Tag Archives: David B. Anders

White-Collar and Regulatory Enforcement: What Mattered in 2020 and What to Expect in 2021

by John F. Savarese, Ralph M. Levene, Wayne M. Carlin, David B. Anders, Sarah K. Eddy, Lauren M. Kofke, Carol Miller, and Tamara Livshiz

As we write this memorandum, a new administration is forming in Washington, with new leadership teams being nominated at DOJ, SEC, CFTC and other regulatory and law-enforcement agencies — thus prompting the question of what these changes may portend for white-collar and regulatory enforcement priorities, trends and policies. Having watched many administrations come and go over the years, our sense is that, in this area at least, continuity tends to prevail over disruption. That said, we can offer the following educated guesses on what to expect going forward:

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Government Wins Significant Spoofing Conviction

by John F. Savarese, David B. Anders, and Louis J. Barash

Late last week, the government won a jury verdict in a major “spoofing” trial.  United States v. Vorley, No. 18 CR 00035 (N.D. Ill. Sept. 25, 2020).  The jury found that Vorley and his co-defendant violated the federal mail fraud statute by placing orders that they did not intend to execute, in the hope that such orders would move the market and enable them to execute other profitable orders.  Continue reading →

Supreme Court Limits SEC Disgorgement Remedy

by John F. Savarese, Wayne M. Carlin, and David B. Anders

In an 8-1 decision issued yesterday in Liu v. SEC (PDF: 193.50 KB), the Supreme Court upheld the SEC’s authority to obtain disgorgement from securities law violators, but also indicated some limitations on the scope of the remedy. Some observers had raised questions about the continued viability of the disgorgement remedy after the Court’s 2017 decision in Kokesh v. SEC (PDF: 2112 KB). Today’s decision makes clear that SEC disgorgement is alive and well. Nevertheless, in light of some comments in today’s opinion, the SEC will likely need to rein in some of its prior practices.

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White Collar and Regulatory Enforcement in the Era of COVID-19

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

When we issued our memorandum (PDF: 231KB) on “what to expect in 2020” concerning white collar and regulatory enforcement developments, we certainly did not expect that just two months later, 41 states would effectively be locked down due to the coronavirus pandemic, many courts would be closed, and governments would be intensely focused on adopting measures responsive to the global health crisis.  What we’re now seeing in the white collar/regulatory world is that, instead of pushing forward at their usual pace, prosecutors and regulators are adjusting to a new reality in which live testimony is impractical, courts are on pause and most everyone is working from home.  It is impossible to predict when the normal cadence of such investigations will resume, but inquiries of all kinds will undoubtedly return to their normal pace and intensity when the crisis abates. Continue reading →

Controlling Material, Non-Public Information During the Coronavirus Pandemic

by John F. Savarese, Wayne M. Carlin, and David B. Anders 

In an unusual statement issued earlier this week, the Co-Directors of the SEC’s
Division of Enforcement, Stephanie Avakian and Steven Peikin, reminded market
participants of the critical importance of maintaining proper control over the
dissemination of material, non-public information, adhering to the restrictions
imposed by Regulation FD on selective disclosures, and assuring compliance with
policies and procedures designed to prevent insider trading and other conduct that
would undermine market integrity. They stressed in particular that, as companies and
markets cope with the outbreak of COVID-19 and the continuing coronavirus
pandemic, corporate insiders are likely learning new material, non-public information
“that may hold an even greater value than under normal circumstances.”
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DOJ Extends FCPA Corporate Enforcement Policy Principles to Non-FCPA Misconduct Discovered in the M&A Context

by John F. Savarese, Ralph M. Levene, David B. Anders, Marshall L. Miller, and Daniel H. Rosenblum

In an important speech, Deputy Assistant Attorney General Matthew Miner of the Department of Justice’s Criminal Division announced on Thursday that DOJ will “look to” the principles of the FCPA Corporate Enforcement Policy (PDF: 50.6 KB) in evaluating “other types of potential wrongdoing, not just FCPA violations” that are uncovered in connection with mergers and acquisitions.  As a result, when an acquiring company identifies misconduct through pre-transaction due diligence or post-transaction integration, and then self-reports the relevant conduct, DOJ is now more likely to decline to prosecute if the company fully cooperates, remediates in a complete and timely fashion, and disgorges any ill-gotten gains. Continue reading →

DOJ Applies Principles of FCPA Corporate Enforcement Policy in Other White-Collar Investigations, Increasing Opportunity for Corporate Declinations

by John F. Savarese, Ralph M. Levene, Wayne M. Carlin, David B. Anders, Marshall L. Miller, and Jonathan Siegel

