Subject to Inquiry

Subject to Inquiry

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Government Investigations and White Collar Litigation Group

Category Archives: Enforcement and Prosecution Policy and Trends

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

The Yates Memo and Individual Representation

At the November 2, 2016 Securities Industry and Financial Markets Association (“SIFMA”) Compliance and Legal Society Regional Seminar in New York, a SIFMA panel discussed the “Yates Memo,” its effect on internal investigations, and considerations regarding individual representation. The Yates Memo is a September 9, 2015 memorandum issued by Deputy Attorney General Sally Yates to… Continue Reading
Enforcement and Prosecution Policy and Trends

Debt Collection Practices Under Scrutiny of CFPB and NY Attorney General

On November 2, the Consumer Financial Protection Bureau (CFPB) and New York Attorney General filed a lawsuit in federal district court in New York over an alleged “massive, illegal debt-collection scheme” that supposedly involved improperly increased debts and threats of arrest or legal action against delinquent borrowers. Douglas MacKinnon and Mark Gray are accused of… Continue Reading
Enforcement and Prosecution Policy and Trends

Identifying Enforcement Innovations to Prepare for the Post-Yates Enforcement Environment

During a recent webinar sponsored by the Washington Legal Foundation, we explored the impacts intensive individual-focused criminal enforcement can have on an industry, using the recent history of criminal enforcement of food safety laws as a case study.  The individual prosecutions we discussed in that context were based in large part on application of the… Continue Reading
Anti-Bribery and Corruption, Anti-Money Laundering, Compliance, Enforcement and Prosecution Policy and Trends

UK set to shake up Corruption and Money Laundering Enforcement

The UK Government introduced the Criminal Finances Bill to Parliament today (13 October 2016), which will now start its passage through the parliamentary approval process before becoming law. The Government hopes that the Bill “will significantly improve the government’s ability to tackle money laundering and corruption, recover the proceeds of crime, and counter terrorist financing”, and… Continue Reading
Enforcement and Prosecution Policy and Trends, Financial Institution Regulation

D.C. Circuit Rebukes CFPB in PHH Case

In a major setback for the Consumer Financial Protection Bureau (“CFPB”), the D.C. Circuit issued a significant ruling today that found the CFPB’s single director structure unconstitutional, ruled against the CFPB on important statutory interpretations – including the Bureau’s position that it was not subject to any statute of limitations in enforcement proceedings – and… Continue Reading
Compliance, Enforcement and Prosecution Policy and Trends, Financial Institution Regulation

I Can’t Get No (Financial Product) Satisfaction: CFPB Complaint Database Exceeds One Million Complaints

On September 27, the Consumer Financial Protection Bureau (CFPB) released its Monthly Complaint Report capturing a high-level snapshot of trends in consumer complaints.  In conjunction with releasing its September Report, the CFPB confirmed it has handled over one million consumer complaints.  The CFPB describes consumer complaints as “submissions that express dissatisfaction with, or communicate suspicion… Continue Reading
Compliance, Enforcement and Prosecution Policy and Trends, Financial Institution Regulation

Payment Processor Challenges CFPB’s Allegation That It Engaged in Unfair Practices

The Consumer Financial Protection Bureau’s (“CFPB”) lawsuit against payment processor Intercept Corporation remains pending, and recent briefing sheds light on what could result in broad implications for the payment processing industry and CFPB enforcement at large. We previously reported on the CFPB’s suit against Intercept, pending in district court in North Dakota.  The CFPB alleges… Continue Reading
Enforcement and Prosecution Policy and Trends

California Court Hands CFPB a Noteworthy Victory Against CashCall, Inc.

In a closely watched case pending in the United States District Court for the Central District of California, the CFPB obtained a significant victory against CashCall Inc. (“CashCall”) and its affiliates.  The Court’s decision to grant the CFPB summary judgment on the issue of liability is noteworthy because it could have significant ramifications on a… Continue Reading
Energy Enforcement, Enforcement and Prosecution Policy and Trends, Fraud, Deception and False Claims

Court Holds FERC De Novo Review to Proceed as “Ordinary Civil Action”

Last week, a federal district judge ruled for the first time that the “review de novo” promised by section 31(d) of the Federal Power Act (“FPA”), 16 U.S.C. § 823b(d), will be “treated as an ordinary civil action requiring a trial de novo.”  FERC v. Maxim Power Corp., Civ. No. 3:15-30113-MGM, at 2 (D. Mass.… Continue Reading
Compliance, Enforcement and Prosecution Policy and Trends

BancorpSouth Bank Agrees to Pay More Than $10 million to Settle Charges of Redlining and Discrimination in Mortgage Underwriting and Pricing

On June 29, the Consumer Financial Protection Bureau (CFPB), the Department of Justice (DOJ), and BancorpSouth Bank (BancorpSouth) agreed to settle allegations of redlining and discrimination in violation of the Equal Credit Opportunity Act and the Fair Housing Act.  Notably, this case marks the second instance of the CFPB’s new approach to redlining analysis, which,… Continue Reading
Enforcement and Prosecution Policy and Trends

SEC Announces Settlement with Investment Advisory Firm Regarding Alleged Failure to Disclose Costs to Investors

On July 14, 2016, the Securities and Exchange Commission announced the settlement of an enforcement action against RiverFront Investment Group (“RiverFront”), an investment advisory firm, for failing to properly prepare clients for transaction costs. At issue is a wrap fee program, in which a subadviser uses a sponsoring brokerage firm to execute their trades on… Continue Reading
Compliance, Enforcement and Prosecution Policy and Trends, Financial Institution Regulation

