Subject to Inquiry

Subject to Inquiry


Government Investigations and White Collar Litigation Group
Compliance, Enforcement and Prosecution Policy and Trends

Courts Adopt Varying Approaches to Implementing Due Process Protections Act

In a December 2020 article, we highlighted in this blog the amendment of Federal Rule of Criminal Procedure 5(f) in the new Due Process Protections Act (“DPPA” or “the Act”). The Act requires federal courts to enter a Brady order at the outset of all criminal cases and may prompt courts to enter orders setting specific disclosure rules, making it easier to hold prosecutors in contempt for violating such orders. In the five months since the Act went into effect, Courts have varied in their implementation of Rule 5(f), suggesting that discovery orders under the new rule will vary based on the leanings of each particular judge, district, or circuit, and the requirements of each individual case. To date, some courts have decided to succinctly recite the language of Rule 5(f) in their initial orders, essentially reminding the prosecution of its pre-existing discovery obligations. Others are taking a more expansive view in implementing the revised rule, issuing specific and detailed orders addressing the timing, order, and scope of the prosecution’s discovery obligations. Continue Reading

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

COVID-19 Fraud Surge: Criminal Enforcement of Pandemic-Related Fraud Reaches “Unprecedented Pace,” DOJ Warns

While the spread of COVID-19 may finally be slowing, government enforcement of pandemic-related fraud is not. It is surging. And that may explain why you are hearing from the government more than usual, or will soon.

The U.S. Department of Justice (DOJ) announced last week that it has now charged nearly 500 defendants with crimes involving COVID-19 related fraud, warning that its coordinated enforcement efforts are moving at an “unprecedented pace and tempo.”

“The Department of Justice has led an historic enforcement initiative to detect and disrupt COVID-19 related fraud schemes,” said Attorney General Merrick B. Garland. “The impact of the department’s work to date sends a clear and unmistakable message to those who would exploit a national emergency to steal taxpayer-funded resources from vulnerable individuals and small businesses.”

Continue Reading

Fraud, Deception and False Claims, Government Contracts

U.S. Supreme Court Declines to Clarify False Claims Act Falsity Standard

The U.S. Supreme Court recently declined to address a circuit split regarding the standard for establishing that a statement material to a claim for payment is false under the False Claims Act (FCA); specifically, whether the FCA requires pleading and proof of an “objectively false statement,” or whether liability can be based on allegedly false opinions. While the Courts of Appeals have taken conflicting positions on these issues, the circuit split is not as deep as would appear and the variation in standards are likely to have a minimal impact on ultimate outcomes. Nevertheless, with these varying standards for establishing falsity, healthcare providers and government contractors should take proactive steps to ensure signed certifications pertinent to a claim reflect appropriate diligence and decision-making and convey reasonably and honestly held opinions.

Continue Reading

Compliance, Securities and Commodities

SEC 2021 National Exam Program Examination Priorities

On March 3, 2021, the Securities and Exchange Commission’s Division of Examinations (EXAMS) (formerly the Office of Compliance Inspections and Examinations (OCIE) released its 2021 examination priorities.

Notably, while the majority of the examination priorities echo OCIE priorities from prior years, this year’s EXAMS priorities include a greater focus on climate-related risk and environmental, social, and governance (ESG) matters. This is consistent with the Commission’s increased emphasis on ESG matters in other contexts, as well as that of other regulators. This year’s priorities also include examinations relating to Regulation Best Interest (Reg BI) compliance, considerations relating to the impacts of the COVID-19 pandemic and a continued focus on complex products.

EXAMS’s leadership also calls out its newly operational Event and Emerging Risks Examination Team (EERT), which is tasked with enhancing the Division’s ability to identify and tackle emerging and exigent risks as they arise.

The examination priorities are organized around largely perennial themes, and we discuss each such theme below.

Continue Reading

Financial Institution Regulation

Budget Launches Taskforce to Uncover Exploitation of the UK Government’s COVID-19 Financial Rescue Schemes

In today’s budget, UK Chancellor Rishi Sunak announced a £100 million Taskforce to scrutinise claims made under business support schemes designed to help companies and workers navigate their way through the economic impact of the COVID-19 pandemic. The Taxpayer Protection Taskforce will be examining claims made honestly but in error as well as those made fraudulently.

The UK Government’s package of COVID-19 support schemes are credited with saving millions of jobs and keeping many businesses viable. However, auditors and Members of Parliament have been quick to point out that weak safeguards left the schemes vulnerable to exploitation.

