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Category Archives: Uncategorized

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Uncategorized

The CFPB’s Alternative Data RFI: Making Your Response Count

The Consumer Financial Protection Bureau (CFPB) recently issued a Request for Information (RFI) Regarding Use of Alternative Data and Modeling Techniques in the Credit Process, available here.  The deadline for response is May 19.  This post will provide practical advice on how to submit an effective RFI response. The RFI is the latest in a… Continue Reading
Enforcement and Prosecution Policy and Trends, Uncategorized

Caldwell’s Comments Draw Criticism, Apology—But Might Her Advice Be Timely?

It is no secret that top Department of Justice officials in Washington may occasionally be at odds with local prosecutors over charging or investigatory decisions made in U.S. Attorney offices around the country.  Indeed, DOJ Criminal Chief Leslie Caldwell was in the news last week for remarks she made during a Federalist Society luncheon in… Continue Reading
Financial Institution Regulation, Uncategorized

CFPB Accused of Discriminating Against Its Own Employees

Some of the recent items on the Consumer Financial Protection Bureau’s (CFPB) agenda have involved efforts to eliminate alleged discriminatory disparities amongst auto lenders and in connection with other private companies as well. However, the CFPB itself has been accused of discrimination under its own roof.  Specifically, the CFPB is accused of discriminatory pay between… Continue Reading
Securities and Commodities, Uncategorized

Variable Annuities Are Retirement Investment Product of Interest in SEC’s 2016 Examination Priorities

As we discussed yesterday, the Securities and Exchange Commission’s (SEC’s) Office of Compliance Inspections and Examinations (OCIE) released its examination priorities for 2016 on January 11 (the “Examination Priorities”). Retirement investments continue to be an area of focus for OCIE as we march into the new year. Digging deeper into this area, OCIE identified variable… Continue Reading
Anti-Bribery and Corruption, Compliance, Enforcement and Prosecution Policy and Trends, Fraud, Deception and False Claims, Uncategorized

Cooperation, Leniency, Internal Investigations, Self-Incrimination, Privilege and All That Jazz

I recently attended a Fraud Conference in Miami where I heard a French lawyer insisting that since he was a defence advocate, his job was to defend his clients against fraud allegations, not to prosecute them.  Instead of cosying up to the authorities, and self-reporting, he regarded it as his duty to challenge the prosecutor and… Continue Reading
Uncategorized

Possible Life Sentence in Salmonella Case Raises Stakes for Food and Beverage Industry Compliance

Last week, federal prosecutors in Georgia filed papers supporting the local probation office’s U.S. Sentencing Guidelines calculation calling for a sentence of life in prison for Stewart Parnell, the one-time CEO of Peanut Corporation of America (PCA), for his role in a salmonella outbreak. The case is a cautionary reminder for the food and beverage… Continue Reading
Compliance, Enforcement and Prosecution Policy and Trends, Financial Institution Regulation, Uncategorized

CFPB PROPOSAL TO END “PAYDAY DEBT TRAPS” MEETS SERIOUS CRITICISM

A recently released Consumer Financial Protection Bureau (CFPB) plan meant to end “payday debt traps” is meeting serious criticism from industry experts who say the rule, as proposed, would seriously limit short-term borrowing options for American consumers. According to the CFPB, the proposed rulemaking would require lenders to take steps to ensure that consumers are… Continue Reading
Anti-Bribery and Corruption, Enforcement and Prosecution Policy and Trends, Financial Institution Regulation, Fraud, Deception and False Claims, Uncategorized

An Eerie Silence

There’s an eerie silence in the world of fraud prosecutions in the UK. A Libor trial is about to start, a FCA land banking prosecution is on trial at Southwark, but with reporting restrictions, and a couple of weeks ago David Dixon, author of a Ponzi Scheme, pleaded guilty; and Julian Rifat, having entered a… Continue Reading
Compliance, Enforcement and Prosecution Policy and Trends, Fraud, Deception and False Claims, Securities and Commodities, Uncategorized

SEC Awards $500K to Company Officer Whistleblower

On Monday, March 2, the Securities and Exchange Commission (SEC) announced that it will award between $475,000 and $575,000 to a corporate officer who reported “high quality, original information” about a securities fraud. The SEC’s whistleblower program was adopted under the Dodd-Frank Act of 2010 and rewards high quality, original information that results in enforcement… Continue Reading
Anti-Money Laundering, Uncategorized

Mind the Red Flags – FinCEN Issues Penalty for Failure to File SARs on Director’s Suspicious Activity

The U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) recently penalized First National Community Bank (FNCB) $1.5 million for failing to file suspicious activity reports (SARs) despite the existence of significant red flags. As described in FinCEN’s Feb. 27, 2015, press release, the accounts in question were controlled by Michael Conahan, a member of FNCB’s… Continue Reading
Uncategorized

