Cyber Insurance Coverage in the Remote Working World

by Una A. Dean, Michael A. Kleinman, and Jasen Fears

The recent mass shift to remote working caused by the global pandemic has provided an ideal breeding ground for both malicious cyber attacks and unintentional data security incidents. Intentional attackers have not only taken advantage of the chaos and fear associated with the pandemic but also capitalized on vulnerabilities newly created by a displaced global workforce. In addition, the use of “home offices” as an employee’s primary, rather than occasional, work environment introduces new technologies and behaviors that can lead to intentional and unintentional network compromises and data losses.
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Is Foreign Bribery Jurisdiction an Element of Economic Sovereignty? Thoughts on Recent Policy Guidance from France and the U.S.

by Michael Huneke and Jan Dunin-Wasowicz

International economic relations have long been fraught with tensions between sovereign interests and jurisdictional claims. A June 2019 parliamentary report commissioned by the Prime Minister of France epitomizes French concerns regarding U.S. extraterritorial jurisdiction and the allegedly disproportional, targeted U.S. Foreign Corrupt Practices Act (“FCPA”) enforcement actions against European companies. These enforcement actions raised suspicions that the U.S. government was merely serving American business interests and related U.S. foreign policy goals. The report has been widely seen as an important step in framing France’s response. This three-part article puts the report in historical context and outlines its significance for the future of anticorruption policy in the transatlantic region and beyond, including recent, significant coordinated resolutions of international anti-corruption investigations by U.S. and French authorities.
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Remaining Attuned to Internal Whistleblower Reports

by John F. Savarese, Ralph M. Levene, and Wayne M. Carlin

The SEC’s whistleblower program has long been a centerpiece of its enforcement efforts. Over the past seven weeks alone, the Commission has announced eight whistleblower awards totaling more than $56 million, including a single award on April 16 of $27 million, the largest of the year and the sixth largest award overall since the inception of the program. Because the coronavirus pandemic has understandably dominated the news over that same period, this striking accumulation of whistleblower awards has received little press attention. But we think these recent awards provide a telling and significant reminder of the critical importance, even in the current challenging environment, of keeping employee hotlines open and of responding to internal compliance reports promptly and effectively.
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U.S. Court of Appeals for the D.C. Circuit Denies Petition for Mandamus Seeking to Protect Privilege When Company Shared Information Developed in Internal Investigations with Company Auditors

by Lori A. Martin, Christopher Davies, Jaclyn Moyer, Harry J. Weiss, and Joseph J. Yu

A mandamus petition is an extraordinary remedy that seeks to compel a lower court to take action in extraordinary cases. The U. S. Court of Appeals for the District of Columbia Circuit has twice granted mandamus petitions vacating district court orders compelling disclosure of documents generated during an internal investigation. On May 1, 2020, however, the D.C. Circuit denied a mandamus petition by RPM International Inc. (RPM) and declined to provide additional guidance on the applicability of the attorney client and work product privileges when sharing information with auditors. RPM had asked the Appeals Court to vacate a district court order requiring RPM to produce unredacted interview memoranda that RPM’s counsel prepared during an internal investigation. [1] The provision of information learned in internal investigations to company auditors during regulatory investigations is a recurring fact pattern. Continue reading →

SEC Charges Company with COVID-19-Related Securities Fraud, Reaffirming Its Focus on Public Statements and Disclosures Relating to COVID-19

by Susanna M. Buergel, Andrew J. Ehrlich, Brad S. Karp, Audra J. Soloway, and Daniel S. Sinnreich

The SEC has, in recent weeks, made highly publicized pronouncements about pursuing enforcement actions arising out of the COVID-19 pandemic. Last week, with remarkable speed, the SEC filed what appears to be its first enforcement action arising out of the COVID-19 pandemic. The complaint alleges that a Florida-based company (Praxsyn Corp.) and its CEO misled investors by falsely stating in various press releases that the company was able to acquire and supply large quantities of N95 or similar masks, when in fact the company never had any masks in its possession, had received no mask orders, and did not have a single contract with any manufacturer or supplier to obtain masks. [1] In its press release, the SEC stated that it “will move swiftly against those who seek to profit off this national emergency by cheating or misleading investors.” [2] Continue reading →

Safeguarding Corporate Compliance Programs During the COVID-19 Crisis

by Kara Brockmeyer, Andrew M. Levine and Philip Rohlik

COVID-19 has altered life for billions, including how companies interact with their employees, business partners, and regulators. Some changes will reverse as the pandemic ebbs or the virus becomes treatable. Others likely will remain for an extended period of time or even become permanent.

