10 Key Takeaways from the Federal Reserve’s Final Rule on CSI and FOIA

by Luigi L. De Ghenghi, Randall D. Guynn, Jai R. Massari, Margaret E. Tahyar, Eric McLaughlin, Daniel E. Newman, and Eric B. Lewin 

The Federal Reserve’s recent updates to its regulations on confidential supervisory information (CSI) and availability of information under the Freedom of Information Act (FOIA)[1] include several meaningful modifications to adapt these rules for the digital age of emails, data rooms and slide decks and the modern organizational structure and operations of banking organizations.  

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Prepared Remarks of Former Special Inspector General for the Troubled Asset Relief Program (“SIGTARP”) Neil M. Barofsky Before the U.S. Senate Committee on Homeland Security and Governmental Affairs (Part III of IV)

by Neil M. Barofsky

These remarks have been edited for length and are being published in four parts. The following post is Part III of Neil M. Barofsky’s prepared remarks, which were delivered on July 28, 2020. For Part I of this post, click here. For part II, click here. 

I will now turn to the various Federal Reserve programs I previously detailed.  For the first two of the Federal Reserve’s key CARES Act facilities mentioned above—the Main Street Program and the Municipal Liquidity Facility—lending is still largely non-existent several months after they were announced, even after the Federal Reserve made repeated attempts to expand eligibility for the programs.  This is, in part, because these facilities were intended by Treasury and the Federal Reserve as a backstop for eligible entities, which by design are intended to become most attractive to borrowers should the debt markets for such entities seize up again.  And it is undeniable that the mere announcement of the Federal Reserve’s programs had the intended effect, helping to restore liquidity to these markets.  But it is a question for Congress as to whether this is enough, and whether these funds should be distributed more immediately to a broader set of struggling entities, on more generous terms.  This would certainly get more money into the economy more quickly, but would also significantly increase the risk of losses, as well as the possibility of depleting funds should the debt markets take a significant turn for the worse. 

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Prepared Remarks of Former Special Inspector General for the Troubled Asset Relief Program (“SIGTARP”) Neil M. Barofsky Before the U.S. Senate Committee on Homeland Security and Governmental Affairs (Part II of IV)

by Neil M. Barofsky

These remarks have been edited for length and are being published in four parts. The following post is Part II of Neil M. Barofsky’s prepared remarks, which were delivered on July 28, 2020. For Part I of this post, click here.

My testimony concerning the effectiveness of the CARES Act will focus on the lending programs administered by the SBA, Treasury, and the Federal Reserve, with specific attention on the most active of these programs, the PPP.  First, there is no question that the PPP has had a significant and positive impact on millions of small businesses, with a recent study by the Federal Reserve and others estimating that it helped preserve more than 2.3 million jobs.[1]  But by no means should there be a declaration of mission accomplished.  Chiefly, there has been a significant lack of transparency by Treasury and the SBA in the program that makes it difficult to fully assess its integrity, fairness (particularly to traditionally underbanked businesses), or overall effectiveness.  In order to fully assess the program, additional measures will be needed to increase transparency and oversight.  In addition, available information suggests that meaningful sums may have been lost or misdirected because the program design elevated the risk of fraud and misuse by borrowers.

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Unexplained Wealth Orders, Explained: The UK Regime and Considerations for the United States (Part II of II)

by Alun Milford and Alicyn Cooley

In Part One of this article, we described the history of Unexplained Wealth Orders (“UWOs”) in England and Wales, and their use by UK authorities to date. As litigation challenging UWOs already has shown, respondents against whom such orders are entered face a binding precedent to the contrary should they seek to persuade a court that a UWO violates their or their spouse’s privilege against self-incrimination. Although the self-incrimination concern presented by UWOs is just one of many reasons that this investigative tool is unlikely to be adopted in the United States, as we detail below, the UWO regime in the United Kingdom presents important considerations—and, potentially, applications—for U.S. authorities. At the same time, the U.S. example of targeted increases in transparency around real estate transactions might give the UK authorities food for thought.