Late last week, the Department of Justice’s Criminal Division announced at an ABA white-collar conference that it has begun using the FCPA Corporate Enforcement Policy (PDF: 51 KB) as “nonbinding guidance” in other areas of white-collar enforcement beyond the FCPA.  As a result, absent aggravating factors, DOJ may more frequently decline to prosecute companies that promptly self-disclose misconduct, fully cooperate with DOJ’s investigation, remediate in a complete and timely fashion, and disgorge any ill-gotten gains.  As a first example of this approach, the officials pointed to DOJ’s recent decision (PDF: 1,743 KB) to decline charges against Barclays PLC, after the bank agreed to pay back $12.9 million in wrongful profits, following individual charges arising out of a foreign exchange front-running scheme. Continue reading →

SEC Releases New Guidance on Cybersecurity Disclosures and Controls

by John F. Savarese, David A. Katz, Wayne M. Carlin, David B. Anders, Sabastian V. Niles, Marshall L. Miller, and Jonathan Siegel

Yesterday, in keeping with a heightened governmental focus on cybersecurity, as exemplified by the Justice Department’s formation of a new Cyber-Digital Task Force (PDF: 62 KB) earlier this week, the Securities and Exchange Commission announced new guidance on cybersecurity disclosures by public companies (the “Guidance (PDF: 139 KB)”).

Much of the Guidance tracks 2011 interpretive guidance from the SEC’s Division of Corporation Finance and retains a focus on “material” cyber risks and incidents.  However, the expanded details and heightened pressure to disclose indicated in the Guidance, along with its issuance by the Commission itself, signal that the SEC expects public companies to consider more detailed disclosure of cyber risks and incidents, and to maintain “comprehensive” policies and procedures in this area.  The SEC is also encouraging, though not requiring, forward-leaning approaches, such as with respect to disclosures about the company’s cyber risk management programs and the engagement of the board of directors with management on cybersecurity issues.  SEC Chairman Jay Clayton has also directed (PDF: 92 KB) SEC staff to monitor corporate cyber disclosures. Continue reading →

White Collar and Regulatory Enforcement: What to Expect in 2018

by John F. Savarese, Ralph M. Levene, Wayne M. Carlin, David B. Anders, Jonathan M. Moses, Marshall L. Miller, Louis J. Barash, and Carol Miller

Introduction

In our memo last year, we acknowledged that it was close to impossible to predict the likely impact that the newly elected Trump administration would have on white-collar and regulatory enforcement.  (White Collar and Regulatory Enforcement: What to Expect in 2017 (PDF: 240 KB)  Instead, we set out a list of initiatives we urged the new administration to consider, including clarifying standards for when cooperation credit would be given, reducing the use of monitors, and giving greater weight to a company’s pre-existing compliance program when exercising prosecutorial discretion, among other suggestions.  While the DOJ under Attorney General Jeff Sessions has, for example, taken some steps toward clarifying the applicable standards for cooperation and increasing incentives to disclose misconduct in the FCPA area, few other policy choices or shifts in approach have been articulated or implemented.  Continue reading →

Second Circuit Limits Judicial Scrutiny of Deferred Prosecution Agreements

by John F. Savarese, Ralph M. Levene, David B. Anders, Marshall L. Miller, and Christopher R. Deluzio

In an anticipated and important decision, the Second Circuit Court of Appeals overturned a district court’s order requiring the unsealing of an independent monitor’s report detailing HSBC’s compliance with a deferred prosecution agreement. United States v. HSBC Bank USA, N.A. (PDF: 284 KB) (Nos. 16-308, 16- 353, 16-1068, 16-1094, July 12, 2017). In so doing, the Second Circuit substantially limited a district court’s power to scrutinize DPAs, thereby following a course similarly embraced by the D.C. Circuit (as discussed in our prior memo (PDF: 27 KB).

In the district court, Judge Gleeson granted the joint request by DOJ and HSBC to approve the DPA, subject to the Court’s ongoing oversight of the DPA’s implementation pursuant to the Court’s asserted “supervisory authority”—a decision we discussed in our earlier memo (PDF: 21 KB). As part of its oversight, the Court ordered the government to file under seal an independent monitor’s report, which eventually led to a member of the public requesting access to the report. Construing that request as a motion to unseal, the Court granted the motion, finding that the monitor’s report was a “judicial document” subject to the public’s qualified First Amendment right of access. The government and HSBC appealed. Continue reading →