With governments around the world injecting trillions of dollars into the global economy to prevent a financial catastrophe, the first priority for companies is to figure out how to take advantage of the various stimulus packages to save themselves. This is not the time to take the money and run, however.
The US stimulus comes with many strings attached. The CARES Act, signed into law on March 27, 2020, has broad oversight provisions, akin to those in the Troubled Asset Relief Program (TARP) within the Emergency Economic Stabilization Act of 2008 (EESA). The TARP experience teaches that any company that accepts government funds related to the COVID-19 pandemic will be subject to scrutiny by aggressive overseers committed to finding any improprieties, directly, and even indirectly, related to their receipt. Squire Patton Boggs’ related article in Law360 is available here (subscription required).
Aside from the oversight provisions in the CARES Act, companies should not forget the US Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) will be watching too. With massive amounts of government funds pouring into economies across the globe, the potential for fraud and abuse is large, especially in the times of crisis like these. Investigations into violations of the False Claims Act, the Anti-Kickback Statute, the Foreign Corrupt Practices Act (FCPA), and securities fraud laws are on the not-so-distant horizon. Our article in The Anti-Corruption Report available here (subscription required).
Understanding what relief is available and how to obtain it is critical. From small businesses, venture-backed startups, states and municipalities, higher education institutions, and healthcare to trade, supply chains and defense, and other regulated industries, Squire Patton Boggs attorneys are here to help you receive the much-needed assistance. Our Government Investigations & White Collar team, with a combined decades-long experience in congressional investigations and the DOJ and SEC prosecutions, can help you take steps to lessen the likelihood of scrutiny or, if there is scrutiny, minimize the negative fallout.