How Does Your Firm Compare? Results from the SEC’s Cybersecurity Examinations

On Feb. 3, 2015, the Securities and Exchange Commission (SEC) published a Risk Alert summarizing observations gleaned from a cybersecurity examination sweep of 57 registered broker-dealers (BDs) and 49 registered investment advisers (IAs). The examination sweep followed an April 2014 announcement that the SEC’s Office of Compliance Inspections and Examinations (OCIE) 2014 Examination Priorities included… Continue Reading
Compliance, Financial Institution Regulation, Immigration and Worksite Enforcement, Uncategorized

Knowingly Employing Unauthorized Workers – Can You Give Employees a Second Chance to Provide Valid I-9 Documentation?

Knowingly employing an unauthorized worker is prohibited by federal law. As a result, I-9 audits are a necessary part of doing business, as the penalties for noncompliance are too severe to ignore this fact. One question arises often during the I-9 audit process: what to do when you discover that an employee has not provided… Continue Reading
Enforcement and Prosecution Policy and Trends, Fraud, Deception and False Claims, Uncategorized

With Record-Setting False Claims Act Recoveries, What Will DOJ Do for an Encore?

Last week, the Department of Justice (DOJ) announced that it had collected a record $5.69 billion in False Claims Act (FCA) settlements and recoveries over the past year, marking the first time that recoveries have breached the $5 billion threshold. The DOJ press release announcing this accomplishment highlighted two key areas of recovery: healthcare and… Continue Reading
Enforcement and Prosecution Policy and Trends, Financial Institution Regulation, Fraud, Deception and False Claims, Uncategorized

FCA Enforcement Performance: Part 2 – The Forex Effect

Only a couple of weeks ago I was commenting on a NERA report that had found that in the period between April 2012 and October 2014 the FCA had imposed fines of over £1bn, in sharp contrast to the preceding decade during which a paltry £320m had been levied. Now, on 12 November 2014, the… Continue Reading
Uncategorized

Financial Conduct Authority Enforcement Performance

NERA Economic Consulting has recently published an analysis of the penalties imposed by the UK financial regulator since April 2012[1].  The startling headline is that the level of fines in the 18 months since April 2012 is over £1bn, whereas in the previous decade fines totaled less than £320m.  What is the reason behind this… Continue Reading
Enforcement and Prosecution Policy and Trends, Sanctions, Trade Embargo, and Export Controls, Uncategorized

Violations of the ITAR, EAR or OFAC Regulations: Mistake or Willful Act?

The laws regarding what can be exported from the U.S. and where those exports can go are complex. Not surprisingly, these laws are violated on occasion. When violations occur, the critical question for enforcement agencies is whether the violations were willful. The answer to that question generally determines whether the violation is treated as a… Continue Reading
Anti-Bribery and Corruption, Compliance, Election and Political Law, Energy Enforcement, Securities and Commodities, Uncategorized

Avoiding Waiver When Disclosing Facts to the Government

All but a handful of courts find that companies disclosing privileged communications or protected work product to the government waive both of those protections. Courts properly analyzing waiver rules also recognize that disclosing historical facts does not cause a waiver – because historical facts are not privileged. In two related cases, Judge Francis of the… Continue Reading
Compliance, Financial Institution Regulation, Securities and Commodities, Uncategorized

An Update on Rule 105 Enforcement

In September, we wrote about the SEC’s enforcement actions against 23 investment firms for violations of Rule 105 of Regulation M (“Rule 105”) in an effort to crack down on the potential manipulation of offering prices of follow-on and secondary offerings. In the last two months, the SEC has furthered Co-Director of Enforcement Andrew Ceresney’s… Continue Reading
Compliance, Enforcement and Prosecution Policy and Trends, Financial Institution Regulation, Fraud, Deception and False Claims, Securities and Commodities, Uncategorized

New Year Brings New Enforcement Efforts Targeting Broker-Dealers

On Dec. 23, SEC spokesman John Nester announced a new task force for scrutinizing broker-dealers. This task force, which began development in November 2013, will work with the SEC’s national exam program and FINRA. According to the agency’s 2013 Financial Report, the task force will focus on current practices within the broker-dealer community and develop… Continue Reading
Compliance, Enforcement and Prosecution Policy and Trends, Financial Institution Regulation, Uncategorized

CFPB Gaining Strength

The Consumer Financial Protection Bureau (CFPB or Bureau), fresh off Director Richard Cordray’s Senate confirmation over the summer, is moving forward with more confidence and purpose in its investigation and enforcement strategies, as we last discussed in our report on the CFPB’s roadmap for “Responsible Business Conduct.” Two recent developments suggest that the Bureau is… Continue Reading