May 2013
23 posts
4 tags
Is the US Government Trying to Destroy Bitcoin?
Earlier this month, the US government seized the account of Bitcoin exchange Mt. Gox, prompting Kim Dotcom to wonder if the feds were trying to destroy the virtual currency.
That remains to be seen, write attorneys at Fuerst Ittleman. But the government’s actions should be a surprise to no one:
“Let’s start with the regulatory background. Between the time of its birth and this past March,...
4 tags
FINRA Cracks Down on Lax Anti-Money Laundering...
Recent enforcement from the Financial Institution Regulatory Authority sends an important reminder to securities firms – and their employees – of the need to establish and follow anti-money laundering procedures. From attorneys Kiersten Fletcher and Daniel Nathan at Morrison & Foerster:
“Last week, the Financial Industry Regulatory Authority (FINRA) publicized penalties against three...
4 tags
Businesses that Handle Virtual Currencies May Be...
Businesses that deal in virtual currencies take note: The Financial Crimes Enforcement Network (FinCEN) might consider you to be a “money service business” and as such subject to the Bank Secrecy Act. From attorneys at Pillsbury:
“On March 18, 2013, the Financial Crimes Enforcement Network, under its authority to administer the Bank Secrecy Act (‘BSA”), issued interpretive guidance to clarify...
4 tags
Feds Take FCPA Fight to Wall Street
From Corporate Law Report:
U.S. regulators just took the fight against bribery and corruption to a new arena: Wall Street. Attorneys John Goselin and Mauro Wolfe of Duane Morris explain:
“On May 7, 2013, the U.S. Attorney’s Office for the Southern District of New York unsealed extraordinary criminal charges against two registered representatives of a U.S. broker-dealer and a high-level...
5 tags
Ranbaxy to Pay $500 Million for Adulterated Drugs
Generic drug maker Ranbaxy USA will pay $500 million to settle to seven felony charges in the “largest drug safety-related settlement with a generic manufacturer to date,” write attorneys at Skadden Arps:
“… Ranbaxy admitted to manufacturing and distributing adulterated drugs made at two of Ranbaxy’s facilities in Ponta Sahib and Dewas, India, failing to file required reports with the U.S. Food...
3 tags
What Will The Future Bring for SEC Enforcement?
From securities lawyer Jim Meyers (Orrick), a perspective on the future of enforcement actions at the Securities and Exchange Commission:
“Q: Is the Ralph Lauren Non-Prosecution Agreement a one-off or the start of a trend?
Meyers: It is hard to say whether the Ralph Lauren NPA is the beginning of a trend. Perhaps reflecting Rob Khuzami’s background as a prosecutor, NPAs and DPAs were introduced...
4 tags
Hospice Providers Take Note: The Justice...
The federal government recently launched a False Claims Act lawsuit against the largest for-profit hospice chain in the United States. It’s the latest blow in a crack-down on Medicare billing fraud at the nation’s hospice providers, writes attorney Latour Lafferty at Fowler White Boggs:
“The Justice Department announced filing a False Claim Act (FCA) lawsuit against Chemed Corporation, and...
4 tags
Are You Ready for the New Export Control...
Companies subject to US export control rules take note: recent revisions that are likely to prove complicated in their implementation will go into effect soon. From attorney Joseph Gustavus at Miller Canfield:
“The first significant reforms to the U.S. export control regulations in International Traffic in Arms Regulations (ITAR) and U.S. Export Administration Regulations (EAR) are about to take...
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The Long Arm of the IRS Is Getting Longer…
The Internal Revenue Service plans to share tax information with the Australian and UK governments, writes David Gair of law firm Looper Reed:
“The [IRS] says that the target is trusts and companies holding assets on behalf of residents throughout the world…
But there is nothing wrong or illegal about holding assets in offshore entities – as long as it is properly reported. The IRS has a...
4 tags
New Russian Anti-Corruption Law Establishes...
Russia’s recently enacted anti-corruption law sets a new standard for all companies that do business in the country: the obligation to create and maintain an internal compliance program. It’s a big step in the right direction for the country, write attorneys at Dechert:
“Russia’s recent efforts to combat bribery have met with mixed results in recent years, as publicized initiatives have not yet...