Continue Reading

Fraud, Deception and False Claims, Securities and Commodities

Responses Matter: Securities Fraud Sentence Shows the Value of a Sound Response to a Government Investigation

It’s an old lesson in government investigations, but one worth repeating. Conduct during an investigation can matter as much as the conduct under investigation – sometimes even more.

High-profile prosecutions of the past have shown the severe consequences of mistakes in responding to government investigations. Martha Stewart went to prison not for insider trading but for how she responded to an insider trading investigation. Barry Bonds was convicted not for steroid use, but for how he responded to a steroids investigation.

Continue Reading

Government Contracts

Biden Administration Orders Comprehensive Review of U.S. Supply Chain

On Feb. 24, 2021, President Joe Biden signed an executive order (EO) triggering a comprehensive review of U.S. supply chains, ordering agencies to identify ways to secure the American economy against shortages of critical and essential goods.

As noted by the White House, this EO requires federal agencies to conduct a two-phase review of U.S. supply chains. First, the EO directs an immediate, 100-day review of key products in the supply chain, to include semiconductors, critical minerals, active pharmaceutical ingredients and large-capacity batteries. Second, the order calls for a more in-depth, one-year review of the domestic supply chain supporting six key industrial sectors: the defense industrial base, public health and biological preparedness industrial base, information and communications technology industrial base, energy sector industrial base, transportation industrial base, and supply chains for agricultural commodities and food production.

Click here to continue reading.

Compliance, Enforcement and Prosecution Policy and Trends, Securities and Commodities

CFPB’s “Change of Direction” After One Month: New Goals, More Attorneys

In the month since he became Acting Director of the Consumer Financial Protection Bureau, David Uejio has implemented a “change of direction” at the agency, making sweeping announcements on a weekly basis.

Read our complete commentary on McGuireWoods’ Consumer FinSights blog, which assesses where the CFPB stands after the Biden administration’s first month and the likely changes to come.

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

DOJ Indictment Highlights Methods Utilized by State Sponsored Cybercriminal Organization to Attack Major Industry and Government Entities

For the third time in less than a month, the United States Department of Justice (DOJ) announced a major enforcement action against an international cybercriminal organization that infiltrated public and private computer networks, fundamentally compromised these systems, and sought to obtain over a billion dollars from this illicit access. This past week’s indictment, which was obtained by the United States Attorney’s Office for the Central District of California, is particularly notable in that it: (1) shines a spotlight on the operations of a decade-long effort by a North Korean state sponsored cybercriminal organization to inflict monetary and reputational harm on targeted government agencies and contractors, financial institutions, cryptocurrency platforms, online casinos and entertainment industry companies; and (2) and highlights the broad array of methods utilized by this organization to evade network cybersecurity protections, exploit computer networks, and steal intellectual property and corporate secrets, while also conducting cyber-extortions, ransomware attacks, and cyber-enabled heists of bank-held funds, ATMs, and cryptocurrency. The threat posed by this organization is sufficiently acute that the Federal Bureau of Investigation (FBI), the Cybersecurity and Infrastructure Security Agency (CISA), and the Department of Treasury (Treasury) simultaneously released a joint advisory addressing one of the organization’s most invasive tools, the Applejeus malware, that has been used to conduct large-scale cyber-intrusions, including in this case.

Continue Reading

Enforcement and Prosecution Policy and Trends, Financial Institution Regulation

CISA, FBI, and Treasury Issue Guidance on State Sponsored Cryptocurrency Malware Targeting Financial Institutions and Cryptocurrency Exchanges

This past week the Federal Bureau of Investigation (FBI), the Cybersecurity and Infrastructure Security Agency (CISA), and the Department of Treasury (Treasury) released a joint advisory report on HIDDEN COBRA—the cyber threat to cryptocurrency posed by North Korea—and provided mitigation recommendations for addressing this ongoing threat. This report was issued in conjunction with the unsealing of a wide-ranging indictment by the United States Attorney’s Office for the Central District of California that charged three North Korean hackers for their participation in a broad criminal conspiracy to conduct destructive cyberattacks that targeted the financial and entertainment industries, government contractors, and government agencies, including the U.S. Departments of State and Defense.

Continue Reading

We use cookies to enhance your experience of our website. By continuing to use this website, you agree to the use of these cookies. For more information and to learn how you can change your cookie settings, please see our policy.