White Collar Law & Investigations

The Foley Hoag White Collar Law & Investigations blog addresses the developing regulatory environment that confronts businesses and individuals in virtually any industry.  Whether federal or state investigations, enforcement actions, changing enforcement priorities, criminal prosecutions or related civil proceedings, the White Collar Law & Investigations blog will provide regular coverage and updates that draw on the deep experience of Foley Hoag’s White Collar Crime & Government Investigations practice.

The Supreme Court in Seila Law LLC v. Consumer Financial Protection Bureau held that the structure of the Consumer Financial Protection Bureau (“CFPB”) violated the separation of powers, but stopped short of finding the entire agency unconstitutional and instead held the CFPB could live on with a director who was removable at will by the President. The Court reasoned that the CFPB’s “unique structure” was unconstitutional because the agency was “vested with significant executive power”…
Last week, the Supreme Court decided in Liu v. SEC that the SEC may continue to seek disgorgement in judicial proceedings as a form of equitable relief under the Securities Exchange Act.  A ruling to the contrary would have deprived the SEC of its most significant tool, in dollar terms, for obtaining monetary relief.  Although the decision preserves the SEC’s disgorgement power, it restricts how courts may disgorge ill-gotten gains in three ways: in general,…
Earlier this month, the Criminal Division of the United States Department of Justice (DOJ) updated its Evaluation of Corporate Compliance Programs guidance.  In considering enforcement actions against companies, prosecutors use the guidance to assist in evaluating (1) the form of any resolution or prosecution, (2) the amount of a monetary penalty, if any, and (3) whether to impose compliance obligations, such as a monitor or reporting requirements.  The guidance thus provides valuable insight into the…
Following up on previous guidance, Steven Peikin, Co-Director of the SEC Division of Enforcement (“Enforcement”), provided updated detail on Enforcement’s response to the COVID-19 pandemic in a virtual keynote address last month at the Securities Enforcement Forum West 2020.  (We discussed Enforcement’s prior statements here and here.)  In his remarks, Peikin affirmed that Enforcement will continue to prioritize COVID-19-related fraud – in particular, microcap fraud, insider trading and market manipulation, and false or misleading…
In the past two weeks, the federal government has charged several individuals in Paycheck Protection Program loan fraud schemes.  The allegations have ranged from applying for loans for non-operating businesses to using loan funds to buy cars and jewelry.  Charges announced this week showed a whole new level of creativity.  A Texas man, Samuel Yates, allegedly used an online name generator to make up the names of hundreds of employees in an effort to…
In yet another sign that the federal government is following through on its warnings about PPP loan fraud, the Department of Justice, according to reports from Reuters, has issued grand jury subpoenas to several Wall Street banks related to an investigation into PPP loans.  The subpoenas were reportedly issued by the DOJ’s Fraud Section.  The issuance of the subpoenas does not necessarily indicate wrongdoing by the banks.  The government frequently issues subpoenas to both…
Federal prosecutors continued to quickly respond to PPP loan fraud, bringing two additional cases that allege clear misuse of the funds intended for small businesses.  In one case, prosecutors in Georgia charged reality TV personality Maurice Fayne, aka “Arkansas Mo” of “Love & Hip Hop: Atlanta” fame, with bank fraud for allegedly using $1.5 million of a $2 million PPP loan to maintain his luxury lifestyle.  Fayne allegedly used the funds on a Rolls- Royce,…
Earlier today, the Supreme Court threw out federal program and wire fraud convictions for two former public officials who conspired to induce traffic jams in Fort Lee, New Jersey as political retaliation in 2013.  Bridget Anne Kelly and William Baroni were convicted of fraud charges in 2015 for their role in diverting lanes of traffic on the George Washington Bridge to “send [Fort Lee’s Mayor Mark Sokolich] a message” after Sokolich refused to support Governor…
On Tuesday, May 5, the Department of Justice (DOJ) filed charges in the federal District Court of Rhode Island against David A. Staveley and David Butziger for conspiracy to make a false statement and conspiracy to commit bank fraud in connection with loan applications made under the federal government’s Payroll Protection Program (PPP).  The Complaint alleges that Staveley of Andover, Massachusetts, and Butziger of Warwick, Rhode Island, misrepresented that they were seeking to use over…