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Government Investigations and White Collar Litigation Group

Category Archives: Uncategorized

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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

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

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
Anti-Money Laundering, Compliance, Fraud, Deception and False Claims, Uncategorized

SARs and Confidentiality – When Law Enforcement and Regulators Come Calling

Financial institutions often encounter suspicious transactions that warrant the filing of a suspicious activity report (“SAR”).  When this occurs, the Bank Secrecy Act (“BSA”) and federal regulations specifically prohibit the unauthorized disclosure of the SAR, or any information that may reveal the existence of the SAR. This confidentiality requirement may place certain employees, especially those… Continue Reading

EU takes first step towards a European version of the FCPA

The EU has in a series of votes agreed a draft anti-corruption law to make it illegal for oil, gas and mining companies to give illicit payments to officials in resource-rich nations that lack strong governance...One of the objectives is to help foreign nationals track more easily what happens to monies paid to their own foreign governments, so that they can hold the government ministers accountable for these monies… Continue Reading

RICO suit being pursued in the US, relating to the charges brought against Victor Dahdaleh by the Serious Fraud Office

The RICO suit....reinforces our view that...when defendants become involved in allegations of corruption they may have to face multiple sets of criminal proceedings around the world as well as civil suits and the threat of public procurement debarment in the United States and the European Union. Winning contracts by illegal means can lead to the perfect legal storm.… Continue Reading

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