4 tags
Is The Board Engaged in Your Compliance Efforts?
From NAVEX Global, a look at the role of corporate boards in developing – and leading – anti-corruption compliance efforts at multinational corporations:
“Now more than ever, there is increased regulatory pressure on organizations – and their Boards of Directors – to create and maintain effective ethics and compliance programs…
[A]ntitrust/competition prosecutions are on the rise, product...
4 tags
Canada to Ratchet Up Cost of Foreign Bribery
Canadian lawmakers are debating revisions to the country’s anti-corruption law that would raise the cost of bribing foreign officials. From attorney Alan Monk at Dentons:
“[A]n amendment to the Corruption of Foreign Public Officials Act (CFPOA) has been approved by the Senate and is currently before the House of Commons. Bill S-14 is intended to address certain criticisms of the existing...
5 tags
NAVEX Benchmark Report: How Does Your Compliance...
Want to know how your company’s internal compliance reporting compares to that of corporations around the globe? Read this 19-page report, from NAVEX Global:
“This data – with identifying characteristics removed – has allowed the creation of a set of benchmarks across a group of metrics which will assist organizations in making informed decisions about program effectiveness, potential problem...
6 tags
Senator Proposes “Watch List” for Cyber Theft of...
The Chairman of the Senate Armed Services Committee wants to step up the fight against cyber theft of trade secrets, writes attorney Robert Isackson at Orrick:
“On May 7, 2013, Senator Carl Levin (D-Michigan) introduced a bill (S. 884) that would establish a ‘watch list’ and a ‘priority watch list’ of countries that facilitate or engage in cyber theft of trade secrets from the United States.
...
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Skilling Convinces Feds to Cut Prison Time
If at first you don’t succeed… Jeffrey Skilling of Enron fame has been trying for years to reduce his conspiracy, fraud, and insider trading sentence. And those efforts appear to have paid off, writes white collar-crime attorney Jeff Ifrah:
“Former Enron executive Jeffrey Skilling reportedly has negotiated a deal with federal prosecutors that is likely to result in a significant reduction of the...
5 tags
A Shift in Tactics in Off-Label Drug Marketing...
Is the Department of Justice adopting a less aggressive stance toward off-label marketing of pharmaceutical products? From attorney Jonathan Sack at Morvillo Abramowitz:
“In recent years, pharmaceutical companies have faced criminal investigations and charges in regard to alleged off-label marketing of prescription drugs and kickbacks to doctors. For this reason, the filing last month of two...
4 tags
Raytheon Could Have Avoided $8 Million Fine for...
Today’s lesson in compliance comes from Raytheon Corporation, which recently agreed to pay the US Department of State $8 million to settle alleged violations of the International Traffic in Arms Regulations. What’s the lesson? Pay now, or pay much more later. From attorney Reid Whitten at Sheppard Mullin:
“The size of the penalty catches the eye, but beyond the whopping number is a sizeable...
4 tags
Myanmar (Burma) Accedes to the New York Convention
Earlier this month, the Republic of the Union of Myanmar acceded to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. It’s an important step in the right direction, writes Robert Pe of law firm Orrick:
“With the suspension of sanctions by the West and the enactment of Myanmar’s new Foreign Investment Law (‘FIL’) on 2 November 2012, Myanmar has become an...
4 tags
How to Meet Global Anti-Corruption Requirements...
Can multinational corporations fight corruption and bribery without violating privacy and data protection laws around the world? It’s challenging, but ultimately can be done. From attorneys at Morrison & Foerster:
“Multinational businesses are subject to a patchwork of laws of the various jurisdictions in which they operate. Complying with the myriad rules and regulations can be challenging....
7 tags
UK To Adopt Deferred Prosecution Agreements Next...
UK regulators will have a new tool for fighting fraud, bribery, and money laundering when the Crimes and Courts Bill goes into effect in early 2014. How will they compare to those being used in the US? From attorneys at Dechert:
“In the US, prosecutors can enter into DPAs with individuals whereas in the UK, only companies, partnerships and unincorporated associations can enter into DPAs.
