failing to timely update its Schedule 13D to reflect (i) the investment intent to liquidate its reported position in a public company and (ii) the subsequent sales disposing of such position. The SEC’s Order required WCAS to pay a civil penalty of $100,000 and to cease and desist from future violations of the applicable provisions of the Exchange Act. This latest action serves as another reminder of the SEC’s continued focus on beneficial ownership disclosures by institutional investors and the need to implement and adhere to robust controls and procedures to ensure compliance. Continue reading →