Insights

On February 10, 2025, President Trump issued an Executive Order, Pausing Foreign Corrupt Practices Act Enforcement to Further American Economic and National Security (“Trump’s FCPA Order” or the “Order”), whose stated goal is “to restore American competitiveness and security by ordering revised, reasonable enforcement guidelines” for the FCPA. Fact Sheet: President Donald J. Trump Restores American Competitiveness and Security in FCPA Enforcement (“Fact Sheet”). Trump’s FCPA Order is part of his administration’s policy of “eliminating excessive barriers to American commerce abroad.”

On May 11, 2023, the Supreme Court issued two opinions limiting the reach of the federal fraud statutes and eliminating often-used theories from the government’s arsenal.

On May 5, 2023, the Securities and Exchange Commission (“SEC” or “Commission”) announced a record-setting whistleblower award of nearly $279 million.  This award more than doubles the SEC’s previous $114 million record-setter, issued in October 2020.

On June 22, 2022, Lauren Kootman, Assistant Chief in the Corporate Enforcement, Compliance and Policy Unit (the “Unit”) of the Justice Department’s (“DOJ”) Fraud Section confirmed that a forthcoming DOJ policy will require Chief Compliance Officers (“CCOs”) to certify representations about their companies’ compliance programs in settlement agreements with the DOJ.  Similar to the requirement set forth in the Sarbanes-Oxley Act that CEOs and CFOs must certify their companies’ SEC disclosures, and much like current end-of-monitorship certifications, the policy will require CCOs and CEOs to certify that their companies’ compliance programs have been “reasonably designed” to prevent future violations.  The policy was first proposed by Assistant Attorney General Kenneth A. Polite Jr. in March.  Responding to criticism (and echoing prior DOJ statements), Kootman explained that the policy is meant to ensure CCOs have “adequate visibility and access to information” about their companies’ business activities and compliance programs.  In that sense, she said it is DOJ’s goal that the new policy will “empower” CCOs, rather than target or punish them.   

For the first time in nearly a decade, the U.S. Department of Justice (DOJ) has revised its prosecutorial guidelines for bringing criminal charges under the Computer Fraud and Abuse Act (CFAA), 18 U.S.C. § 1030. Under the revised guidelines, federal prosecutors should not pursue CFAA violations if available evidence shows an individual’s conduct consisted of, and the defendant intended, “good faith security research.” See Justice Manual (J.M.) § 9-48.000 (Revised CFAA Guidelines). These policy changes, effective immediately, provide some welcome clarity for so-called “white-hat” or “ethical” hackers, such as cyber researchers and penetration testers.

On March 30, 2022, the Securities and Exchange Commission’s Division of Examinations (the “Division”) announced its 2022 Examination Priorities (the “Priorities”), including several significant areas of focus and many perennial risk areas. Under the Priorities, the Division will focus on the following topics and issues: private funds, environmental, social and governance (ESG) investing, retail investor protections, information security and operational resiliency, emerging technologies, and crypto-assets. 

In an order filed on November 10, 2021, the District Court for the Southern District of Texas granted a motion to dismiss an indictment finding that it lacked jurisdiction over Foreign Corrupt Practices Act (“FCPA”) and money laundering claims brought against Swiss resident and citizen Daisy T. Rafoi-Bleuler. Moreover, the court concluded that the FCPA and money laundering claims were unconstitutionally vague as applied. See United States v. Rafoi-Bleuler, Case No. 4:17-CR-0514-7, Dkt. No. 255 (Nov. 10, 2021).

After months of anticipation, the Supreme Court issued its opinion in Van Buren v. United States narrowing the scope of what constitutes “exceeds authorized access” under Section 1030(a)(2) of the Computer Fraud and Abuse Act (“CFAA”). No. 19-783, --- S.Ct. --- (June 3, 2021). The Supreme Court ruled that to be liable under the “exceeds authorized access” prong of the CFAA, a defendant must have accessed information within a computer system they were not permitted to access. It is no longer sufficient under the CFAA to show a defendant had an improper motive to obtain and use information on a computer system which they were permitted to access. 

On March 29, 2021, the U.S. Securities and Exchange Commission filed a complaint against LBRY, Inc., a decentralized blockchain company that operates a content sharing application. The SEC alleges that starting in 2016 and continuing through the present, LBRY sold more than 13 million digital asset securities called LBRY Credits to investors (some in the U.S.) in exchange for U.S. dollars, bitcoins, and other consideration. The SEC claims that LBRY Credits constitute investment contracts under the Howey Test, which LBRY failed to register as securities in violation of Sections 5(a) and 5(c) of the Securities Act of 1933. This appears to be the first Section 5 case against an issuer of a token on a decentralized platform, signaling the SEC’s focus on decentralized finance, or DeFi. 

On 5 February 2021, the U.K. Supreme Court unanimously ruled that the Serious Fraud Office (SFO) does not have the power to compel a foreign company that has no registered office or fixed place of business in the U.K. to produce documents held outside the U.K. under section 2(3) Criminal Justice Act 1987 (CJA). This means that where the parent of a U.K. company is a foreign company which has no presence in the U.K., the SFO will not be able to require it to produce documents held outside the U.K. even if those documents are sought in connection with an investigation relating to its U.K. subsidiary. The decision may act as a brake on the SFO’s powers of investigation at a time when fraud is increasingly cross-border and the alternative routes for gathering evidence are slower and more cumbersome.

