Feb. 28, 2024

Clawing Back the DOJ’s Compensation Clawback Pilot Program

During 2023, the legal and compliance community saw a multitude of revisions to DOJ corporate-related enforcement policies. One of the most significant policy updates was the DOJ Criminal Division’s roll out in March 2023 of a pilot program relating to “Incentives and Compensation Clawback[s].” In this guest article, Cadwalader, Wickersham and Taft lawyers Martin J. Weinstein and Emily M. Wells analyze whether the program’s Deferred Fine Reduction component, as currently drafted, can meet its aims to “reward corporations” and “shift the burden of corporate financial penalties away from shareholders.” See “How Deputy AG’s Focus on Clawbacks and National Security Impacts Enforcement and Companies’ Compliance Efforts” (Oct. 25, 2023).

Entain Case Illustrates Online Gaming Growing Along With Enforcement

Online gaming company Entain recently became the subject of the first deferred prosecution agreement to ever be brought by the U.K.’s Crown Prosecution Service (CPS). It includes £10 million payable to the CPS and HM Revenue & Customs, and a charitable donation of £20 million. The ruling is significant in many ways, not least because of the size of the penalty. It marks the end of a 2019 investigation into the former GVC Holdings, outlining a four-year payment plan and crediting the company with making significant improvements in its “management and approach.” Entain’s case serves as a guidepost for where future pitfalls and penalties could arise. This article offers insights from Calli Law, Duane Morris and Hogan Lovells. See “Red Flags and Multiple Acquisitions Yield a $4‑Million SEC Penalty for PokerStars Owner” (Jun. 21, 2023).

Fewer Individual Charges and More Focus on Third Parties in 2023’s FCPA Enforcements

Individuals being charged in FCPA enforcements have declined in recent years, even as the numbers of corporate enforcements have climbed, but this may change with the recent passage of the Foreign Extortion Prevention Act. Meanwhile, FCPA cases are increasingly focused on third-party intermediaries, Morrison Foerster’s 2023 FCPA Year in Review found. Another recent report, the Year in Review 2023 published by the Fraud Section of the DOJ’s Criminal Division, offered key details on FCPA matters. This article discusses significant trends and findings from both reports, including helpful data on what cooperative or remedial behaviors most often win companies credit when it comes to penalties. See “FCPA Enforcement, Changes in 2023 Foretell a Busy Year Ahead” (Jan. 17, 2024).

Navigating the New FinCEN Beneficial Ownership Reporting Regime

On January 1, 2024, a new beneficial ownership reporting rule (Rule) issued by the U.S. Department of the Treasury’s Financial Crimes Enforcement Network took effect. The Rule will affect a broad range of businesses, from startups to established entities, and creates particular challenges for investment management firms, noted Seward & Kissel partner Patricia A. Poglinco in a recent program devoted to the Rule. Poglinco, who moderated the discussion with fellow partners Sophia A. Agathis, Noelle Indelicato and Danielle Lemberg, discussed the key components of the Rule, including which entities are subject to it, who is a “beneficial owner,” what information companies are required to report and the practical implications of the Rule for fund managers. This article synthesizes the key takeaways from the program. See “Progress and Challenges in Implementation of Anti-Money Laundering Act of 2020” (Jun. 21, 2023).

False Claims Act: Key Decisions and Predictions

There was much activity associated with the False Claims Act (FCA) in 2023, including significant developments pertaining to whistleblowers and a notable focus on the healthcare sector. Judgments and settlements related to the FCA exceeded $2.68 billion in value. The Supreme Court settled important questions relating to defendants’ knowledge in false claims cases and the government’s authority to dismiss whistleblower suits. This article distills analysis and trends offered in Hogan Lovell’s 2024 False Claims Act Guide and by the DOJ’s recent statement. See “New Year, Not So New Anti-Kickback Statute Enforcement Trends at the DOJ” (Feb. 14, 2024).

Willkie Welcomes Seasoned White-Collar Litigator As Partner in San Francisco and Palo Alto

Willkie Farr has announced the addition of Michael Li‑Ming Wong as a partner in the litigation department and co-chair of the national white-collar defense group. He is based in the firm’s San Francisco and Palo Alto offices. For commentary from Wong, see “Practitioners Take the Pulse of Anti-Corruption Compliance and Enforcement in China” (Mar. 15, 2017). For insights from Willkie, see “Enforcement Actions Resulting From SEC Sweep Keep Off-Channel Communications in the Spotlight” (Nov. 8, 2023).

Morrison Foerster Expands Global Sanctions Capabilities With New National Security Partner in London

Morrison Foerster has announced the addition of criminal barrister and international lawyer Chloe Cina as a partner in the firm’s national security group, based in London. Her practice combines her first-hand knowledge gained as a government legal advisor with extensive sanctions compliance experience derived from working for two global financial institutions. She joins from Deutsche Bank. For insights from Morrison Foerster, see “Newly Signed Foreign Extortion Prevention Act Complements FCPA” (Jan. 3, 2024); and “Albemarle Resolutions Bring First Application of DOJ’s Compensation Incentives and Clawbacks Pilot Program” (Nov. 8, 2023).