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May 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 continue our analysis of the SEC’s cryptocurrency-suppression program. We also discuss the increasing number of PPP loan fraud prosecutions, last month’s Supreme Court decision limiting the FTC’s authority to obtain money damages, expanded regulation of cryptocurrency under the Anti-Money Laundering Act of 2020, and revised defense-related procurement regulations under the National Defense Authorization Act for Fiscal Year 2021.
FEATURED ARTICLES
Deconstructing the SEC's Cryptocurrency-Suppression Program, Part IV: The Origins of the Enterprise Concept
By: Adriaen M. Morse Jr. and Cory C. Kirchert
This is the fourth article in a series that examines how the Securities and Exchange Commission (“SEC”) has expanded its statutorily limited jurisdiction to suppress transactions of digital assets, including cryptocurrencies. Part I provides context for the series and discusses a couple of the SEC’s sleights of hand in initiating its anti-cryptocurrency effort. Part II discusses the SEC’s early involvement with digital assets, and Part III discusses types of digital assets and how utility tokens and currency tokens are not, in our opinion, sufficiently distinct to matter under the SEC’s cryptocurrency suppression program (“Suppression Program”). Read More >
Update: The Growing Wave of PPP Loan Prosecutions
By: Sara M. Lord
As the pandemic slowly recedes, leaving a host of hastily-enacted funding and programs in its wake, the government’s recovery and clean-up efforts are well underway. In April and May 2021, the Department of Justice (DOJ) announced a wide range of arrests, indictments, sentencings, and forfeitures involving pandemic relief fraudsters. A survey of these cases indicates that the government’s enforcement efforts are not only extensive, involving multiple law enforcement agencies and task forces, but are also relying on multiple fraud statutes, including identity theft and money laundering, as well as significant forfeitures. Read More >
The Tail Must Stop Wagging the Dog: Unanimous Supreme Court Reins in FTC Section 13b Authority
By: Theresa Y. Kananen, Edward A. Marshall, and Morgan E. M. Harrison
As we previously wrote, one of the biggest FTC decisions in decades was recently argued before the United States Supreme Court. And on Thursday, April 22, 2021, the Supreme Court unanimously ruled against the Federal Trade Commission in the landmark case AMG Capital Management v. Federal Trade Commission. Read More >
Anti-Money Laundering Act Expands Regulation of Cryptocurrency and Other Digital Assets
By: Theresa Y. Kananen and Morgan E. M. Harrison
We previously wrote about the National Defense Authorization Act for Fiscal Year 2021 (the “NDAA”), which became law on January 1, 2021. The NDAA includes the Anti-Money Laundering Act of 2020 (the “AML Act”), which in turn contains significant changes to the Bank Secrecy Act (“BSA”) and other anti-money laundering (“AML”) laws. The BSA, enacted in 1970, requires financial institutions to assist the federal government in detecting and preventing money laundering and terrorism financing by meeting special program, recordkeeping, and reporting requirements. Read More >
Three-Pronged Approach: The NDAA Prioritizes a Pro-Domestic Procurement Policy
By: Theresa Y. Kananen and Micah Kanters
On January 1, 2021, the National Defense Authorization Act for Fiscal Year 2021 (“NDAA”) was passed by Congress and became law, following an attempted veto by former President Donald Trump. The NDAA’s primary purpose is to set the budget, expenditures, and policies of the United States Department of Defense (“DoD”), but the 1,480 pages do far more than that. As we have previously written, NDAA’s voluminous pages contain a requirement that a vast number of business entities disclose their beneficial owners in a newly created registry to be maintained by the Financial Crimes Enforcement Network; further protections for whistleblowers; and substantially expanded subpoena authority for the United States government over foreign bank accounts. But the NDAA does not stop there. 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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