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After a three-year crackdown on the use of “ephemeral” electronic messaging platforms by the United States Securities and Exchange Commission (“SEC”) under Chair Gary Gensler, early indications are that the incoming Trump administration may abandon the Gensler-era practice of repeated industry-wide probes into employee use of off-channel communications.
On November 8, 2024, the U.S. Securities and Exchange Commission (“SEC”) announced a settled enforcement action (the “SEC Order”) against Invesco Advisers, Inc. (“Invesco”), an investment advisory firm, for making misleading statements concerning the company-wide percentage of assets under management (“AUM”) that integrated environmental, social and governance (“ESG”) factors in investment decisions.
On October 7, 2024, the U.S. Supreme Court declined to hear a case concerning the “willfulness” element of the Anti-Kickback Statute (the “AKS”).
On September 16, 2024, the United States Securities and Exchange Commission (“SEC” or the “Commission”) brought charges against Kubient, Inc.’s (“Kubient”) former chairman and chief executive officer (“CEO”) for allegedly fabricating reports that the company had successfully tested its AI-supported software program, causing the company to overstate and misrepresent its revenue in connection with two public stock offerings.
On May 23, 2024, the Securities Enforcement Forum West debuted its first-ever panel on the impact of artificial intelligence (“AI”) on securities enforcement, regulation, compliance, and practice, signaling an increased focus on the fast-evolving technology.
In 2023, the Department of Justice (DOJ) achieved a record-breaking number of recoveries under the False Claims Act (“FCA”), underscoring its ongoing commitment to combating fraud against the federal government.
Companies in the midst of government investigations and enforcement actions often must contend with follow-on civil litigation stemming from the same issues. Indeed, due to differing standards of proof, companies that are able to successfully ward off government enforcement actions may still find themselves mired in civil litigation that comes with even more significant discovery and exposure to financial liability.
Another Southern District of New York (“SDNY”) court has sided with the Securities and Exchange Commission (“SEC”) in its enforcement campaign against the unregistered sale of cryptocurrency assets.
On January 10, 2024, the United States Attorney’s Office for the Southern District of New York (“SDNY”) introduced the SDNY Whistleblower Pilot Program (“Pilot Program”), aimed at encouraging individuals to disclose information about specific criminal offenses, particularly urging them to do so early and voluntarily. In return for their cooperation, SDNY will enter into a non-prosecution agreement (“NPA”) if certain conditions are met.
In a long overdue move to fill a perceived gap in U.S. law, this year’s National Defense Authorization Act included a new law that will finally criminalize the solicitation of bribes by foreign officials.