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Government Enforcement Exposed - "The GEE"
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31 Mar 2017 DOJ’s Corporate Compliance Program Guidance Provides Succinct Resource for Companies

  The U.S. Department of Justice (DOJ) Criminal Division, Fraud Section recently issued guidance, “Evaluation of Corporate Compliance Programs,” that provides a succinct resource to guide companies in their review and evaluation of their compliance programs. Notably, this is the first formal guidance on corporate compliance issued by the DOJ under the Trump administration and newly appointed Attorney General Jeff Sessions. Much of the guidance can be gleaned from other sources, such as the United States Sentencing Commission’s “Guidelines Manual” or the “United States Attorneys’ Manual,” however the new guidance is a useful collection of topics and sample questions that may be asked during a fraud investigation.   In its introduction, the guidance references the commonly known “Filip Factors” that “describe specific factors that prosecutors…

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31 Mar 2017 The Yates Memo – DOJ Issues Questions and Answers: Question 3

  *This is the fourth in a series of blog posts that examines seven FAQs issued by the DOJ in response to questions the Yates Memo raised. The third of these questions concerns what a company is not required to do to earn cooperation credit.   Question: What is the cooperating company not required to do?    Answer: In order to receive cooperation credit, the Department of Justice (DOJ) has placed certain formal limitations on the Yates Memo’s reach. For instance, a company is not required to embark on an endless fishing expedition for information, nor is a company required to waive any attorney-client privilege to receive cooperation credit. At times, however, although there are formal limitations, the department’s limitations create an apparent conflict with its practical application….

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28 Mar 2017 Recently Announced: DOJ Will Extend the FCPA Pilot Program

  Acting Assistant Attorney General Kenneth A. Blanco recently announced that the Department of Justice (DOJ) will extend the Foreign Corrupt Practices Act (FCPA) Pilot Program (the Program) beyond the one-year period ending on April 5, 2017. This announcement was made on March 10 at the American Bar Association’s National Institute on White Collar Crime. However, it is unknown whether this will result in a permanent implementation of the Program. Blanco specifically stated that the DOJ will soon begin evaluating the worth and efficacy of the Program, noting that “the Program will continue in full force until we reach a final decision on those issues.”   The Program began on April 5, 2016, not necessarily as a new policy initiative, but instead as a means…

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21 Mar 2017 The Yates Memo – DOJ Issues Questions and Answers: Question 2

  *This is the third in a series of blog posts that examines seven FAQs issued by the DOJ in an effort to clarify certain aspects of its Individual Accountability Policy—as articulated in the “Yates Memo.” The second of these questions concerns what a company is required to do to earn cooperation credit.   Question: What else, in addition to providing the DOJ with all non-privileged relevant information about individuals involved in misconduct, is a company required to do to earn cooperation credit?   Answer: The United States Attorneys’ Manual (“USAM”) identifies several factors that will be considered by the Department of Justice to determine the level of cooperation credit a company will receive. In short, the level of cooperation credit the DOJ will bestow directly correlates with…

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17 Mar 2017 The Yates Memo – DOJ Issues Questions and Answers: Question No. 1

  *This is the second in a series of blog posts that examines seven FAQs issued by the DOJ in an effort to clarify certain aspects of its Individual Accountability Policy—as articulated in the “Yates Memo.” The first of these questions concerns the change in corporate cooperation requirements.   Question: How did the Individual Accountability Policy change the requirements of corporate cooperation?   Answer: Before the Individual Accountability Policy (the “Policy”) took effect, the United States Attorneys’ Manual (“USAM”) identified a company’s “willingness to provide relevant information and evidence and identify relevant actors” as one of several factors that a prosecutor “may consider” in determining the nature and extent of the company’s cooperation. Thus, a company could be eligible for some degree of cooperation credit even…

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15 Mar 2017 The Yates Memo – DOJ Issues Questions and Answers

  *This is the first in a series of blog posts that will examine seven FAQs issued by the DOJ in response to questions the Yates Memo raised. Check back frequently for more in depth analysis and best practices in response to these questions.   The U.S. Justice of Department (DOJ) nearly two years ago announced an uptick in its battle against corporate wrongdoing, taking the fight into boardrooms and offices in pursuit of individuals involved in corporate misconduct. The effort, announced in a memo authored by then-Deputy Attorney General Sally Yates, applied “new” guidance for both criminal and civil matters.   The memo identified four principal goals: (1) deterring future illegal activity; (2) incentivizing change in corporate behavior; (3) ensuring the proper parties are…

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24 Jan 2017 The SEC’s Appointments Clause Dilemma

  The U.S. Securities and Exchange Commission (SEC) has an Appointments Clause problem. Actually, it has two. Currently, the Commission’s ability to make decisions is limited in two ways: (1) as of last Friday, there are now only two sitting Commissioners, including no SEC Chairperson, rather than the full complement of five; and (2) a recent federal appellate court decision declaring the SEC’s process of hiring administrative law judges (ALJs) unconstitutional, thus casting doubt on the many activities those judges perform. Until these can be resolved, the agency’s ability to function generally, and in particular its ability to act as an enforcement agency, may be compromised.   The Appointments Clause of the Constitution states:   [The President] shall nominate, and by and with the Advice and…

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07 Dec 2016 U.S. Supreme Court Decides Salman, Reaffirms Broader View of Insider Trading

  Just like that, the Newman/Salman insider trading saga has come to a close. For now, at least. These cases have generated a good bit of ink on this blog. Yesterday, the U.S. Supreme Court unanimously decided United States v. Salman, affirming Salman’s conviction for insider trading, just two months after oral argument. The opinion, authored by Justice Samuel Alito, was not much of a surprise in what it decided, but was somewhat more interesting in what it did not address.   The Court concluded that Salman lay in the “heartland” of its prior prohibition in Dirks v. SEC. In Dirks, the Court said that a tipper breaches his or her fiduciary duty (and therefore commits insider trading) when the tipper either receives something of…

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18 Oct 2016 Ceresney Warning: Expect Continued SEC Enforcement Activity Regarding Municipal Securities

  In the keynote address at the 2016 Securities Enforcement Forum last week, Andrew J. Ceresney, Director of the SEC’s Division of Enforcement, made clear that the SEC will continue and even expand its focus on the public finance market, particularly in the municipal securities area.   Ceresney noted that enforcement activity in the municipal securities arena has increased substantially. In the 10 years from 2002 to 2012, the SEC filed enforcement action against 6 government entities, 6 obligated persons and 12 public officials. In contrast, the Commission has filed enforcement actions against 76 government entities, 13 obligated persons and 16 public officials in the last 3 1/2 years.   The SEC has been conducting well-publicized enforcement sweeps in the area. Perhaps the most well-known…

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06 Oct 2016 U.S. Supreme Court Revisits Insider Trading in Salman

  At long last, the U.S. Supreme Court heard oral argument yesterday in United States v. Salman. As readers of this blog know from prior posts, Salman is the first insider trading case the Supreme Court has taken in about 20 years and the most important one since Dirks in 1983. In the last two years, a split has developed in the circuit courts with regard to how to define insider trading – a task made more difficult because Congress has never defined what insider trading is, let alone expressly criminalized it.   The Supreme Court said in Dirks that, to have insider trading, the corporate insider must breach his or her fiduciary duty, which often means that the insider sought to, and did, receive…

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