No matter the exact course of the coming months, disruptions from COVID-19 already have had a significant impact on corporate compliance functions, internal investigations, and government enforcement. These disruptions will continue to evolve, affecting companies in differing ways and leaving an unmistakable imprint on the compliance landscape. Continue reading →

Florida Cancer Center Admits to Violating the Federal Antitrust Laws; Agrees to Pay More than $120 million in Penalties

by Andrea Agathokolis Murino, James D. Gatta, and Roger Cohen

In the first case of its kind, the Antitrust Division of the U.S. Department of Justice (“DOJ”) announced that it had entered into a deferred prosecution agreement (DPA) with Florida Cancer Specialists & Research Institute LLC (FCS). Specifically, FCS admitted that it violated the federal antitrust laws by participating in a criminal antitrust conspiracy to allocate medical oncology and radiation oncology treatments provided to cancer patients in Southwest Florida for almost two decades. Pursuant to the DPA, FCS agreed to pay the statutory maximum criminal penalty of $100 million, and to cooperate with the DOJ in an ongoing investigation into market allocation in the oncology industry, as well as other conditions. In addition, the Florida Attorney General announced a parallel civil settlement with FCS, requiring FCS to pay more than $20 million in disgorgement for the company’s violations of state antitrust and unfair trade practices laws in connection with the scheme. The announcement of a federal criminal action and the imposition of more than $120 million in fines and disgorgement is a bold and significant statement from federal and state authorities that healthcare providers across the country will be severely punished for engaging in anticompetitive agreements.
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NY DFS Files Enforcement Action Against Opioid Manufacturer for Insurance Fraud

by H. Christopher Boehnig, Roberto Finzi, Michael E. Gertzman, Roberto J. Gonzalez, Brad S. Karp, Elizabeth M. Sacksteder, and Patrick Cordova

On April 16, 2020, the New York Department of Financial Services (“DFS”) issued a Statement of Charges and Notice of Hearing against Irish pharmaceutical company Mallinckrodt plc and several of its U.S. subsidiaries (collectively, “Mallinckrodt”). [1] The administrative hearing will take place on August 24, 2020, before a hearing officer appointed by the DFS Superintendent. According to DFS, Mallinckrodt committed insurance fraud in violation of New York law by allegedly misrepresenting the efficacy and safety of opioids to patients and healthcare professionals, causing an over-prescription of its drugs, the cost of which was ultimately passed on to New York insurance companies and their policyholders. Continue reading →

OFAC Issues Guidance on COVID’s Impact on Compliance and Enforcement

by Paul Marquardt and Chase D. Kaniecki

On April 20, OFAC issued COVID-related guidance indicating that it encourages those subject to its jurisdiction to contact the OFAC staff if they believe they will have difficulty meeting OFAC deadlines (whether reporting deadlines, responses to administrative subpoenas, or other matters). OFAC also encouraged electronic submission of any communications. In our experience, OFAC is still functioning at a relatively high level, remote operations notwithstanding, but the staff has also been flexible in responding to the challenges all institutions face. As OFAC’s guidance and our own experience underline, open communication with the staff is very important. Continue reading →

Price Gouging Considerations in the Wake of COVID-19

By Bryce L. Friedman, Peter Guryan, William T. Russell Jr. and Vanessa K. Burrows

Historically, complaints regarding price gouging have arisen following hurricanes, tornadoes or other natural disasters. These disasters usually affect a limited geographic area and lead to local price increases for food, supplies or gasoline at brick-and-mortar retailers. However, the coronavirus disease 2019 (“COVID-19”) pandemic has resulted in a wave of price gouging complaints in the context of a worldwide public health emergency. COVID-19 price gouging complaints present new challenges because of the combination of the global reach of internet commerce businesses and the global effects of COVID-19. The goods that have primarily been affected thus far include hand sanitizer, sanitizing wipes and face masks, and everyday grocery items like chicken, rice and milk.

There have been a variety of responses to COVID-19 price gouging, including:

Federal legislation, investigation and enforcement.
State investigation and enforcement.
Industry self-regulation.

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