Author Archives: William Walant

Recommendations for Combating Bribery of Foreign Officials

by Kara BrockmeyerAndrew M. LevineBruce E. YannettAda Fernandez Johnson, and Katelyn McNelis

On November 26, 2021, the Organization for Economic Cooperation and Development (the “OECD”) published revised anti-corruption guidelines, the Recommendation for Further Combating Bribery of Foreign Officials (the “2021 Recommendation”). These guidelines update the original recommendation from 2009 and significantly expand the expectations of member countries regarding anti-corruption enforcement.

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The FTC’s Strengthened Safeguards Rule and the Evolving Landscape of Reasonable Data Security

by Jeremy Feigelson, Avi Gesser, Satish Kini, Johanna Skrzypczyk, Lily D. Vo, Corey Goldstein, and Scott M. Caravello

On October 27, 2021, the Federal Trade Commission (the “FTC”) announced significant updates to the Standards for Safeguarding Customer Information (PDF: 835 KB) (the “Safeguards Rule” or “Amended Rule”).  This rule, promulgated pursuant to the Gramm-Leach-Bliley Act, is designed to protect the consumer data collected by non-bank financial institutions, such as mortgage lenders and brokers, “pay day” lenders, and automobile dealerships, among many others (“subject financial institutions”).  The Amended Rule is likely to have a far-reaching ripple effect and inform the meaning of reasonable data security requirements industry-wide.  In this blog post, we highlight the Amended Rule’s more novel requirements and provide an overview of the potential impacts. 

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A Historic First in Consumer Product Safety Act Enforcement: Corporate Criminal Penalties for Late Reporting Under Section 15

by Kelsie Sicinski, Michelle F. Gillice, Jennifer A. Karmonick, and Murad Hussain 

On October 29, the status quo fundamentally changed for consumer product safety enforcement. On that date, the Department of Justice (DOJ) announced the resolution of criminal charges against a Chinese manufacturer and its two subsidiaries under the Consumer Product Safety Act (CPSA). This was the very first corporate criminal enforcement action brought under the CPSA, which resulted in a guilty plea from the US subsidiary, a deferred prosecution agreement (DPA) for the Chinese parent and its Hong Kong subsidiary, and $91 million in monetary penalties and forfeitures. This development makes clear that an intentional delay in reporting a consumer product safety defect, hazard, or risk to the Consumer Product Safety Commission (CPSC) has the potential to lead to both civil and criminal corporate liability under the CPSA.

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Cybersecurity and AI Whistleblowers: Unique Challenges and Strategies for Reducing Risk

by Avi Gesser, Anna R. Gressel, Corey Goldstein, and Michael Pizzi

Several recent developments have caused companies to review their whistleblower policies and procedures, especially in the areas of cybersecurity and artificial intelligence (“AI”).

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The Anti-Money Laundering Act of 2020: The Remarkable Expansion of the U.S. Government’s Subpoena Power Over Foreign Financial Institutions

by Barak CohenDavid B. Massey, Jamie A. Schafer, David Sewell, and Bria M. Cochran

On New Year’s Day 2021, Congress passed the Anti-Money Laundering Act of 2020 (AMLA 2020), which included sweeping reforms aimed at strengthening protections against money laundering, terrorism financing, and other illegal activities. In this post, we examine the AMLA 2020’s remarkable expansion of the U.S. Departments of Justice and Treasury’s subpoena authority over foreign financial institutions, which has significant implications for foreign financial institutions maintaining U.S. correspondent accounts Continue reading

State AGs Tout Role in Protecting Consumers from Crypto Currency Scams

by Divonne Smoyer, Roger Gibboni, Christine Parker, and Jonathan Marcus

One in 10 Americans invested in crypto currencies this year, so it’s no surprise that state and federal agencies are jockeying up to regulate and enforce crypto markets.

That’s because any relatively new (and poorly understood) financial product – in which a significant number of consumers are investing large amounts – is going to draw the attention of regulators and enforcement agencies.

State attorneys general (AGs) are no exception. Now some state AGs are asking how they may investigate potential consumer harms associated with crypto currencies. State AGs have established a significant national footprint in consumer protection, including and particularly over investment products.

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California Enacts Further Restrictions on Use of Nondisclosure Agreements in Discrimination and Harassment Settlements

by Joseph J. Torres and Katherine M. Funderburg

The #MeToo movement caused a significant amount of legislative activity across the country, addressing, among other things, limits on the use of nondisclosure agreements in settlements of sexual harassment claims.[1] Expanding on those protections, California Governor Gavin Newsom has signed into law the Silenced No More Act (S.B. 331), which imposes new, expanded restrictions on the use of nondisclosure agreements (NDAs) in settling bias and harassment claims by employees under various California statutes. The new law, which was passed by the state Senate on August 30, takes effect on January 1, 2022.

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Three Takeaways from the IOSCO Report to Securities Regulators on Artificial Intelligence

by Avi Gesser, Anna R. Gressel, and Mengyi Xu

On September 7, 2021, the Board of the International Organization of Securities Commissions (“IOSCO”) issued a final report (PDF: 446 KB) entitled “The Use of Artificial Intelligence and Machine Learning by Market Intermediaries and Asset Managers” (the “Report”), which aims to assist IOSCO members in supervising their regulated entities over the use of AI and ML.

While non-binding, the Report is likely to serve at least as a key frame of reference—if not as a benchmark—for the development of more tailored supervisory approaches by securities regulators around the globe. While the concepts in the Report are not new, they reflect an acknowledgement that existing regulations may not be sufficient to mitigate the wide variety of AI-risks, and that new and tailored regulations targeting asset managers and market intermediaries’ use of AI may be needed.

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Do Your ESG Disclosures Need Leveling Up? Leading Video Game Company Faces SEC Investigation into Its Harassment and Discrimination Disclosures as It Reaches $18 Million Settlement with EEOC

by Anne Cortina Perry, Anthony S. Barkow, Charles D. Riely, Lori B. Day, Tali R. Leinwand, and Anna Windemuth

Recent activity by two federal regulators underscores an increasingly obvious reality: when a company is confronted with harassment and discrimination complaints, government agencies will scrutinize its response and may bring enforcement actions. For months, video game maker Activision Blizzard (“Activision”) has been dealing with negative publicity and litigation relating to allegations that it allowed pervasive sexual harassment and discrimination to occur and failed to appropriately respond. Just three weeks ago, Activision confirmed that the US Securities and Exchange Commission (“SEC”) was investigating the sufficiency of its disclosures.[1] In the latest news concerning the company, Activision publicly disclosed two weeks ago that it was resolving a case with the US Equal Employment Opportunity Commission (“EEOC”) by making an $18 million payment to establish a victim fund.[2] This client alert analyzes these developments, the other civil and regulatory issues faced by Activision, and discusses steps companies can take when confronted with harassment or other work conduct allegations.

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Cryptoassets at an Inflection Point

by David M. Adlerstein

Cryptoassets and the underlying blockchain technologies are becoming increasingly mainstream, with stablecoins, decentralized finance (DeFi), and digital representation of ownership (NFTs) rapidly gaining footing.  While these technologies have attractive features, and may yet prove revolutionary for our economy, this rapid growth also poses significant risks, implicating longstanding principles of prudential regulation, market integrity, and investor protection.  The challenge facing U.S. regulators and lawmakers is one of balance:  to protect investors and market integrity, and curb excesses that could significantly harm the economy, while preserving the technology’s benefits for market participants and the U.S.’s position at the industry’s vanguard.  Following are some considerations which could help strike an appropriate balance on some of the most salient issues posed by cryptoassets’ rapid growth.

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