In...
5 tags
New Anti-Corruption Law Puts All Companies...
From William Semins and Denise Yasinow of law firm K&L Gates, an overview of Russia’s new anti-corruption law and its implications for businesses with operations in the country:
“On January 1, 2013, Russia implemented an amendment to its anti-corruption laws that appears to go beyond the reach of both the U.S. Foreign Corrupt Practices Act (‘FCPA’) and the U.K. Bribery Act (‘UKBA’) to the...
4 tags
Did the IRS Shoot Itself in the Foot with Offshore...
The Internal Revenue Service’s Offshore Voluntary Disclosure Program (OVDP) gives taxpayers with undisclosed offshore accounts a great opportunity to come clean and avoid prosecution. Except when the IRS messes up…
From Jeremy Temkin at law firm Morvillo Abramowitz:
“The program has worked, largely because lawyers and accountants have been able to present the costs and benefits of...
4 tags
Former Siemens Board Member Fined $275K for...
A federal court has imposed a $275,000 fine on Uriel Sharef, former Siemens AG board member, for his role in the company’s bribery of Argentinian government officials. From Emily Stern and Tenley Mochizuki of law firm Katten Muchin Rosenman:
“In December 2011, the SEC sued Sharef and six other Siemens executives for their alleged participation in a complex bribery scheme that spanned from 1996...
April 2013
24 posts
4 tags
SEC Draws Roadmap for Avoiding FCPA Prosecution
The Securities and Exchange Commission recently announced its first non-prosecution agreement with a company accused of violating the Foreign Corrupt Practices Act.
The landmark agreement with Ralph Lauren Corporation, relating to bribes the company allegedly paid government officials in Argentina, establishes a clear roadmap for avoiding significant fines and penalties for companies accused of...
5 tags
FinCEN Issues Warning on Syria to US Financial...
The Department of Treasury’s Financial Crimes Enforcement Network (FinCEN) recently released guidance warning US banks to be on the lookout for Syria-related transactions. From attorneys at BuckleySandler:
“FinCEN issued Advisory FIN-2013-A002, which advises financial institutions to review regulations that require U.S. financial institutions to perform money laundering or other suspicious...
4 tags
“Neither Admit Nor Deny” SEC Settlement Called...
A federal judge recently questioned the appropriateness of a recent Securities and Exchange Commission settlement in which the insider-trading defendant was allowed to “neither admit nor deny” the charges.
It’s the second time this type of agreement has been called out, write Anushila Shaw, James Thompson, and Penelope Graboys Blair of law firm Orrick, but requiring the SEC to extract an...
3 tags
Setbacks in US Efforts to Prosecute Foreign Theft...
Stopping US trade secret theft is a top priority for the Department of Justice, but there are bound to be snags along the way. And that means companies need to do more to stop theft in the first place. From attorney Jeff Ifrah:
“… a federal judge in the Eastern District of Virginia determined that, despite eight attempts, the DOJ had not properly served Kolon Industries Inc, a South Korean...
7 tags
EU Sanctions Update: Burma, Syria, Libya, North...
Earlier this week, European regulators implemented a number of changes to economic sanctions. From attorneys at White & Case:
“For Burma/Myanmar, the Council has decided to lift all economic sanctions, while keeping the existing arms embargo in place for one more year. For Syria, the Council has eased certain EU sanctions measures, including the oil embargo, by allowing Member State...
3 tags
Jail Time Needed to Deter White Collar Crime, Says...
Will doing time become a requirement for those convicted of white collar crimes? One court thinks it should, write Christopher Hall and Courtney Schultz of law firm Saul Ewing:
“In Kuhlman, the defendant pled guilty to a 5-year, $3 million health care fraud scheme. The Guidelines recommended a sentencing range of 57 to 71 months imprisonment. The District Court, however, continued the sentencing...
3 tags
“The Government Made Us Do It”?
