Insights

Foreign Corrupt Practices Act (“FCPA”) enforcement has been fairly predictable for many years as the Fraud Section of the Department of Justice (“DOJ”) has maintained exclusive authority over investigating claims and bringing enforcement actions in federal courts across the country. President Trump’s recent pause on FCPA enforcement, the first of its kind since the statute was passed in 1977, has created significant uncertainty for individuals and businesses operating internationally regarding the future of FCPA enforcement. While DOJ is in the process of assessing what the future of FCPA enforcement, state attorneys general are stepping in. On April 2, California Attorney General Rob Bonta issued a Legal Advisory (the “Advisory”) to California businesses explaining that violations of the FCPA are actionable under California’s Unfair Competition Law (UCL). The announcement signals a shift in FCPA enforcement where states may take the lead and pursue FCPA enforcement through their state unfair competition laws.

In a recently published Corporate Counsel article, “Conducting Investigations and Discovery in China: What Companies Need to Consider in Preparing for New Policies,” Crowell’s John E. Davis and the Zhong Lun Law Firm’s Gary Gao (Jun Gao) discuss the need for companies with operations and data in China to prepare for increased governmental scrutiny and civil actions, and provide tips for effectively responding to cross-border demands for data in such pressurized circumstances.

On February 20, 2025, the Securities and Exchange Commission (SEC) announced the formation of the Cyber and Emerging Technologies Unit, known as “CETU,” which will replace the Crypto Assets and Cyber Unit (“CACU”).

United States Attorneys’ Offices recently announced a number of False Claims Act (FCA) settlements arising out of the Paycheck Protection Program (PPP). These settlements reveal several trends that PPP loan recipients should be aware of.

FY 2024 saw continued growth in False Claims Act enforcement, with a record year for new qui tam and government-initiated actions, and the highest total recovery in three years. Enforcement of pandemic-related fraud and cybersecurity noncompliance increased, and health care, procurement, and small business fraud violations were again priority areas. A groundbreaking opinion from the District Court for the Middle District of Florida may have teed up a potentially landscape-shifting decision about the viability of the qui tam mechanism in the not too distant future. And a landmark administrative law decision at the U.S. Supreme Court may impact many FCA cases to come. Significant decisions regarding retaliation, excessive fines, the first-to-file rule, and the public disclosure bar were also handed down by courts of appeals. Crowell attorneys discuss these highlights and others in a “Feature Comment” published in The Government Contractor.

The new Trump administration is focusing intensely on “cartels” and other transnational criminal organizations, particularly in the Western Hemisphere. Many of the entities designated as FTOs today are active in Latin America and the United States, and sometimes seek to extort money or have other dealings with legitimate businesses operating in their territories. The State Department’s designation of eight such entities will not only raise the pressure on the entities designated, but also will create new risks and pressures for companies operating in areas where these FTOs are active. Below, we summarize the recent developments and the ramifications of these designations for businesses.

On February 18, President Trump issued an Executive Order titled “Ensuring Accountability for All Agencies” that directs independent agencies (as well as Cabinet Departments and their sub-agencies) to route all “proposed and final significant regulatory” and budgetary actions through the White House and the Office of Management and Budget. If implemented to its full extent, this action will significantly strengthen the authority of the White House by weakening the political autonomy of these independent agencies. As an assertion of the President’s inherent powers under Article II of the U.S. Constitution, it also stands to weaken congressional influence over these independent agencies, both through the appropriations and confirmation processes.

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 January 29, 2025, the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) announced a three-month extension of the compliance date for the new Form PF amendments, moving the deadline from March 12, 2025, to June 12, 2025.[1] This extension provides private fund advisers additional time to implement the operational and technological changes required under the updated Form PF reporting framework adopted on February 8, 2024. The agencies’ decision to extend the deadline to June 12, 2025, helps address the challenges associated with the Form PF filing cycle while ensuring that regulators obtain important data beginning with the second quarter of 2025.

On February 5, 2025, the newly sworn-in Attorney General Pam Bondi issued a memorandum with the subject Total Elimination of Cartels and Transnational Criminal Organizations. Attorney General Bondi’s memorandum lays out four distinct avenues to achieve President Trump’s stated policy of eliminating TCOs and Cartels.[1]  These include changing DOJ charging priorities, “removing bureaucratic impediments to aggressive prosecutions,” expanding certain task forces related to TCOs and Cartels, and advocating for certain legislative changes. 

Senator Joni Ernst (R-IA) has issued a mandate to the Biden Administration: stop the spending spree with the remaining dollars in the CHIPs for America Program.  Senator Ernst’s missive is a direct response to Commerce Secretary Gina Raimondo’s push to have every employee in the Department of Commerce work overtime to spend billions of dollars in CHIPs funding before President Biden leaves office—a push that has already resulted in almost as much spending since the November 5thelection as was spent in the preceding two years since the CHIPs Act was passed.  Senator Ernst warned, the success of the CHIPs initiative “requires thoughtful planning and strategic spending, not binge buying shopping sprees by bureaucrats shoveling billions out the door before” Biden’s term expires. 