CFPB’s Supervisory Highlights Regarding Auto Lending

The Consumer Financial Protection Bureau (“CFPB”) recently issued its Supervisory Highlights – Issue 12, Summer 2016 report, addressing, among other industries, automobile origination.  The report reflects supervisory activity generally completed between January 2016 and April 2016 and makes it clear that there is increased scrutiny and consumer complaint activity in the auto lending industry.  The… Continue Reading
Enforcement and Prosecution Policy and Trends

Prison Sentence for Executives in Contaminated Egg Case Highlights Food Safety Risks

Last Thursday, July 7, 2016, a divided panel of the U.S. Court of Appeals for the 8th Circuit upheld a three-month jail sentence against Austin “Jack” DeCoster and his son Peter, the CEO and COO respectively of Quality Egg LLC.  The CDC determined that Quality Egg was responsible for a salmonella outbreak that ultimately sickened… Continue Reading
Anti-Bribery and Corruption, Enforcement and Prosecution Policy and Trends

SEC Highlights Model Response to Evidence of FCPA Violations, Announces Non-Prosecution Agreements

On June 7, the Securities and Exchange Commission (SEC) announced two non-prosecution agreements (NPAs) following a pair of investigations into alleged violations of the Foreign Corrupt Practices Act (FCPA).  Both companies were ensnared by the FCPA through the conduct of their foreign subsidiaries.  The way the companies responded to the apparent violations provides a potential… Continue Reading
Enforcement and Prosecution Policy and Trends, Financial Institution Regulation, Securities and Commodities

A Circuit Split is Born. Eleventh Circuit Rules Declaratory Relief and Disgorgement Sought by the SEC Are Subject to 5-Year Statute of Limitations. Injunctive Relief is Not.

On May 26th, the Eleventh Circuit held that declaratory relief and disgorgement sought by the SEC are subject to the 5-year statute of limitations under 28 U.S.C. § 2462, but injunctive relief is not.  The court’s holding that § 2462 applies to disgorgement creates two circuit splits:  one with the D.C. Circuit, which has held… Continue Reading
Compliance, Enforcement and Prosecution Policy and Trends, Securities and Commodities

The SDNY Provides Guidance on a Company’s Duty to Disclose Government Investigations

Due to the absence of instructive case law and interpretative guidance from the U.S. Securities and Exchange Commission (SEC), companies are often left in the dark with regard to whether and/or when they should publicly disclose that they are under investigation.  The Southern District of New York recently provided much-needed guidance on the issue. On… Continue Reading
Election and Political Law, Enforcement and Prosecution Policy and Trends, Fraud, Deception and False Claims, Securities and Commodities

AN IMPORTANT CHECK ON THE ABUSE OF GOVERNMENT AUTHORITY

As citizens of a nation founded on the rule of law, we depend upon law enforcement and prosecutors to protect us from harm and from those who infringe our liberty.  In exchange for this protection, we permit these public servants to exercise authority and at times great power.  Thankfully, and it should go without saying,… Continue Reading
Compliance, Enforcement and Prosecution Policy and Trends, Financial Institution Regulation

CFPB’s First-Ever Data Security Enforcement Action

Earlier this month, the Consumer Financial Protection Bureau (CFPB) made headlines by bringing its first enforcement action in the data security space.  Dwolla, Inc., an Iowa-based online payment processor, was the CFPB’s target.  According to CFPB Director Richard Cordray, “With data breaches becoming commonplace and more consumers using these online payment systems, the risk to… Continue Reading
Enforcement and Prosecution Policy and Trends, Fraud, Deception and False Claims, Securities and Commodities

SEC Describes Recent Efforts to Combat Pyramid Schemes and Affinity Frauds

Over the past two years, the Securities and Exchange Commission (SEC) has stepped up enforcement actions against pyramid schemes and related affinity frauds. Last week, in a speech at the University of Illinois at Chicago, Andrew Ceresney, director of the SEC’s Enforcement Division, addressed his division’s most recent efforts to combat these frauds. In particular,… Continue Reading
Enforcement and Prosecution Policy and Trends, Fraud, Deception and False Claims

Developer Facing 230-Year Sentence Illustrates Necessity of Full and Accurate Disclosure

Demonstrating the importance of full and accurate disclosure, a Chicago commercial real estate developer faces a maximum sentence of 230 years in prison for misrepresenting his company’s finances. After a two-week trial, on February 24, a jury found Laurance Freed, president of Joseph Freed and Associates LLC (JFA), guilty of bank fraud, mail fraud, and… Continue Reading
Anti-Bribery and Corruption, Compliance, Enforcement and Prosecution Policy and Trends, Securities and Commodities

Key Takeaways From This Year’s Early FCPA Enforcement Actions

February has been a big month for U.S. Foreign Corrupt Practices Act (FCPA) enforcement. It started with the U.S. Securities and Exchange Commission (SEC) quietly resolving a string of relatively small matters.  Then, at the end of last week, the SEC and U.S. Department of Justice (DOJ) entered into a global resolution with VimpelCom in… Continue Reading
Enforcement and Prosecution Policy and Trends

Justice Scalia’s Death Could Affect Outcomes in Class Action Cases

Government investigations and white collar litigation matters often lead to class action lawsuits by plaintiffs. The Subject to Inquiry Blog takes this opportunity to highlight the potential effects the death of the late Justice Antonin Scalia may have on class action cases before the Supreme Court. Justice Scalia was a reliably consistent critic of federal… Continue Reading

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