How long until Snapchat becomes the tool of insider traders?
As of October 2013, Snapchat has asserted that, while unopened pictures are retained on the servers (and therefore available for subpoena), once a picture is opened, it disappears not only from the phone, but also from Snapchat’s servers. One can easily imagine a host of potential risks: sharing of material nonpublic information; dissemination of trade secrets; employee sexual harassment—all with virtually no evidence remaining.
Read: Texas Gulf Selfie? The Changing (and Disappearing) Face of Insider Trading»
[T]he cost to the organization to defend an FCA investigation or enforcement proceeding can cause the organization substantial revenue loss, reputational harm, loss of morale and productivity in addition to substantial attorney’s fees even if the government ultimately finds no basis to support the fraud. — Attorney Latour Lafferty of Fowler White Boggs on why, if you do business with the government, you must understand the breadth and scope of the False Claims Act.
From attorneys at Akin Gump, a 22-page guide to responding to the top 10 challenges facing corporate directors in 2014. Of particular note:
“[The] dramatic rise in cyber attacks and data breaches has placed cybersecurity on the radar screen of virtually all companies. In addition to potential lawsuits, damage to reputation and loss of customers, companies are facing increasing regulatory scrutiny about the adequacy of their data security measures. The FTC has brought more than 40 actions against companies for data breach, claiming that failures to prevent unauthorized access to consumers’ personal information constitute unfair or deceptive acts. In almost all instances, companies have settled by entering into consent decrees requiring them to implement better information security programs and obtain annual independent audits for 20 years.”
“Having a strong and effective compliance program in place is even more important with the increasingly vigorous enforcement of regulations. The SEC and the Department of Justice have been ramping up their enforcement efforts under the FCPA over the past several years. Two-thirds of the top 20 largest criminal FCPA case resolutions have occurred in the last three and one-half years, and three of the top five largest penalties ever issued have been in the last year.38 The price for violating the FCPA can be very high, involving not only significant fines and penalties, but also reputational damage, criminal prosecution and investor lawsuits.
Read the full update below:
[Link: Top 10 Topics for Directors in 2014]
Front pay for SOX whistleblowers? Not now, but maybe later... -
In a SOX whistleblower case of first impression, the U.S. District Court for the Eastern District of Virginia ruled that front pay may be ordered in lieu of reinstatement. However, the court ultimately determined that front pay was not warranted under the facts of this case…
Read: Virginia District Court Opens Door To Front Pay For SOX Whistleblowers (Harris Mufson and Steven Pearlman at Proskauer)
The SEC is watching the EB-5 visa program... -
According to [Associate Director Stephen Cohen of the SEC’s Division of Enforcement,] the SEC and the USCIS have been closely coordinating on EB-5 program issues and specific investigations for at least two years. They share a particular interest in making sure that the EB-5 program is free from fraud.
Attorneys Lawrence Bard and Daniel Nathan of Morrison & Foerster on why participants in the EB-5 visa program need to know US securities laws.
Hypothetically, imagine a scheme in which a company is falsely advertising its consumer products—say, a ballpoint pen—and the government happens to purchase that product. Is the mere fact that a transaction was consummated by the government sufficient to infer that a false claim for payment was made on the government at some point between the advertising statements and the government’s purchase? — Attorney Ryan Hassanein of Morrison & Foerster in California Lawyer 2013 Roundtable Series: False Claims
Under the new bill, a company’s actions, through its employees or agents, might increase the company’s legal risk exposure if a whistleblower believes that he or she has been discriminated against in connection with providing information about, or assisting the government in pursuing, potential antitrust misconduct. — Attorney Christine Pickel of Saul Ewing on the Criminal Antitrust Anti-Retaliation Act of 2013, recently approved by the Senate.
US Joins International Community in Easing Iran Sanctions, But It's Probably Too Early to Celebrate -
From Corporate Law Report:
Late last month, the US, along with the four other US Security Council members – China, France, Russia, and the United Kingdom – and Germany, entered into an agreement with Iran that would suspend some of the international sanctions currently in place against the country.
But it may be too early for US companies to celebrate…
[C]ompanies must review which countries [they are] doing business with and ensure that the “umbrella” policy covers all those countries’ anti-corruption laws. — Attorney Brett Johnson of Snell & Wilmer on what the proliferation of anti-corruption laws around the world means to multinational companies.
[T]he agreement will not loosen the financial restrictions affecting most Iranian banks, or the restrictions on transfers of funds to and from Iran, and restrictions on Iran’s access to the insurance and bond market. The sanctions relating the export of dual-use technology (including software and telecommunications equipment) are also likely to remain in force… — Attorneys from DLA Piper on the recently signed deal that provides Iran with approximately $7 billion in relief from international sanctions in exchange for curbs on uranium enrichment and other nuclear activity.
The ensuing risk is that government IT, which is not the subject of proper supply chain integrity, may undermine federal and DOD security. — Attorneys Peter McLaughlin, Rick Vacura, and Bradley Wine of Morrison & Foerster on a new Department of Defense rule on supply chain security at DOD contractors.
What do American companies need to know - and do - about changes to US sanctions on Iran?
A number of factors will prevent the Iran sanctions relief from significantly changing the legal obligations of U.S. companies. First, the Obama administration has stressed that the sanctions relief is only temporary and could be reversed during the next six months based on Iran’s actions in implementing its obligations under the deal. If Iran does not meet its obligations in that period, the sanctions will be reinstated. An additional complication is that Congress could resist these changes.
Read: How Should U.S. Companies React To The Iran Nuclear Deal And Which Sanctions Are Suspended?»
Recap: What Anti-Corruption Authorities Want In-House Lawyers and Compliance Officers to Know About Enforcement -
From Corporate Law Report:
Did you miss the 30th International Conference on the Foreign Corrupt Practices Act earlier this month? Not to worry: attorneys at Akin Gump have distilled some of the key discussions into a series of helpful updates on anti-corruption and bribery compliance.
Read the highlights»
According to Andrew Ceresney, co-director of the SEC’s enforcement division, the SEC also expects that FCPA violations will be “increasingly fertile ground” for the Dodd-Frank whistle-blower program. — Pack Your Bags: SEC And DOJ To Intensify The Spotlight On The Foreign Corrupt Practices Act»