by Greg D. Andres, Uzo Asonye, Sidney Bashago, Martine M. Beamon, Robert A. Cohen, Daniel S. Kahn, Tatiana R. Martins, Fiona R. Moran, Paul J. Nathanson, and Patrick S. Sinclair
Top left to right: Greg D. Andres, Uzo Asonye, Sidney Bashago, Martine M. Beamon, and Robert A. Cohen
Bottom left to right: Daniel S. Kahn, Tatiana R. Martins, Fiona R. Moran, Paul J. Nathanson, and Patrick S. Sinclair
(Photos courtesy of Davis Polk & Wardwell LLP)
by Greg D. Andres, Uzo Asonye, Martine M. Beamon, Robert A. Cohen, Daniel S. Kahn, Tatiana R. Martins, Fiona R. Moran, Paul J. Nathanson, and Patrick S. Sinclair
Top left to right: Greg D. Andres, Uzo Asonye, Martine M. Beamon, Robert A. Cohen, and Daniel S. Kahn.
Bottom left to right: Tatiana R. Martins, Fiona R. Moran, Paul J. Nathanson, and Patrick S. Sinclair.
(Photos courtesy of Davis Polk & Wardwell LLP)
In recent speeches, Deputy Attorney General Lisa Monaco and Principal Associate Deputy Attorney General Marshall Miller laid out how the DOJ uses active corporate criminal enforcement and interdepartmental cooperation to preserve national security and the rule of law, and previewed forthcoming compliance guidance on M&A deals.
by Greg D. Andres, Uzo Asonye, Martine M. Beamon, Robert A. Cohen, Daniel S. Kahn, Tatiana R. Martins, Paul S. Mishkin, Fiona R. Moran, Paul J. Nathanson, and David B. Toscano
On May 18, the U.S. Court of Appeals for the Fifth Circuit ruled that the SEC’s administrative proceedings are unconstitutional on three independent grounds. The decision could potentially have a significant impact on the constitutionality of administrative adjudications by other federal agencies as well.
by Greg D. Andres, Uzo Asonye, Martine M. Beamon, Angela T. Burgess, Robert A. Cohen, Daniel S. Kahn, Tatiana R. Martins, Fiona R. Moran, Paul J. Nathanson, and Patrick S. Sinclair
In a pair of speeches, the Assistant Attorney General of DOJ’s Criminal Division emphasized its focus on compliance and announced that he has instructed his prosecutors to consider requiring chief executive officers and chief compliance officers to certify to (1) the accuracy of annual reports submitted pursuant to corporate resolutions, and (2) the effectiveness of their company’s compliance program prior to releasing the company from its obligations under a resolution agreement.
by Greg D. Andres, Martine M. Beamon, Angela T. Burgess, Tatiana R. Martins, Uzo Asonye, Robert A. Cohen, Neil H. MacBride, Fiona R. Moran, Stefani Johnson Myrick, and Paul J. Nathanson
The House of Representatives has passed a bill on a bipartisan basis that would be the first statute directly banning insider trading in the securities markets. The bill largely would preserve current case law, but would expand the scope of insider trading by prohibiting trades based on information obtained by theft or computer hacking. The House passed an identical bill in late 2019 that did not receive a Senate vote, but Senate action may be more likely under current Democratic control.
by Greg D. Andres, Martine M. Beamon, Angela T. Burgess, Tatiana R. Martins, Uzo Asonye, Robert A. Cohen, Neil H. MacBride, Fiona R. Moran, Paul J. Nathanson, and Kenneth L. Wainstein
Parties considering whether to settle an SEC enforcement investigation or criminal proceeding have a reasonable expectation that they will know the likely consequences of a settlement. This includes whether they can expect to receive a waiver from certain statutory disqualifications. Last week, however, the Acting Chair of the SEC announced that the Enforcement Division will not recommend any settlement offer that is conditioned on the settling party receiving a waiver. If this statement reduces transparency between SEC staff and parties negotiating a possible settlement, the result likely will be a more difficult and protracted process for both sides as it becomes difficult for settling parties to make informed decisions about the full implications of a resolution. Continue reading
by Greg D. Andres, Martine M. Beamon, Angela T. Burgess, Tatiana R. Martins, Uzo Asonye, Robert A. Cohen, Neil H. MacBride, Fiona R. Moran, Paul J. Nathanson, and Patrick Sinclair
The National Defense Authorization Act approved by Congress earlier this month would extend to 10 years the time for the SEC to file disgorgement claims for scienter-based violations. It also would toll the limitations period while a party is outside of the United States. As of this writing, the bill has been vetoed by the President, and the House has voted to override the veto. The Senate is currently debating on the override. Continue reading
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
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]
by Greg D. Andres, Martine M. Beamon, Angela T. Burgess, Arthur J. Burke, Ronan P. Harty, Neil H. MacBride, Tatiana R. Martins, Paul J. Nathanson, Howard Shelanski, Jesse Solomon
In a speech on July 11, 2019, Assistant Attorney General Makan Delrahim of the Antitrust Division of the Department of Justice (“DOJ”) announced that, for the first time, DOJ will consider the effectiveness of corporate compliance programs at the charging stage of criminal antitrust investigations. Previously, under the Antitrust Division’s leniency program, only the first participant in the illegal activity to self-report could avoid a guilty plea; other cooperators received credit at sentencing. Companies with effective compliance programs may now receive deferred prosecution agreements, even if they are not the first to self-report. Continue reading