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”).
New York Expands Whistleblower Law
by Harris M. Mufson, Gabrielle Levin, Jason C. Schwartz, and Katherine V.A. Smith
New York Governor Kathy Hochul recently signed a new law dramatically expanding protections for whistleblowers in New York. New York’s whistleblower law (New York Labor Law Section 740) previously limited anti-retaliation protections to employees who raised concerns about “substantial and specific danger to the public health and safety” or “health care fraud”. As outlined below, the amended law, which will go into effect on January 26, 2022, expands the scope of who is protected and what is deemed “protected activity” under Section 740. It also contains additional key changes and requirements for employers.
Virtual Currency Platforms and Ransomware Attacks: OFAC Advisories Highlight Increasing Overlap of Sanctions and Cybersecurity Risks Associated with Virtual Currency Platforms and Ransomware Attacks (Part I of II)
by John Barker, Ronald Lee, Soo-Mi Rhee, Tal Machnes, and Christine Choi
This is part I of a two-part post. For Part II, click here.
In the last few months, the Office of Foreign Assets Control (OFAC) of the US Department of Treasury (Treasury) has issued two advisories that highlight the heightened US sanctions risk associated with cyber related activities, including ransomware attacks and the virtual currency platforms that ransomware payers often use to facilitate payments.
Carlin Speech Signals DOJ White Collar Enforcement Priorities
by Greg Andres, Uzo Asonye, Martine Beamon, Robert Cohen, Daniel Kahn, Tatiana Martins, Paul Marquardt, Fiona Moran, Paul Nathanson, and Daniel Stipano
Principal Associate Deputy Attorney General John Carlin previewed the Department of Justice’s (“DOJ”) refocused corporate enforcement efforts during a speech on October 5, 2021 at GIR Connect: New York. Carlin’s speech underscored the primary levers a new administration can pull to quickly and meaningfully impact the white collar enforcement space: messaging increased white collar enforcement to relevant stakeholders, instituting new and revising existing policies, creating dedicated taskforces, and increasing resources for white collar enforcement. Carlin addressed each of these categories by outlining key DOJ priorities, including increased enforcement related to sanctions, export controls, and cryptocurrency; continued expansion of international cooperation and coordination; a “surge” in resources, exemplified by a new dedicated FBI squad for Foreign Corrupt Practices Act (“FCPA”), market integrity, and health care fraud investigations; an upcoming review and revision of corporate enforcement policies; continued and increased use of data-driven enforcement techniques; enhanced and expanded international cooperation; and a warning regarding companies’ compliance with subpoenas and the terms of resolution agreements.
The Anti-Money Laundering Act of 2020: The Remarkable Expansion of the U.S. Government’s Subpoena Power Over Foreign Financial Institutions
by Barak Cohen, David 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
Face Forward: Strategies for Complying with Facial Recognition Laws (Part II of II)
by Jeremy Feigelson, Avi Gesser, Anna Gressel, Andy Gutierrez, and Johanna Skrzypczyk
This is Part 2 in a two-part series of articles about facial recognition laws in the United States. In Part 1, we discussed how current legislation addresses facial recognition. In this part, we assess where the laws seem to be heading and offer some practical risk reduction strategies.
What’s Old Is New Again: DOJ’s New Corporate Criminal Enforcement Policies Equip Prosecutors with More Tools and Information
by Alicyn Cooley and Matthew Levine
The approach of the Biden Justice Department to corporate and financial crime continues to emerge—or re-emerge. Corporations with federal criminal exposure must now, again (PDF: 463 KB), provide information on all individuals responsible for misconduct in order to receive cooperation credit from the Department of Justice. And corporations which resolve that exposure pursuant to Deferred Prosecution Agreements (DPAs) or Nonprosecution Agreements (NPAs) with DOJ will also now face the increased likelihood of independent monitorships—the use of which waned considerably in recent years, even before the Trump administration explicitly discouraged imposing them in 2018 (PDF: 4.9 MB).
In keynote remarks delivered yesterday at the American Bar Association’s National Institute on White Collar Crime, Deputy Attorney General Lisa Monaco announced these and other new DOJ policies and initiatives, all of which are reminiscent of the Obama Administration’s approach to corporate criminal enforcement. In particular, companies and practitioners should take note of DOJ’s stated commitments to: (1) equipping prosecutors with more information and tools—including monitors—to root out corporate crime and ensure corporations comply with the law and the requirements of their agreements with DOJ; (2) proactively using data accumulated about past corporate resolutions, including taking into account corporations’ full criminal and regulatory histories; and (3) standardizing approaches to corporate enforcement across DOJ and the U.S. Attorneys’ Offices.
Digital Asset Developments: U.S. Commodity Futures Trading Commission Asserts That Tether Is a Commodity
by Arthur Long and Jeffrey Steiner
On October 15, 2021, the Commodity Futures Trading Commission (CFTC) issued an enforcement order (Tether Order) against the issuers of the U.S. dollar Tether token (USDT), a leading stablecoin, and fined those issuers $41 million for making untrue or misleading statements about maintaining sufficient fiat currency reserves to back each USDT “one-to-one.”[1] In so doing, the CFTC asserted that USDT is a “commodity” under the Commodity Exchange Act (CEA).
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.
Bank Relationships with Fintechs
by Jai R. Massari, Eric McLaughlin, Gabriel D. Rosenberg, Margaret E. Tahyar, Zachary J. Zweihorn, Adam Greene, and Dana E. Seesel
Federal banking regulators continue to signal their attention to banks’ relationships with third parties, and particularly with fintechs. We think that these developments should be of interest to larger banking organizations as well.