Tag:enforcement
U.S. Regulators are Employing New Strategies to Crack Down on Historically Challenging Insider Trading Cases
In the past, insider trading cases have been considered difficult to prove and prosecute. These cases usually require extensive evidence-gathering coupled with a high burden of proof. However, the Securities and Exchange Commission (SEC) and Justice Department are now turning to new developments in technology and regulatory efforts that have led to an increased focus on investigating and prosecuting insider trading cases. Why were these cases hard to prove in the past and what exactly are these new technologies?
Healthcare Bribery Whistleblower Receives the Highest SEC Award in 2022
The United States Securities and Exchange Commission (SEC) has announced that they have awarded upwards of $37 million to one whistleblower in 2022. This individual gave important information to the SEC that led to a successful enforcement action against a large European healthcare company. This award took the cake for being the highest payout to a whistleblower in 2022. What does a whistleblower program look like from the regulator’s point of view and why is it important?
Safeguarding Technologies through the Disruptive Technology Strike Force
On February 16, 2023, the Department of Justice (DoJ) and the Department of Commerce (DoC) announced the launch of the Disruptive Technology Strike Force. Under the leadership of Assistant Attorney General Matthew G. Olsen of the Justice Department’s National Security Division and Matthew Axelrod, the Assistant Secretary for Export Enforcement in the Commerce Department’s Bureau of Industry and Security (BIS), the strike force will bring together various agencies throughout the government, including the FBI, Homeland Security Investigations (HSI) and 14 U.S. Attorneys’ Offices, to “target illicit actors, strengthen supply chains and protect critical technological assets from being acquired or used by nation-state adversaries”.
Regulating the Worst Kind of AI-Generated Content
On September 05, 2023, a bipartisan coalition of all fifty state attorneys general along with four attorneys general from U.S. territories came together to sign a letter to Congress. The letter urged Congress to establish an expert commission to specifically study how artificial intelligence (AI) contributes to the exploitation of children. The attorneys general further stressed the urgency of expanding existing laws on Child Sexual Abuse Material (CSAM) restrictions to include AI-generated content.
Largest Alleged Violation in FEC History – Investigation Blocked, Case Closed
In June, the Federal Elections Commission (FEC) announced that they would not investigate allegations that two of former President Trump’s campaign committees illegally misreported hundreds of millions of dollars in spending. If true, these allegations would constitute the “largest alleged violation in FEC history” according to FEC Commissioner Ellen L. Weintraub. The initial complaint alleged that the committees failed to disclose payments to friends and family members of the former President, such as Lara Trump, who is Trump’s daughter-in-law, and Kimberly Guilfoyle – Donald Trump Jr.’s fiancé. In it’s decision, the FEC’s Republican Commissioners voted not to investigate the matter, which is therefore no longer being pursued. This situation illustrates how the FEC has consistently failed to investigate the Trump reelection campaign for alleged violations of campaign finance law.
DOJ Renews Efforts to Prosecute White-Collar Crime
In October of 2021, the Department of Justice (“DOJ”) announced it would ramp up its enforcement against corporate repeat offenders of white-collar crimes and prioritize action against individual actors to promote accountability. The new measures implemented permit the DOJ to consider all prior wrongdoing by a corporation when deciding how to resolve a new investigation. Leniency programs of the past will not be extended to wrongdoers unless all believed participants, whether employees or executives, are disclosed. There has also been a shift from financial penalties to probationary settlements, which require companies not only to admit fault and pay fines but also to improve their monitoring of employees to deter crime. This may require outside monitoring to verify compliance, which can be burdensome and expensive.
New Incentives from the DOJ to Urge Companies to Self-Report Crimes
In an action meant to incentive companies to self-report their wrongdoings, the Justice Department (DOJ), has announced big changes to its Corporate Enforcement Policy (CEP). The Department of Justice has long been fighting against corporate criminality in its pursuit to maintain the integrity of the financial market. On January 17, Assistant Attorney General Kenneth A. Polite, Jr., announced revisions to the Criminal Division’s Corporate Enforcement Policy. Some of the revisions include up to a 75 percent reduction in fines for companies that voluntarily report their wrongdoings and fully cooperate with investigations and up to a 50 percent reduction for companies that fully cooperate with investigations even if they do not voluntarily disclose the crime. These incentives further soften the aggressive stance that the Biden administration originally took against Corporate America in 2021.
IRS Suspends Automated Substitute for Return (ASFR) Program
The IRS suspended its Automatic Substitute for Return (ASFR) Program for lack of resources, Tax Analysts and others report. The ASFR program has long provided an avenue for the IRS to assess taxes on delinquent filers after requests to file returns were ignored by having its computer system automatically calculate the tax due based on Forms 1099 and other information reports that had been filed with the IRS. The IRS could then assess the taxes and attempt to collect based on these substitute returns. However, since deductions were ignored, the tax amounts tended to be inflated, sometimes incredibly so, and significant IRS time was required to respond to contested assessments and collection efforts that were sometimes highly unrealistic.
As Hollywood is Flooded with Sexual Misconduct Allegations, Special Task Force of Prosecutors Could Save the Day
In the midst of countless sexual misconduct allegations against some of Hollywood’s most powerful people, on November 9, 2017, Los Angeles District Attorney, Jackie Lacey, issued a statement outlining a plan of action. A special task force of veteran sex crimes prosecutors has been assembled to ensure a “uniformed approach to the legal review and possible prosecution of any case that meets both the legal and factual standards for criminal prosecution.” The Beverly Hills and Los Angeles Police Departments are conducting investigations of the accused as a rapidly increasing volume of sexual misconduct allegations are reported. Law enforcement and the special task force prosecutors are faced with legal and factual difficulties before any sexual misconduct allegations are sufficient for criminal prosecution. The legal elements of the alleged crime, the specific facts of each allegation, the existence of physical evidence, and the remedies available to the victims, are among the many convoluted factors that will dictate the ongoing investigations and prosecution of the allegations that are flooding Hollywood.
Popularity Contest: The Importance of Reputation in Modern Compliance
Modern business thinking has come to accept that reputation is as important as financials. As investors look for companies that demonstrate this understanding, compliance professionals are in a unique position to make their companies more appealing.