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A summer day in front of the US Supreme Court Building in Washington, DC.

White-collar criminal prosecutions frequently involve charges under the federal mail and wire fraud statutes. Those statutes criminalize using the mail system or interstate wires for “any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises.” 18 U.S.C. § 1341 (mail fraud statute); § 1343 (wire fraud statute). But circuit courts are nearly evenly split on whether it is enough for an individual to fraudulently induce a fair commercial exchange or whether that individual must intend to inflict economic harm. On June 17, 2024, the U.S. Supreme Court granted the petition for writ of certiorari in Kousisis v. United States to answer that question in its upcoming term. Merits briefing is expected to be complete on October 6. (A similar petition filed by the convicted former dean of Temple University’s Fox School of Business is still pending.)

Continue Reading Supreme Court Poised to Address Fraudulent Inducement Theory of Mail and Wire Fraud in 2024-25 Term

On June 27, 2024, in SEC v. Jarkesy, the Supreme Court of the United States held that the Seventh Amendment entitles a respondent to a Securities and Exchange Commission securities fraud action seeking civil monetary penalties to a jury trial. Although the federal agency at issue in Jarkesy was the SEC, the decision is likely to have significant implications for other agencies that seek to impose civil penalties for fraudulent acts, including the U.S. Federal Energy Regulatory Commission, whose anti-manipulation rule is modeled after the SEC’s own anti-fraud rule.

Click here to read the full Update.

The U.S. Department of Justice’s new Whistleblower Rewards Program and its Pilot Program on Voluntary Self-Disclosures for Individuals will reshape the factors companies consider when investigating and disclosing any corporate or financial issue that may fall within DOJ’s purview. Both programs incentivize individuals who voluntarily provide the DOJ with original, nonpublic, truthful disclosures that allow DOJ to prosecute corporate wrongdoing. The Whistleblower Rewards Program, which has not yet been detailed, will serve as a nationwide access point for individuals to report issues for potential monetary gain. The Pilot Program on Voluntary Self-Disclosures for Individuals, which is already in effect, serves as a means for corporate insiders to report on their own misconduct in exchange for leniency. Although both programs will originate under the Criminal Division, the DOJ has signaled that it may eventually apply these programs across the department. Companies are left to navigate how these new programs affect their corporate compliance programs, investigative functions, and self-disclosure analyses.

Continue Reading Navigating the DOJ’s New Whistleblower and Self-Disclosure Programs

In a 6-3 decision in SEC v. Jarkesy, the Supreme Court of the United States ruled that respondents to a U.S. Securities and Exchange Commission in-house enforcement action alleging securities fraud and seeking civil penalties have a right to a federal jury trial under the Seventh Amendment. The decision by Chief Justice John Roberts, which seemingly applies to federal agencies generally, represents yet another curtailment of the SEC’s authority.

On the heels of the 2018 Lucia decision and the 2023 Axon decision, the Court continues to chip away at the SEC’s enforcement authority. The decision also narrows the “public rights” exception that permits federal agencies to conduct in-house enforcement actions without a jury trial in certain circumstances.

Read the full Update here.

Perkins Coie partners Chelsea Curfman, Kevin Feldis, Allison Handy, and Michael House provided an in-depth review of key environmental, social, and governance and corporate social responsibility considerations for companies operating in the United States. These include the U.S. Securities and Exchange Commission’s new climate-related disclosure rules, California climate disclosure requirements, greenwashing and materiality considerations, and forced labor and supply chain due diligence (including the Uyghur Forced Labor Prevention Act). Participants walked away with valuable insights and practical takeaways that will help your teams navigate the complex and quickly evolving ESG and CSR landscape. 

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On May 22, 2024, the Department of Justice (“DOJ”) made a groundbreaking announcement that it declined prosecution of a biochemical company based on the company’s prompt voluntary self-disclosure of an employee’s export control violation and the company’s “exceptional” cooperation with DOJ’s National Security Division (“NSD”), the DOJ subcomponent responsible for investigating and prosecuting economic sanctions and export control violations (among other national security-related matters).

This is the first declination the NSD has announced since issuing its new corporate enforcement policy (“NSD Enforcement Policy”) in March 2024.  As discussed in our prior articles, DOJ announced a shift last year toward prioritizing investigation and enforcement against corporations for economic sanctions and export control violations, with Deputy Attorney General Lisa Monaco famously announcing that “sanctions are the new FCPA” and declaring that corporate enforcement in these areas is now a top DOJ priority.  This declination provides valuable insight into how the NSD will handle corporate enforcement of these matters and, importantly, signals a willingness to give meaningful credit to companies that self-disclose and cooperate in the investigation of violations in this area.

Continue Reading First-Ever Declination Under DOJ NatSec Corporate Enforcement Policy: DOJ Signals Willingness to Meaningfully Credit Voluntarily Self-Disclosing and Cooperative Company Involved in Export Control Violations

Perkins Coie Partner Jamie Schafer and Senior Counsel Jim Vivenzio provide an overview of key provisions of the Corporate Transparency Act, including the “beneficial ownership” reporting requirements, timeframes for filing and reporting logistics, and liability considerations for companies and senior officers. The presentation provides practical takeaways for in-house counsel along with discussion of common challenging scenarios and nuances as to application of the exemptions and identification of “beneficial owners” under the rule. Participants also received Perkins Coie’s CTA Quick Tips Sheet and How-To guides for obtaining identification numbers (FinCEN IDs) and filing Beneficial Ownership Information Reports under the CTA. 

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During a keynote speech on March 7, 2024 at the American Bar Association’s National Institute on White Collar Crime, Deputy Attorney General Lisa Monaco announced that the Department of Justice (DOJ) will launch a pilot program offering financial incentives for individual whistleblowers to report corporate wrongdoing to the DOJ. According to DAG Monaco, the pilot program intends to use “carrots to wield larger sticks” on a full range of corporate misconduct and reinforces the DOJ’s commitment to implementing policies aimed at promoting cultures of corporate compliance. While DAG Monaco’s announcement invoked past images of law enforcement incentivizing reporters with “Wanted” posters, the anticipated pilot program will have significant ramifications on the future of companies’ existing internal compliance reporting channels.

Continue Reading Whistle While You Work: DOJ Announces Whistleblower Rewards Program

On January 10, 2024, the U.S. Department of Justice (DOJ) and the U.S. Securities and Exchange Commission (SEC) announced settlements with SAP SE (SAP), a German software company, to resolve allegations that SAP violated the U.S. Foreign Corrupt Practices Act (FCPA) by, among other things, making improper payments to government officials in South Africa and Indonesia to secure and retain software and services contracts with government entities. SAP agreed to pay the DOJ and the SEC over $220 million and entered into a three-year deferred prosecution agreement (DPA) with the DOJ. The U.S. regulators coordinated their resolutions with prosecutors in South Africa.

The resolutions provide insights into how the DOJ and the SEC are enforcing the FCPA and how corporations can reduce their FCPA liability.

Continue Reading Key Takeaways from SAP’s FCPA Resolutions with DOJ and SEC

The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has proposed new rules that would require anti-money laundering/countering the financing of terrorism (AML/CFT) programs for investment advisers.  The pdf is currently available, and will likely be replaced by the Federal Register version once published.  The final form of the rule, if adopted, remains to be determined, as does the compliance date.

Continue Reading The U.S. Department of Treasury, Financial Crimes Enforcement Network Proposes New and Expansive Anti-Money Laundering Rules For Investment Advisers