Category Archives: U.S. Department of Justice (DOJ)

TD Bank Pleads Guilty to Bank Secrecy Act and Money Laundering Conspiracy Violations and Agrees to Pay More Than $3.09 Billion in Criminal and Civil Penalties for “Systemic Breakdown” in Compliance Policies, Procedures, and Processes

Photo courtesy of the author

In any corporate compliance program, chief compliance officers must be mindful that their programs are not guaranteed to maintain consistent levels of funding from year to year. Factors such as expanding or contracting business operations, declining business conditions, or external events such as recessions or COVID may require various year-to-year adjustments in a compliance program’s staffing levels and internal controls operations.[1]

Even so, it is essential that senior management in any company or financial institution recognize and accept the fact that at all times, the compliance programs in their enterprise must be adequately resourced and empowered to function effectively.[2] What a company’s senior leadership may not do, under any circumstances, is to make decisions that, over time, systematically starve critical compliance programs of resources essential to the effectiveness of those programs.

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U.S. Authorities Charge Adani Defendants with Integrity Washing

by Kevin E. Davis

Photo courtesy of NYU

Gautam Adani is the founder of one of India’s largest conglomerates and ranks among the country’s prominent business people. He and his nephew Sagar Adani are learning the hard way that, in the U.S. legal system, the coverup can be treated just about as severely as the crime.

The Department of Justice and the Securities and Exchange Commission have accused the Adani defendants of collaborating with executives of a U.S.-listed Mauritian company called Azure Power Global Ltd. in a massive bribery scheme. The conspirators allegedly paid over USD 250 million in bribes to officials in the governments of several Indian states. The bribes were to induce the officials to purchase power that would be supplied by Adani Green Energy Ltd., an Indian company controlled by the Adani defendants, as well Azure.

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DOJ Announces Changes to Corporate Enforcement Policy at PCCE’s Fall Conference

On November 22, 2024, the NYU Law Program on Corporate Compliance and Enforcement (PCCE) hosted a conference titled “New Directions in Corporate and Individual Enforcement.” At the conference, Nicole Argentieri, Principal Deputy Assistant Attorney General, Criminal Division, U.S. Department of Justice (DOJ), delivered remarks on DOJ’s corporate enforcement policies, including recent policy changes. A note on DOJ’s blog regarding these changes is reprinted below and is available here. More resources on DOJ’s corporate enforcement policies are available here.

Nicole Argentieri, Principal Deputy Assistant Attorney General, DOJ (©Hollenshead: Courtesy of NYU Photo Bureau)

Courtesy of Principal Deputy Assistant Attorney General Nicole M. Argentieri

A crucial element of the Justice Department’s fight against white collar crime is transparency — being clear about what we at the department are doing and why. As someone who has spent significant time as a defense lawyer, I know from personal experience how important it is to be able to explain to your client — whether that client is an individual or a board of directors at a publicly traded company — what is happening in an investigation, how the government might view their actions, and the risks and the benefits of proceeding in a certain way.

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U.S. Attorney Office “Whistleblower” Programs Sow Confusion and Pose Risks to Corporate Whistleblowers

by David Colapinto and Geoff Schweller

Left to right: David Colapinto and Geoff Schweller.(Photos courtesy of Kohn, Kohn & Colapinto LLP)

In recent weeks, a number of U.S. Attorneys’ Offices (USAOs) across the country have rolled out “Whistleblower Pilot Programs” offering the potential of non-prosecution agreements in exchange for voluntary self-disclosure of criminal conduct by participants in non-violent offenses. These “whistleblower” programs, announced within the same timeframe as the Department of Justice’s new Corporate Whistleblower Awards Pilot Program, can sow confusion among would-be-whistleblowers as well as attorneys and pose significant risks to corporate informants as these Pilot Programs differ greatly from other well-known corporate whistleblower programs, such as the Securities and Exchange Commission (SEC) Whistleblower Program.

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The FTC Finalizes Sweeping Changes to HSR Reporting Obligations

by Ilene Knable Gotts, Christina C. Ma, Monica L. Smith and Gray W. Decker

From left to right: Ilene Knable Gotts, Christina C. Ma, Monica L. Smith and Gray W. Decker. (Photos courtesy of Wachtell, Lipton, Rosen & Katz)

On October 10, 2024, the Federal Trade Commission (“FTC”), with the concurrence of the Antitrust Division of the Department of Justice (“DOJ”), announced the FTC’s unanimous vote to adopt a final rule implementing significant changes to the reporting obligations under the Hart-Scott-Rodino Antitrust Improvement Act (“HSR Act”). Though not as extensive and burdensome as the original proposed changes (see our prior memo analyzing the proposed changes), these changes will increase parties’ filing burden and limit their ability to file quickly, even in non-problematic transactions. Absent judicial intervention, the final rule will become effective 90 days after it is published in the Federal Register (i.e., approximately mid-January 2025). The FTC also announced that, once the final rule goes into effect, it will lift the three-and-a-half-year “temporary suspension” of granting early termination of the HSR waiting period in transactions not needing further agency investigation.

