In announcing recent changes to its corporate criminal enforcement policies, the Department of Justice (“DOJ” or the “Department”) continued its forceful “tough on crime” initiatives to deter wrongdoing.
On August, 26, 2022, the Federal Trade Commission announced it had approved a series of “omnibus” resolutions permitting FTC staff to more freely use compulsory process (civil investigative demands or subpoenas) in investigations of alleged violations of the federal antitrust laws.
On August 24, 2022, California Attorney General Rob Bonta announced a settlement with Sephora, one of the largest cosmetic retailers in the world, to resolve allegations that the company illegally sold consumer data and violated the California Consumer Privacy Act (“CCPA”).
On June 7, 2022, the media published a search warrant application seeking access to the electronic communications of a retired four-star Marine Corps general, General John R. Allen, in a criminal investigation into potential violations of the Foreign Agents Registration Act (“FARA”).
On May 18, 2022, the Fifth Circuit issued an opinion vacating a Securities and Exchange Commission (“SEC”) Administrative Law Judge’s (“ALJ”) decision that George Jarkesy, Jr. (“Jarkesy”) and his investment adviser Patriot28, L.L.C. (“Patriot28”) committed securities fraud.
On May 6, 2022, the Securities and Exchange Commission (“SEC”) announced a $5.5 million settlement of charges against NVIDIA Corporation (“NVIDIA”) for allegedly failing to adequately disclose in the Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) section of its Forms 10-Q the fact that cryptomining was a significant factor in the year-over-year growth in its more traditional gaming business.
On April 18, 2022, the Securities and Exchange Commission (“SEC”) announced the fourth enforcement action arising from its EPS Initiative, charging Rollins Inc. (“Rollins”) and its former chief financial officer (“CFO”) with violating Section 17(a) of the Securities Act of 1933 (“Securities Act”) and Sections 13(a), 13(b)(2)(A), and 13(b)(5) of the Securities Exchange Act of 1934 (“Exchange Act”) by engaging in improper accounting practices in order to boost the company’s publicly reported quarterly earnings per share (“EPS”) to meet research analysts’ consensus estimates.
In yet another indication that the Biden administration is continuing to ramp up white collar enforcement, the U.S. Department of Justice (“DOJ”) and Securities and Exchange Commission (“SEC”) announced on April 20, 2022 that Stericycle, Inc. (“Stericycle”), an Illinois-based international waste management company, has agreed to pay more than $84 million to resolve parallel Foreign Corrupt Practices Act (“FCPA”) investigations by authorities in the United States and Brazil.
On March 9, 2022, the Securities and Exchange Commission (“SEC”) announced Proposed Rules on cybersecurity risk management, strategy, governance, and incident disclosure (“Proposed Rules”) to address concerns of increasing cybersecurity threats to public companies.