DOJ Promises Whistleblower Rewards Pilot Program and Adds AI Risk to Its Evaluation of Corporation Compliance Programs

On March 7, 2024, US Deputy Attorney General, Lisa O. Monaco announced the development of a new “DOJ-run whistleblower rewards program” during her speech at the American Bar Association’s 39th National Institute on White Collar Crime.[1] The announcement signals “a 90-day sprint to develop and implement a pilot program, with a formal start date later this year.” And Acting Assistant Attorney General Nicole Argentieri provided further clarification on March 8 at the same conference, noting that “[w]e believe that we can make the greatest impact by offering financial incentives to disclose misconduct in areas where no such incentives currently exist.”

DAG Monaco explained that since the creation of Dodd-Frank, other whistleblower programs at the SEC and the CFTC, and similar ones at IRS and FinCEN, have “proven indispensable.” However, these programs were limited in scope and did not address “the full range of corporate and financial misconduct that the Department prosecutes.”

The UAE Exits FATF’s Grey List

By Richard Gibbon, Nima Fath, Malak Abbas and Molly McKenna on February 27, 2024 Posted in Anti-corruption, Anti-money laundering, Compliance Program, Corporate compliance, Corruption, FATF, Financial Action Task Force, Middle East, Sanctions, Sanctions, United Arab Emirates

On February 23, 2024, the Financial Action Task Force (“FATF”) removed the United Arab Emirates (“UAE”) from its list of jurisdictions under increased monitoring (the “Grey List”). As noted in our previous article (see here), FATF had intimated at its October 2023 Plenary that the UAE may be next off the Grey List as it had undertaken multiple key reforms to improve its overall anti-money laundering and combating the financing of terrorism (“AML/CFT”) compliance framework.

The SDNY Whistleblower Pilot Program Within the Framework of Corporate Criminal Enforcement

By Benjamin Glassman and Cheryl Risell on February 26, 2024 Posted in Anti-corruption, Anti-money laundering, Bribery, Compliance Program, Corporate compliance, Corruption, Courts, Department of Justice, Industry Investigations, United States, US Department of Justice, Whistleblowing

The United States Attorney’s Office for the Southern District of New York recently announced a policy—called the “SDNY Whistleblower Pilot Program”—that seeks to encourage individuals to voluntarily disclose financial crimes in which they themselves participated. First unveiled in January 2024 and then revised this month, the policy sets forth the circumstances under which SDNY says that it will grant a non-prosecution agreement to an individual in exchange for the individual’s cooperation. As we explain, while it remains uncertain whether and when it might make sense for any individual to come forward under the policy, the existence of the program has implications for corporate internal investigations.

Navigating Shifting Legal Landscapes: Implications of Deputy Attorney General Lisa Monaco’s Address to Oxford University on Artificial Intelligence

By Colin Jennings and Jay Thomas on February 21, 2024 Posted in Corporate compliance, Courts, Cybersecurity, Department of Justice, Intellectual Property, Technology, United States, US Department of Justice

Deputy Attorney General Lisa Monaco’s (“Monaco”) recent remarks at Oxford University shed light on the evolving intersection of artificial intelligence (“AI”) and the criminal enforcement landscape and its profound implications for the United States Department of Justice and beyond. As the Chief Operating Officer of the Department of Justice, Monaco’s insights underscore the critical importance of understanding and navigating the complex relationship between AI and criminal defense, particularly in the realm of white collar crime.

Managing and Reporting Third-Party Cybersecurity Incidents Under the New SEC Cyber Risk Regulations

By Colin Jennings, Benjamin Glassman, Luke Burton and Elizabeth Safier on February 15, 2024 Posted in Compliance Program, Corporate compliance, Cyberattack, Cybersecurity, Data Protection & Privacy, Government Investigation, Securities Litigation and Enforcement, U.S. Securities and Exchange Commission, U.S. Securities and Exchange Commission, United States

The rules on reporting cybersecurity risks and incidents pose many challenges for companies. Those challenges can be even more difficult when the cybersecurity incident affects third-party systems. With no exceptions for third-party cybersecurity incidents under the new cybersecurity reporting regulations, companies should take proactive steps to assess and respond appropriately to third-party cybersecurity incidents.

The SEC’s New Cyber Risk Regulations

In July 2023, the U.S. Securities and Exchange Commission (“SEC”) promulgated new regulations (“Cyber Risk Regulations”) that, among other things, require public companies to report cybersecurity incidents within four business days of a materiality determination via Item 1.05(a) on Form 8-K. See SEC Adopts Final Cybersecurity Risk Management and Incident Disclosure Regulations, from our colleagues at Privacy World.

Webinar: The New Foreign Extortion Prevention Act – What It Means for US Companies

By Squire Patton Boggs on January 22, 2024 Posted in Anti-corruption, Bribery, Commercial Bribery, Compliance Program, Corporate compliance, Corruption, Foreign Corrupt Practices Act, Foreign Corrupt Practices Act (FCPA), Government Investigation, Industry Investigations, United States, US Department of Justice

Please join us on Tuesday, January 30 for a discussion about “the most consequential anti-foreign-bribery law passed in almost 50 years”: the Foreign Extortion Prevention Act (FEPA).