On January 1, 2021, the Senate followed the House and voted to override President Trump’s veto of the National Defense Authorization Act for Fiscal Year 2021 (NDAA). As is typical, the NDAA touched on a wide range of legal areas, including numerous new government contracts requirements, as well as a number of sanctions and export control related features, which will be summarized separately. One of the core features of the NDAA, however, is Division F, The Anti-Money Laundering Act of 2020 (AMLA or the Act), which makes sweeping reforms to the Bank Secrecy Act (BSA) and other anti-money laundering rules. The following is a summary of the most significant changes to the AML legal landscape, including:

On July 3, 2020, the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) released the second edition of their Resource Guide to the U.S. Foreign Corrupt Practices Act (the “Guide”). This new edition provides several clarifications on the enforcement agencies’ view of the FCPA, adds summaries of recent cases and declinations, incorporates DOJ's recently updated guidance on the Evaluation of Corporate Compliance Programs, and addresses other agency policies issued since the first edition including the FCPA Corporate Enforcement Policy and policies on the selection of monitors and the coordination of corporate resolutions. Although the substance of the Guide remains largely unchanged, it does contain several notable edits that give some further insight into DOJ and SEC’s perspective on key developments in the law and enforcement issues under the FCPA since the first edition was published in 2012. While companies’ attention may be elsewhere during the COVID-19 pandemic, they should nevertheless remain vigilant in maintaining and enforcing their anti-bribery and anti-corruption programs. This updated Guide provides additional insights for doing so.

On Monday, in an 8-1 decision, the U.S. Supreme Court upheld—with some limits—the SEC’s ability to seek disgorgement of ill-gotten profits as an “equitable remedy” for securities law violations. Writing for the Court, Justice Sotomayor said that a disgorgement award is permissible under federal law if it is truly equitable. Disgorgement must therefore be limited to “net profits from wrongdoing after deducting legitimate expenses,” and should be returned to investors. These constraints depend on a fact-intensive and complex analysis, and ultimately will determine how disgorgement is used by the SEC going forward. 

On December 30, 2019, the United States Court of Appeals for the Second Circuit affirmed four insider trading guilty verdicts and, in doing so, forged an easier path to securing insider trading convictions—particularly those against downstream tippees who may not personally know the source of the inside information.

On November 20, 2019, the U.S. Department of Justice (DOJ) revised its Foreign Corrupt Practices Act Corporate Enforcement Policy (“FCPA Policy”) in a further move to encourage early self-disclosures. The changes make clear that DOJ does not expect a company to hold off on self-disclosure until it conducts a complete investigation that identifies all relevant facts, or until it determines that a violation of law occurred. Instead, DOJ expects companies that self-disclose to report on the relevant facts known at the time of disclosure, and to specify when those disclosures are based only on preliminary investigative efforts. 

On October 9, 2019, President Trump signed two executive orders relating to agency guidance documents: Promoting the Rule of Law Through Improved Agency Guidance Documents (“The Guidance EO”) and Promoting the Rule of Law Through Transparency and Fairness in Civil Administrative Enforcement and Adjudication (the “Transparency EO”). Both Orders aim to limit the use, and impact, of agency guidance documents.

In this issue:

On September 7, 2018, the Financial Crimes Enforcement Network (FinCEN) granted exceptive relief to “covered financial institutions”—banks, broker-dealers, mutual funds, and introducing brokers in commodities—from the requirement to identify and verify the identity of the beneficial owner(s) of their legal entity customers when those customers open a new account as a result of the following:

On July 12, 2018, the U.S. District Court for the Eastern District of New York dismissed, as time barred, a civil complaint filed by the Securities and Exchange Commission against two hedge fund managers accused of a "sprawling scheme" to bribe various public officials in Africa. SEC v. Cohen, Civil Action No. 17-cv-430 (E.D.N.Y. Order entered July 12, 2018). While the allegations focused on activity that took place between 2007 and 2011, the SEC failed to file a complaint until January 26, 2017. The oldest transaction identified in the complaint allegedly took place in Libya when it was under the rule of Colonel Muammar Gaddafi. One of the defendants was alleged to have met with a son of Colonel Gaddafi who had influence into the Libyan Investment Authority. The complaint stated that a $3.75 million "deal fee" was charged in connection with the decision by the Libyan Investment Authority to invest $300 million in the defendants’ fund. That arrangement netted the fund a reported $100 million in management fees. The complaint also alleged similar transactions in countries including the Democratic Republic of the Congo; Chad; Niger; and Turks and Caicos.

On June 21, 2018, in Lucia v. Securities and Exchange Commission, the Supreme Court held that SEC Administrative Law Judges are “Officers of the United States” and not mere employees.  Their appointment must therefore follow the Constitution’s Appointments Clause; and past appointments by SEC staff are unconstitutional.