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February 2021
AGG’s Government Investigations Team Insights provides periodic updates covering legal and regulatory topics. Our team, which includes former federal prosecutors, SEC enforcement attorneys, and federal agency attorneys, has successfully represented companies and individuals, including executives of public companies, in numerous civil and criminal investigations, including before the U.S. Department of Justice and U.S. Attorney’s Offices, the SEC, the EPA, the FDA, the FTC, and many other federal and state agencies. We also assist our clients by conducting internal and parallel investigations, and advising them regarding the related issues that often follow government investigations, including civil litigation, media interest, and reputational concerns.
In this edition, we cover the first False Claims Act settlement against a recipient of PPP funds, how the Anti-Money Laundering Act of 2020 will lead to increased government financial investigations, a recent appellate ruling that clever omissions in statements by a corporate officer can constitute securities fraud, and a recent FTC antitrust lawsuit against two large pharmaceutical companies. Also, AGG partners Aaron M. Danzig and Sara M. Lord will be presenting a complimentary webinar analyzing major government investigations in the life sciences space last year and what may be on the horizon for 2021. The webinar will be on Thursday, February 11 from 1 – 2 PM EST. For more information and to register, please click here.
FEATURED ARTICLES
The Beginning of a Wave? First Civil Fraud Settlement Against Recipient of PPP Funds
By: Aaron M. Danzig
In a sign of things to come, on January 12, 2021, the Department of Justice (DOJ) announced the first civil settlement to resolve fraud claims involving loan recipients under the Paycheck Protection Program (PPP). We noted back in October that over 50 criminal cases related to COVID-19 fraud had been filed, and that the Treasury Department and the Small Business Administration (SBA), in addition to the DOJ, were formulating plans to review potential fraud and abuse of the PPP program and other COVID-19 relief measures. Read More >
A Cautionary Tale for Executives: Clever Omissions Can Equal Fraud
By: Adriaen M. Morse Jr. and Cory C. Kirchert
An appellate court upheld a judgment that clever omissions from statements made by a corporate officer constituted securities fraud. On January 22, 2021, the U.S. Court of Appeals for the First Circuit in Boston, Massachusetts upheld a jury’s fraud verdict against an executive in a securities case tried in the U.S. District Court for the District of Massachusetts. In a 30-page opinion, the Court in SEC v. Johnston refused to overturn a verdict finding that defendant David Johnston, the former chief financial officer of AVEO Pharmaceuticals, Inc., renamed AVEO Oncology (“AVEO”), had engaged in fraudulent conduct under Section 10(b) of the Securities Exchange Act of 1934 (and Rule 10b-5 thereunder) and Section 17(a)(1) of the Securities Act of 1933. Read More >
“Modernized” and “Improved” Systems and Processes: How the Anti-Money Laundering Act of 2020 Changes the Landscape for Government Investigations
By: Sara M. Lord and William P. Olsen
With bipartisan support and overriding (for the first and only time during the Trump presidency) a presidential veto, Congress passed the National Defense Authorization Act (“NDAA”) on January 1, 2021. As part of the NDAA, Congress enacted the most comprehensive and substantial changes to the anti-money laundering and counter-terrorism financing laws, the Anti-Money Laundering Act of 2020 (“AMLA”), since the USA PATRIOT Act amended the Bank Secrecy Act (“BSA”) in 2001. While the AMLA expressly addresses defense and national security concerns regarding money laundering and terrorism, the wide-ranging legislation, which expands the government’s enforcement and investigative authority, as well as its access to information, has significant implications for government investigations generally. Read More >
Break It Up: FTC Files Antitrust Action Against Big Pharma Companies
By: Theresa Y. Kananen and Edward A. Marshall
On January 25, 2021, just weeks after Congress directed the Federal Trade Commission (FTC) to scrutinize the healthcare industry for anti-competitive activity, the FTC filed a meticulously detailed complaint against Endo Pharamceuticals, Inc. and Impax Laboratories, LLC in the District Court for the District of Columbia, alleging that the defendants obtained an unlawful monopoly on the opioid drug oxymorphone ER. Read More >
GOVERNMENT INVESTIGATIONS TEAM CONTACTS
Aaron M. Danzig Partner, Atlanta Office 404.873.8504 aaron.danzig@agg.com         Sara M. Lord Partner, DC Office 202.677.4054 sara.lord@agg.com
The information presented provides a general summary and/or recent legal and regulatory developments. It is not intended to be, and should not be relied upon as legal advice.
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