Tag Archives: Linda Chatman Thomsen

How the SEC Enforcement Division Responds to a Crisis

by Martine M. Beamon, Robert A. Cohen, Joseph A. Hall, Gary Lynch, Neil H. MacBride, Stefani Johnson Myrick, Paul J. Nathanson, Annette L. Nazareth, Linda Chatman Thomsen, and Kenneth L. Wainstein

As markets react to the spread of the coronavirus (COVID-19), the SEC has expressed its intent to respond proactively to the impact the crisis has had on capital formation, secondary trading, and investors.  Risks can become heightened during a market downturn, and we expect that the Enforcement Division will concentrate resources on certain types of investigations, including potential:  (1) material misrepresentations and omissions about the impact of the coronavirus on public companies and investment products; (2) trading based on material nonpublic information about changes in the financial performance of public companies; (3) errors in the operation of trading platforms being stressed by high trading volume and volatility; (4) misuse of investor assets, and (5) frauds seeking to take advantage of investor anxiety.  In the coming weeks and months, public companies should be vigilant regarding their disclosure practices and management of material, nonpublic information, and industry professionals similarly should be cautious when describing the impact of the pandemic on their investment services and products. Continue reading →

DOJ Clarifies Corporate Enforcement Policy

by Greg D. Andres, Martine M. Beamon, Angela T. Burgess, Tatiana R. Martins, Robert A. Cohen, Neil H. MacBride, Paul J. Nathanson, Linda Chatman Thomsen, Kenneth L. Wainstein, and Patrick S. Sinclair

On November 20, 2019, the Department of Justice (“DOJ”) modified its Corporate Enforcement Policy to clarify what level of disclosure is expected from companies in the early stages of an investigation. In short, the Policy reaffirms that companies should disclose known information—and the individuals involved—at the outset of investigations, while recognizing companies may not yet know all the relevant facts or individuals at that time.

The Corporate Enforcement Policy, first introduced as a pilot program concerning FCPA-related investigations in April 2016 and formalized in November 2017 by then–Deputy Attorney General Rod Rosenstein, offers incentives to companies that voluntarily disclose misconduct, timely remediate, and cooperate fully with the DOJ. Absent certain aggravating circumstances, a company following these steps can receive a declination assuming it fully disgorges any associated profits.[1] In March 2018, DOJ extended the Corporate Enforcement Policy beyond FCPA violations as nonbinding guidance concerning any corporate investigation. Since the Policy was introduced, DOJ has issued thirteen public FCPA declinations under its terms.[2]

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2016 DOJ and SEC FCPA Resolution Tracker

Courtesy of Davis Polk & Wardwell LLP

On October 27, 2016, Davis Polk presented its 2016 DOJ and FCPA Resolution Tracker, updated through the end of Q3. The tracker details key characteristics of corporate and individual FCPA resolutions, and is available through the link below.

Q3 Highlights include: Continue reading →