As described in our prior client alert, on December 3, 2024, the U.S. District Court for the Eastern District of Texas issued an opinion and order  enjoining the federal government from enforcing the CTA and a rule implementing it.  The rule (BOI Rule) requires certain entities formed or registered to do business in the U.S. (Reporting Companies) to report information about themselves and their natural-person beneficial owners to the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury that administers anti-money laundering laws.  Then, on December 13, 2024, DOJ filed an “Emergency Motion for Stay Pending Appeal” in the Fifth Circuit asking that court to stay the District Court’s injunction pending appeal, or, in the alternative, to narrow the District Court’s injunction to members of the National Federation of Independent Business.

On November 8, 2024 the SEC announced a settled enforcement action against Invesco Advisers, Inc. for making misleading statements about its integration of environmental, social, and governance (ESG) factors into the firm’s investment decisions. Invesco agreed to pay a $17.5 million civil penalty to settle the matter. This enforcement action makes it clear that, even though the SEC dissolved its ESG Task Force, the Commission continues to monitor firms’ statements and representations for misleading statements about ESG.

On September 30, 2024, the SEC announced the settlement of an enforcement action against Marathon Asset Management, L.P. (Marathon) for failing to implement proper policies and procedures to prevent the misuse of material nonpublic information (MNPI).  The issue stemmed from Marathon’s participation in ad hoc creditors’ committees, where the firm inadvertently received MNPI through its consultants and advisers.  This enforcement action highlights the SEC’s intense focus on the participation by investors in ad hoc creditors’ committees and the importance of implementing robust MNPI controls when doing so.

On September 10, 2024, the U.S. Securities and Exchange Commission (the “SEC”) announced a settlement with Keurig Dr Pepper Inc (“Keurig”).  The SEC alleged that Keurig made incomplete and inaccurate statements in the Company’s annual reports for fiscal years 2019 and 2020 touting the recyclability of its K-Cup products. Keurig agreed to pay a $1.5 million civil penalty. 

On Monday, September 23, 2024, the Department of Justice (DOJ), released an update to its Evaluation of Corporate Compliance Programs (ECCP) guidance.  The ECCP guidance was last revised in March 2023, which brought a number of significant changes, including a focus on compensation and incentive structures (e.g., clawbacks), and third party messaging applications.  This 2024 update, while not as significant in scope as its predecessor, nonetheless highlights the DOJ’s focus on new and emerging technologies, such as artificial intelligence (AI), as part of its evolving assessment of what makes a corporate compliance program truly effective, and how prosecutors should evaluate risk assessments and other management tools at the time of a corporate resolution.

The Securities and Exchange Commission (SEC) has reportedly recently dissolved its Climate and ESG Enforcement Task Force (the Task Force). The Task Force was part of SEC Chair Gary Gensler’s broader push to increase investors’ access to environmental, social, and governance (“ESG”) information about public companies and registered investment companies. The dissolution of the Climate and ESG Enforcement Task Force comes after three years marked by industry resistance and a mixed record in the courts. Prior to the Task Force’s dissolution, the agency removed ESG from its annual Examination Priorities Report, which provides areas of particular focus during SEC examinations. While the Task Force has been dissolved, the SEC is still pursuing a number of its proposed ESG and climate-related rules.

On August 26, 2024, the U.S. Securities and Exchange Commission announced that it had settled charges with Sound Point Capital Management, LP, a New York-based registered investment adviser, for inadequate policies and procedures regarding its handling of material nonpublic information (“MNPI”) and related compliance deficiencies in its collateralized loan obligations (“CLOs”) trading activities. Sound Point agreed to pay a $1.8 million civil penalty in addition to other remedial measures. Notably, the SEC did not charge the investment adviser or its employees with violating SEC Rule 10b-5.

As the Department of Energy’s (“DOE”) Loan Programs Office (“LPO”) continues to finance clean energy manufacturing and deployment in the United States, the recent announcement by the DOE’s Office of Inspector General’s (“DOE OIG”) that it intends to scrutinize LPO’s due diligence process increases the risk to program applicants. According to a recent notice issued on SAM.gov, the DOE OIG intends to issue a sole source contract for legal support “assessing the policies and procedures” for the due diligence of loan applications, and evaluate specific LPO loans and guarantees to assess their compliance with, consistency in application of, and the effectiveness of LPO policies and procedures, as well as related Governmentwide regulations, policies, procedures, and directives, to identify specific points of weakness in due diligence practices, and to recommend improvements to mitigate risks.

On August 1, 2024, Deputy Attorney General Lisa Monaco unveiled the Department of Justice’s new Corporate Whistleblower Awards Pilot Program. The announcement marks the conclusion of the Department’s previously announced “sprint” towards a pilot program, as DAG Lisa Monaco first previewed back in March of this year.