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Schrems II – Where are we now?

by Luke Dembosky, Jeremy Feigelson, Avi Gesser, Jim Pastore,  Friedrich Popp, Christopher Garrett, Fanny Gauthier, Robert Maddox, and Mengyi Xu

As covered in our previous blog post, the CJEU has invalidated the EU-U.S. Privacy Shield for cross-border transfers of personal data from the EU to the U.S. (the “Schrems II” decision) and cast significant doubts over whether companies can continue to use the European Commission-approved Standard Contractual Clauses (“SCCs”) to transfer EU personal data to the U.S., or to other jurisdictions with similarly broad surveillance regimes.

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Prepared Remarks of Former Special Inspector General for the Troubled Asset Relief Program (“SIGTARP”) Neil M. Barofsky Before the U.S. Senate Committee on Homeland Security and Governmental Affairs

by Neil M. Barofsky

These remarks have been edited for length and are being published in four parts. The following post is Part I of Neil M. Barofsky’s prepared remarks, which were delivered on July 28, 2020.

As the former Special Inspector General of the Troubled Asset Relief Program (“SIGTARP”), I established and supervised the audit division that monitored the financial assistance provided to companies and individuals as part of the historic TARP program.  I also provided real-time advice and oversight as the U.S. Department of Treasury (“Treasury”) developed and implemented the programs that are serving as the model for much of what it is using in response to the current crisis.  I regularly reported to Congress on that work.

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Corporate Compliance Approach to Racism and Excessive Force Issues in Police Departments

by Emil Moschella and Joseph Murphy

Today there is an urgent call for reform with respect to race relations in policing, especially in the use of force.  Proposed solutions range from defunding the police to more discrete ideas that address the use of force, de-escalation techniques, dealing with impaired individuals, providing on the scene expertise to work with the police, the quality of internal investigations, discipline, and preventing dismissed law enforcement officers from working in similar positions anywhere in the country. 

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Unexplained Wealth Orders, Explained: The UK Regime and Considerations for the United States

by Alun Milford and Alicyn Cooley

Two and a half years after their introduction in the United Kingdom, unexplained wealth orders (“UWOs”) are garnering more international attention than ever. Litigation surrounding the first UWOs has progressed in English and Welsh courts, clarifying how the law will be applied there and revealing how the authorities have so far sought to use them. In this two-part article, we review the trajectory of UWOs in the United Kingdom, examine what it shows about the English and Welsh approach to self-incrimination issues raised by UWOs, and compare the UWO system to the current civil forfeiture regime in the United States.

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A Decade with Dodd-Frank: How Crisis Drives Meaningful Change

by Jordan A. Thomas 

On July 21, 2010, with the country reeling from a devastating financial crisis, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act, which encompassed comprehensive financial reform the likes of which hadn’t been seen since the Great Depression. Over more than 2,000 pages, the Act created oversight, rules, regulations and various agencies designed to safeguard investors. From the Volcker Rule to the Financial Stability Oversight Council, whistleblower programs for the SEC and CFTC, and dozens of reforms in between, Congress sought to combat both systemic and endemic risk in the commercial markets.

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Selling a COVID-19 “Cure”

by Harry K. Fidler, Murad Hussain, and Kirk Ogrosky

In cities across the country, healthcare and other essential workers have been greeted in the evenings with cheers and clanging pots and pans as they return home from working tirelessly to combat the global pandemic that has changed life as we know it. As these heroes rush to and from the front lines saving lives, government prosecutors and agencies are turning their attention to companies and individuals that are supposedly rushing to promote false treatments for COVID-19. For example, the Department of Justice has announced various fraud charges against doctors and others while the U.S. Food & Drug Administration has issued 90 warning letters (so far) to entities “for selling fraudulent products with claims to prevent, treat, mitigate, diagnose or cure” the disease. In April, the FDA issued one such letter to Genesis II Church for allegedly marketing a bleaching agent as a COVID-19 cure, and the federal government sued the church and its founders (PDF: 239.97 KB) and won a preliminary injunction against their distribution of the product. Then, on June 30, DOJ filed a criminal complaint charging the church’s founders (PDF: 574 KB) with conspiring to defraud the United States and to deliver misbranded drugs, and for criminal contempt for allegedly violating the preliminary injunction.

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