Subject to Inquiry

Subject to Inquiry

THE LATEST ON GOVERNMENT INQUIRIES AND ENFORCEMENT ACTIONS

Government Investigations and White Collar Litigation Group
Anti-Bribery and Corruption, Sanctions, Trade Embargo, and Export Controls, Securities and Commodities

The Perils of Global Expansion: World’s Largest Ad Agency Sanctioned $19 Million for FCPA Violations, Insufficient Controls

Global expansion without adequate controls is asking for trouble. That’s the lesson of a $19 million settlement between WPP, the world’s largest advertising agency, and the U.S. Securities and Exchange Commission (SEC) to resolve alleged violations of the Foreign Corrupt Practices Act (FCPA).

According to an SEC order memorializing the settlement, WPP’s trouble began when it launched a rapid worldwide growth strategy, acquiring locally operated ad agencies around the world, including some in what the SEC calls “high-risk markets,” like China, Brazil, India, and Peru. The order emphasized that, in purchasing the local agencies, WPP allowed the agencies’ founders to remain in control, an approach that increased the risk that the agencies would continue to operate as they did before being purchased.

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Enforcement and Prosecution Policy and Trends, Financial Institution Regulation

Department of Justice Announces National Cryptocurrency Enforcement Team

On October 6, 2021, the U.S. Department of Justice (DOJ) announced its plans for increased scrutiny of the cryptocurrency market with the creation of a National Cryptocurrency Enforcement Team (NCET) to pursue criminal investigations and actions against cryptocurrency misuse. The NCET will focus on “crimes committed by virtual currency exchanges, mixing and tumbling services, and money laundering infrastructure actors” and will also aid in the tracing and recovery of assets lost to ransomware payments and other fraud and extortion.

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Enforcement and Prosecution Policy and Trends, Fraud, Deception and False Claims

Department of Justice Announces Increased FCA Enforcement Through New Civil Cyber-Fraud Initiative

On October 6, 2021, the Department of Justice (DOJ) announced a new Civil Fraud Cyber Initiative to “combine the department’s expertise in civil fraud enforcement, government procurement and cybersecurity to combat new and emerging cyber threats to the security of sensitive information and critical systems.”

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Compliance

Gleanings From DOJ’s 2021 Healthcare Takedown Announcement

On Sept. 17, the U.S. Department of Justice released the results of its 2021 Healthcare Takedown — an annual announcement aggregating months of investigations and indictments across the country involving fraud in the healthcare and life sciences industries.

Read on for details and analysis of criminal charges against 138 defendants, including 42 medical professionals, related to schemes involving about $1.4 billion in alleged losses to federal healthcare programs.

Compliance

DOJ Title IX Investigation Leads to $1.6M Agreement with San Jose State University

The Department of Justice’s Civil Rights Division, the U.S. Attorney’s Office for the Northern District of California, and San Jose State University (SJSU) settled the government’s Title IX investigation into a decade’s worth of sexual harassment allegations. The June 2020 allegations of “employee-on-student sexual harassment” and retaliation within SJSU’s athletics department prompted the government’s investigation. In September 2021, the government announced its findings against SJSU under Title IX, and its implementing regulations, that SJSU failed to respond to sexual assault allegations even though SJSU had actual notice of these allegations. DOJ found that chief among SJSU’s investigatory failures was its incomplete interview of affected complainants. Additionally, DOJ determined that the school retaliated against two employees, one employee for urging the school to address the sexual harassment, including sexual assault, and the other employee for expressing opposition to retaliation against the reporting employee.

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Enforcement and Prosecution Policy and Trends, Government Contracts

Corporate Campaign Contributions Are a Crime, Independent Expenditures Legitimate: Sixth Circuit Explains the Difference

The Sixth Circuit has upheld the felony conviction of a former state party chair for illegal campaign contributions by a corporation he owned, in a case that both serves as an important reminder of the prohibition on corporate contributions to federal campaigns and shows that the Justice Department may be stepping up criminal election law enforcement while the Federal Election Commission is consumed by deadlock.

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Compliance, Government Contracts

Frequently Asked Questions About the New COVID-19 Vaccine Executive Actions

As McGuireWoods noted in a Sept. 10, 2021, alert, President Biden’s broad six-part strategy to combat the COVID-19 pandemic is raising many questions for employers. While employers await the much-anticipated regulations, a few answers to questions regarding the proposed federal vaccine requirements already are available.

For answers to frequently asked questions about the COVID-19 vaccine executive actions, see our latest alert.

Financial Institution Regulation

Income Share Agreements – Risks, Rewards, and Regulators

An Income Share Agreement (ISA) is a contract in which a lender gives a student money for education, and in return, the student promises to pay the ISA-provider a fixed percentage of the student’s income for a set amount of time after graduation. The student may repay more or less than the amount received, depending on the terms of the ISA.

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Compliance, Enforcement and Prosecution Policy and Trends, Financial Institution Regulation, Securities and Commodities

FINRA’s Important Reminder to Firms—Don’t Forget to Supervise Third-Party Vendors

  1. Overview

Broker-dealers, like most companies, rely on third-party vendors for a wide variety of functions.  This common practice of outsourcing does not relieve a broker-dealer of its regulatory compliance and supervision obligations over the outsourced functions.  Accordingly, management and supervision of third-party vendors present important issues that merit careful attention from regulatory, compliance, and legal departments within a broker-dealer.

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Compliance, Enforcement and Prosecution Policy and Trends, Sanctions, Trade Embargo, and Export Controls

Sanctions and Export Compliance Strategies for Supply Chains

The following is an excerpt from McGuireWoods’ recent contribution to the Global Investigations Review’s (GIR’s) The Guide to Sanctions – Second Edition published in July 2021. Authors Alex Brackett, Pat Rowan and Jason Cowley, each partners in the firm’s Government Investigations and White Collar Litigation department, penned a chapter on the Impacts of Sanctions and Export Controls on Supply Chains. The full publication is available here.

Compliance strategies

Sanctions and export controls can be highly dynamic in the speed with which they can be implemented and adjusted. Accordingly, businesses operating with international supply chains need to be prepared to be equally nimble. Fortunately, there are relatively straightforward and scalable strategies that companies can deploy to ensure they have a robust and effective compliance framework through which to operate, as detailed below.

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