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On February 22, 2023, the Securities and Exchange Commission (“SEC”) issued a cease-and-desist order (the “Order”) charging African Gold Acquisition Corp. (“African Gold”) with multiple violations of the Securities Exchange Act of 1934 (the “Exchange Act”) related to African Gold’s failure to maintain a sufficient system of internal controls.1
On February 7, 2023, the Securities and Exchange Commission’s Division of Examination (the “Division”) announced its 2023 examination priorities to “provide insights into its risk-based approach, including the areas it believes present potential risks to investors and the integrity of the U.S. capital markets.”
On January 13, 2023, the Supreme Court granted certiorari in two consolidated cases from the Seventh Circuit to consider whether a defendant relying on an objectively reasonable interpretation of an ambiguous law acts “knowingly” in violation of the False Claims Act (“FCA”).
On February 3, 2023, the SEC announced that Activision Blizzard Inc. — the publicly traded video game developer and publisher of such well-known videogames as “Candy Crush” and “World of Warcraft” — “agreed to pay $35 million to settle charges that it failed to maintain disclosure controls and procedures to ensure that the company could assess whether its disclosures pertaining to its workforce were adequate” and “violated an SEC whistleblower protection rule” by impeding employees “from communicating directly with the Commission staff about a possible securities law violation.”
V&E SEC Update
In an apparent response to a downturn in corporate cases and criticism that its harsh rhetoric was chilling corporate cooperation, the Department of Justice (“DOJ”) recently announced significant changes to its policy on corporate enforcement aimed at sweetening the deal for companies under criminal investigation.
On January 9, 2023, the Securities and Exchange Commission (“SEC”) issued a cease-and-desist order (the “Order”) charging McDonald’s Corporation (“McDonald’s”) and its ex-CEO, Stephen Easterbrook, with multiple disclosure violations related to Easterbrook’s departure from McDonald’s following his inappropriate relationships with McDonald’s employees.
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.
Published in Law360 on October 3, 2022
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.