[Link: China’s Export Policy Changes After U.S. Antitrust Case - Bloomberg Law]
As it turns out, “the government made us do it” is in fact an acceptable defense for foreign companies facing charges of price-fixing in the United States (See ~1:30). But as the above video explains, that excuse didn’t work for a group of Chinese Vitamin C makers accused of collusion to increase prices.
5 tags
Self-Reporting FCPA Violations Pays Off: Just Ask...
Clothing retailer Ralph Lauren will pay $1.6 million for paying approximately $600,000 in bribes to government officials in Argentina. But it could have been a lot worse, writes David Smyth of law firm Brooks Pierce:
“From the government’s perspective, the important part of all of this was how the payments were discovered and what Ralph Lauren did in reaction to them… Within two weeks of...
4 tags
South Korea Regulators Raid Steelmaker in...
Late last month, South Korean antitrust regulators raided a subsidiary of POSCO, one of the country’s biggest steelmakers. The search and seizure was part of a global effort – led by the US – to crack down on price fixing across the industry, writes Brandi Walkowiak of law firm Foley & Lardner:
“… this raid follows a probe initiated by the Federal Trade Commission (FTC) of several steel...
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Oil & Gas Industry Cannot Ignore International...
The global anti-corruption landscape is constantly changing, and oil and gas companies that don’t keep up face significant risk. From attorneys at Pepper Hamilton:
“Oil and gas businesses operate in a dynamic realm of increasing anti-corruption enforcement risk. The industry is perceived to be among the most corrupt, with a high incidence of bribery of foreign officials in resource-rich...
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EU and Canada Consider “Conflict Minerals” Rules
From law firm King & Spalding, a look at efforts in Canada and Europe to implement disclosure requirements for companies that manufacturing products containing tin, tantalum, tungsten, gold, and other so-called “conflict minerals:”
“The European Commission (EC) Directorate-General for Trade has issued a consultation to solicit interested parties’ views on a potential EU initiative for...
6 tags
Europe Proposes Anti-Corruption Reporting for O&G,...
The European Commission has proposed amendments to its Transparency Directive that would bring anti-corruption reporting requirements for oil, gas, and mining companies in line with those of the United States. From attorneys at Dechert:
“Large non-listed companies incorporated in the European Economic Area which operate in the oil, gas and mining sectors will need to annually disclose any...
4 tags
Don’t Shortchange the Key Element of Your...
In their rush to development anti-corruption compliance programs, many companies gloss over the most important step: conducting a company-wide risk assessment, write attorneys at K&L Gates. And that’s a big mistake:
“Although a risk assessment can provide key information to those responsible for anti-corruption compliance, such an exercise is unlikely to have much visibility outside the...
6 tags
FCPA Watchdogs Target Health Care Industry
Health care firms take note: the feds are cracking down on corruption in the industry. From Doreen Edelman at law firm Baker Donelson:
“… in 2012, the SEC brought five enforcement actions and the DOJ initiated four prosecutions against pharmaceutical and medical device companies. What can you learn from these cases? The cases reveal preventable compliance failures in an industry that knows its...
6 tags
Long Term Care Providers: 7 Tips for Avoiding...
Whistleblower suits against long term care facilities alleging overbilling of the US government or other False Claims Act violations are on the rise. But providers can minimize the risk of lawsuits, writes Amy McCraken at law firm Duane Morris:
“The best way to avoid a False Claims Act case is to provide quality care to all residents. Federal and state regulations define the care that must be...
5 tags
Feds Express Concern over Fraud & Abuse at...
The US Department of Health and Human Services Office of Inspector General (OIG) recently issued a Special Fraud Alert warning that physician-owned entities that make money off the medical devices used by their doctors raise significant fraud and abuse and patient safety concerns, write Darby Allen and Donna Clark of law firm BakerHostetler:
“The Special Fraud Alert builds on OIG’s...
4 tags
Feds Use Broad Definition of “Virtual Currency” in...
A lot of companies do business in what might be called “virtual currency,” writes David Beam of law firm K&L Gates. But they might not know that they are subject to anti-money laundering laws. And that could spell trouble:
“Most of these companies probably do not consider themselves financial institutions. Many have never considered the possibility that they need to register with the...
