On June 22, 2020 the Department of Justice Antitrust Division (Antitrust Division) and the Securities and Exchange Commission (SEC) announced that they had signed an interagency Memorandum of Understanding (MOU) to allow for more cooperation and communication between the two agencies.

Although these agencies have worked together in the past, this is the first time the Antitrust Division and the SEC have entered into a formal agreement. The agencies hope that this agreement will improve competition in the securities industry. As SEC Chairman Jay Clayton explained, “As competition is embedded in our securities laws, there are many policy areas where the missions of the SEC and DOJ’s Antitrust Division align, but where our respective areas of expertise differ. By formalizing the exchange of knowledge between our agencies, we aim to foster even greater collaboration and cooperation to ensure that we maintain the efficient and competitive markets that American investors rely on.”


Continue Reading New Cooperation Agreement Between the DOJ Antitrust Division and SEC

Securities litigation and enforcement activity often surge in times of crisis. Indeed, bedrock federal securities regulations were borne out of an extended crisis: the stock market crash of 1929 and the decade-long Great Depression that followed.

COVID-19 has already set off a wave of securities litigation. These private lawsuits and putative class actions have been based on allegedly misleading statements in securities filings and public statements. But issues surrounding proof in the COVID-19 era, including demonstrating the “price impact” of alleged misrepresentations for purposes of reliance and loss causation, limit the viability of these claims.

As public companies anticipate the next wave of securities activity they should expect limitations on private lawsuits to prompt the Securities and Exchange Commission (SEC) to ramp up civil enforcement. The Department of Justice (DOJ) may even launch related criminal investigations in high-profile cases.

We discuss below recent COVID-19-related securities litigation and enforcement trends, special issues with reliance and loss causation, and best practices to avoid the expected onslaught of SEC enforcement and DOJ investigations.


Continue Reading Securities Enforcement Activity in the COVID-19 Era: A Backstop to Private Securities Litigation

On May 20, 2020, panelists from the DOJ, SEC, and FBI participated in a virtual town hall to discuss the state of play of FCPA and healthcare fraud enforcement as the United States and the rest of the world navigate the wide-ranging challenges wrought by the COVID-19 pandemic.

Government panelists included:

  • Robert Zink (Chief of the Fraud Section, Criminal Division, DOJ);
  • Daniel Kahn (current Senior Deputy Chief of the Fraud Section, and former FCPA Unit Chief, DOJ);
  • Joe Beemsterboer (current Senior Deputy Chief of the Fraud Section, and former Chief of the Health Care Fraud Unit, DOJ);
  • Charles Cain (Chief of the FCPA Unit of the SEC’s Division of Enforcement); and
  • Leslie Bakschies (Unit Chief at the FBI).


Continue Reading Key Investigation and Compliance Take-Aways from May 20, 2020 DOJ, SEC, and FBI Joint Town Hall Discussing FCPA and Healthcare Fraud Enforcement Efforts During COVID-19 Emergency

According to the European Commission,[1] fraud offences against the European Union (EU) budget cost the EU and its member states over €1 billion in losses in 2018, in addition to the annual losses of around €150 billion resulting from VAT fraud. With current criminal enforcement efforts across the EU apparently failing to effectively tackle such offences, the EU established the European Public Prosecutor’s Office (EPPO) to act as an independent and decentralized office with the power to investigate and prosecute crimes against the EU budget, such as fraud, corruption, misappropriation and cross-border VAT-related fraud.

Set to become fully operational in November 2020, based in Luxemburg, with its funding for 2020 increased by nearly 50%, the EPPO is expected to ramp up prosecutions of corporate crime concerning the EU’s financial interests and facilitate the recovery of misused EU funds. Previously, only national authorities could investigate and prosecute such offences within the scope of their own borders.


Continue Reading European Public Prosecutor to Take EU Finance Fraudsters to Task?

UK law enforcement is not immune to the unprecedented levels of business disruption caused by COVID-19. While not all agencies have published specific guidance on how they propose to operate and conduct enforcement investigations during this crisis (including, for example, Her Majesty’s Revenue & Customs, the Serious Fraud Office, and the National Crime Agency), a