FEPA allows the DOJ to prosecute foreign officials who demand or accept a bribe from a U.S. citizen or company. Our seasoned team of three former Department of Justice (DOJ) prosecutors – including Tom Firestone, a key player in drafting the legislation, Kathleen McGovern, former senior deputy chief of the Fraud Section supervising FCPA Unit and former FCPA prosecutor, and Jerrob Duffy, former chief of the DOJ Fraud Section’s Litigation Unit and senior FCPA prosecutor – will discuss the Act and its implications for US companies.

Tuesday January 30, 2024

Noon – 1 p.m. ET

Details and registration information

Additional insights (subscription may be required):

Wall Street Journal: U.S. Prosecutors Can Charge Foreign Officials With Bribery Under New Provision
Bloomberg Law: Foreign Bribe Taking Targeted in US Defense Authorization Bill (Correct) (bloomberglaw.com)
Law360: How US Companies Can Wield The New Foreign Bribery Law – Law360

Recent Changes to FATF’s “Grey List”; Could the UAE be Next Off the List?

Between October 25 and October 27, 2023, the Financial Action Task Force (“FATF”), an international policy-making and standard-setting body dedicated to combating money laundering and terrorist financing, held its third plenary meeting of the year (the “October Plenary”), at which it made important updates to its list of jurisdictions under increased monitoring, often externally referred to as the “Grey List,” adding Bulgaria and removing Albania, the Cayman Islands, Jordan, and Panama. These developments are testament to the significant progress the four delisted countries have made in enhancing their anti-money laundering (“AML”), combating the financing of terrorism (“CFT”), and counter proliferation financing frameworks, but point to strategic deficiencies in the current Bulgarian regime. FATF also determined in the October Plenary that no changes to its list of high-risk jurisdictions subject to a call for action, often externally referred to as FATF’s “Black List,” were warranted.[1]

FEPA: the New Tool in the DOJ’s Fight Against Corruption

By Tom Firestone, Richard Gibbon and Sassi Riar on January 16, 2024 Posted in Anti-corruption, Bribery, Commercial Bribery, Compliance Program, Corporate compliance, Corruption, Department of Justice, Extradition, FCPA Jurisdiction, Foreign Corrupt Practices Act, Foreign Corrupt Practices Act (FCPA), Government Investigation, United States, US Department of Justice

On December 22, 2023, President Biden signed into law the Foreign Extortion Prevention Act (hereinafter “FEPA” or the “Act”) which was passed by the US Congress as part of the Fiscal Year 2024 National Defense Authorization Act. The Act aligns with the current administration’s national security agenda in that it broadens the scope and reach of US anti-bribery and corruption laws.

U.S. Sanctions Review: A Recap of OFAC’s Recent Enforcement Actions (Second Half 2023)

The second half of 2023 saw eight enforcement actions from the Department of the Treasury’s Office of Foreign Assets Control (“OFAC”). These actions reflect a range of penalties, industries, sanctions programs, conduct, and lessons learned. Below are some highlights from OFAC’s enforcement releases and settlement agreements.

Penalties

OFAC imposed a total of $984,851,289.90 in penalties during the second half of the year, ranging from $31,867.90 against New York-based Emigrant Bank (“Emigrant”) to $968,618,825 against Binance Holdings, Ltd. (“Binance”), a Cayman Islands virtual currency exchange with affiliates around the world. In one settlement, for $1,207,830 with CoinList Markets LLC (“CLM”), a California-based virtual currency exchange, OFAC suspended $300,000 of the settlement amount considering “the individual facts of this case, including CLM’s financial circumstances.” This amount is suspended pending satisfactory completion of CLM’s compliance commitments as agreed to in the settlement. Additionally, as partial satisfaction of the settlement amount, CLM agreed to invest $300,000 in additional sanctions compliance controls.

Noteworthy Trends in French White Collar Crime

By Charles Monnot and Marion Seranne on December 20, 2023 Posted in Anti-corruption, Anti-money laundering measures, Bribery, Commercial Bribery, Compliance Program, Corporate compliance, Corruption, Department of Justice, France, Government Investigation, Serious Fraud Office (SFO), United Kingdom, United States, US Department of Justice

France’s Sapin II Law was created in 2016 to address corporate corruption and implement antibribery measures. The legislation took effect in 2017, marking a significant shift in the country’s regulatory compliance landscape. The law, which tracks closely with similar laws in the US, UK, and other EU countries, requires large companies [1] to implement a robust compliance program, including anti-corruption policies, monitoring procedures, and accounting controls. The law also significantly changes the government’s prosecution strategies for white collar crime, particularly in light of guidelines issued in 2023 and discussed below. For large entities operating in France, understanding these changes and their impact is critical to business continuity.

International authorities: collaboration on the rise