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FTC Announces New Enforcement Initiative Targeting Deceptive AI Practices

by Robert A. Cohen, James W. Haldin, Daniel S. Kahn, Maude Paquin, and Michael Scheinkman

Left to right: Robert A. Cohen, James W. Haldin, Daniel S. Kahn, Maude Paquin, and Michael Scheinkman (Photos courtesy of Davis Polk & Wardwell LLP)

The Federal Trade Commission launched Operation AI Comply, announcing enforcement actions against five companies for alleged deception regarding artificial intelligence. The FTC’s actions mark the latest U.S. scrutiny of AI-related misconduct.

Background

On September 25, 2024, as part of a new enforcement “sweep” called Operation AI Comply, the FTC announced enforcement actions against five companies that allegedly used artificial intelligence (AI) to “supercharge deceptive or unfair conduct that harms consumers.” According to the FTC, these cases showcase how “hype surrounding AI” is used to “lure consumers into bogus schemes” and to provide AI-based tools that themselves can be used to deceive consumers. In announcing the actions, FTC Chair Lina Khan stated that “[t]he FTC’s enforcement actions make clear that there is no AI exemption from the laws on the books.”

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DOJ Releases Updated Evaluation of Corporate Compliance Programs Guidance

by Ann Sultan, John E. Davis, and Kathryn Cameron Atkinson

Left to right: Ann Sultan, John E. Davis, and Kathryn Cameron Atkinson. (Photos courtesy of Miler Chevalier Chartered)

On September 23, 2024, in conjunction with a related speech at the Society of Corporate Compliance and Ethics (SCCE) Compliance & Ethics Institute by Principal Deputy Assistant Attorney General (PDAAG) Nicole M. Argentieri, the U.S. Department of Justice (DOJ) released an updated version of its guidance to prosecutors on the Evaluation of Corporate Compliance Programs (updated ECCP). The DOJ last updated this guidance in March 2023. View a redline comparison of the September 2024 updates to the March 2023 version here.

The DOJ’s substantive revisions for this round of updates focused primarily on using data and technology related to various compliance program elements, integrating and adapting to lessons learned from other companies, and reporting. As PDAAG Argentieri noted, the DOJ “regularly evaluate[s] our policies and enforcement tools, including the ECCP, to account for changing circumstances and new risks.”

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Three – No, Four – Important Revisions to the Department’s Policy on the Evaluation of Corporate Compliance Efforts

by Bethany Hengsbach and Steve Solow

From left to right: Bethany Hengsbach, and Steve Solow. Photos courtesy of the authors.

In a speech at the Program on Corporate Compliance and Enforcement at NYU School of Law, Nicole Argentieri, Acting Assistant Attorney General of the Criminal Division, announced key revisions to the March 2023 Evaluation of Corporate Compliance Programs (ECCP). The September 17, 2024 speech was followed by the release of the updated ECCP on the DOJ website. The revised ECCP converts leading edge compliance efforts into standard operating procedures (SOPs) against which companies will be judged by the Department of Justice (DOJ) when making prosecution decisions. The primary changes include three new areas of focus, and a fourth important expansion of a pre-existing idea: Continue reading →

Avoid Kicking the Hornet’s Nest: A Fresh Look at How to Anticipate, Avoid, and Respond to BIS Administrative Subpoenas (Part 2)

by Brent Carlson and Michael Huneke

Brent Carlson and Michael Huneke (photos courtesy of authors)

In Part 2 we pick up where we left off in Part 1 to continue our discussion of how best to avoid an administrative subpoena. We then discuss how best to respond, if and when they cannot be avoided, and conclude with some practical guidance.

Avoid: How to Dissuade BIS from Resorting to Administrative Subpoenas (Continued)

Prepare well for outreach visits

Companies should prepare for outreach visits. Persons who will be meeting or speaking with OEE agents should be well prepared to do so with an eye toward and an awareness of the implications of the information and representations they are providing to BIS. Any and all information that company representatives provide to BIS representatives is fair game for future enforcement and for sharing with other U.S. agencies.

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Avoid Kicking the Hornet’s Nest: A Fresh Look at How to Anticipate, Avoid, and Respond to BIS Administrative Subpoenas (Part 1)

by Brent Carlson and Michael Huneke

Brent Carlson and Michael Huneke (photos courtesy of authors)

Anticipating, avoiding, and responding to administrative subpoenas pose the next in a long line of challenges facing U.S. companies and their legal and compliance teams as the new wave of export controls enforcement unfolds.

The Department of Commerce’s Bureau of Industry & Security (“BIS”) has primed the corporate enforcement engine[1] through (1) public guidance identifying “red flags” indicating a “high probability” of diversion in violation of U.S. export controls, (2) successful criminal prosecutions in partnership with the U.S. Department of Justice (“DOJ”) in the Disruptive Technology Strike Force of intermediaries facilitating diversion,[2] and (3) “supplier list” and “red flag” letters warning companies of the risks of diversion posed by certain counterparties.[3]

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