5 tags
Fewer Sanctions Means New Opportunities – and...
The landscape of U.S. economic sanctions is undergoing significant change, write Christopher Swift and Gregory Husisian at law firm Foley & Lardner, bringing both opportunities and challenges to multinationals:
“The past two years have witnessed substantial changes in the scope and effect of U.S. economic sanctions. In most instances, such as Iran and Syria, the result has been more...
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FCPA Enforcements Are Down, but Pressure Is Still...
Foreign Corrupt Practices Act enforcements were down significantly in 2012, but that doesn’t mean the Department of Justice and the Securities and Exchange Commission have given up the fight. From attorneys at Venable:
“In 2012, DOJ and the SEC brought 25 new Foreign Corrupt Practices Act (‘FCPA’) enforcement actions, a significant decrease from the number of FCPA enforcement actions brought in...
5 tags
Who Is Funding European Football?
From Martina Maier and Robert Bäuerle at law firm McDermott Will & Emery, a look at the European Commission’s recently launched investigation into allegations of state funding of professional football clubs:
“On 6 March 2013, the Commission opened an in-depth investigation, the first of its kind, into the public funding of five professional football clubs in the Netherlands. It has doubts...
Compliance Officer: JD Supra's New Flipboard Mag...
Calling all mobile news junkies:
Download the terrific Flipboard app and search “JD Supra Law News” - you’ll be able to subscribe to Compliance Officer, our new iPad magazine covering all aspects of corporate compliance, corruption, and related issues.
If you’re a regular reader of this stream, you know that we publish advisories in this realm from some of the best...
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Don’t Throw a $12,000 Birthday Party for a Foreign...
From Yonaton Aronoff at law firm Foley & Lardner, a reminder that the Resource Guide to the US Foreign Corrupt Practices Act, published by the Department of Justice and the Securities and Exchange Commission, provides concrete examples of what not to do:
“The comprehensive guidance consists of cases, hypotheticals, interpretations, and explanations, and is designed to guide employers in...
4 tags
Complying with Conflict Mineral Rules: Three Steps
From attorneys at Foley & Lardner, practical advice for complying with the SEC’s conflict minerals reporting rules:
“Step One: Adopt a ‘responsible sourcing’ policy for conflict minerals and communicate this policy to your suppliers. Make clear your expectation that your suppliers will obtain materials only from ‘conflict-free’ sources, and that you will not tolerate the sourcing of...
5 tags
What if the Whistleblower is the Company Lawyer?
From attorneys at law firm Littler, an in-depth look at legal and regulatory considerations for companies facing whistleblower complaints from their own in-house legal staff:
“With recent legislative efforts to expand whistleblower rights and protections, many employers have found themselves confronting an increase in the number of whistleblower reports, complaints, and lawsuits. As part of this...
March 2013
26 posts
4 tags
Remember the “Good Old Days” Filled with...
Are we heading toward a new wave of accounting and financial statement fraud and misconduct? From Stephen Juris of law firm Morvillo Abramowitz:
“Several months ago, I raised the question of why the large-scale accounting fraud cases of the type that had been so prevalent in the early 2000s were no longer a staple for either federal prosecutors or the SEC…
As luck would have it, shortly...
7 tags
Bank Officers and Directors: Your “Stay out of...
When it comes to fighting money laundering, the Bank Secrecy Act (BSA) is an important arrow in the government’s quiver. And it is being increasingly aimed at directors and officers who fail to establish and maintain anti-money laundering compliance programs, write Harold Reichwald and John Libby of law firm Manatt, Phelps & Phillips:
“[W]ith the easing of the financial crisis, there is an...
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Lobbyists Take Note: Your Gifts to Politicians &...
A recent appeals court ruling sends an urgent warning to lobbyists and former government employees, write Brett Covington and Christopher Hall of law firm Saul Ewing:
“The U.S. Court of Appeals for the D.C. Circuit in United States v. Ring recently upheld a conviction under the public sector ‘honest-services’ fraud statute and the ‘illegal-gratuities’ statute. Notably, the court: (1) expanded...
