January 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 last week’s Supreme Court arguments over the scope of the FTC’s authority to obtain money damages, new FTC powers granted within the Consolidated Appropriations Act, recent antitrust criminal indictments of employers involving wage suppression, risk mitigation strategies for companies facing increased antitrust oversight, and the SEC’s newly granted statutory authority to seek disgorgement in civil enforcement cases.
FEATURED ARTICLES
Employers Beware: Recent Criminal Antitrust Cases Involving Wage Suppression and No-Poach Agreements
The Department of Justice Antitrust Division (DOJ) has recently announced two indictments alleging criminal antitrust violations against employers involving wage negotiation and no-poach theories. The cases, which according to the DOJ, constitute per se violations of the Section 1 of the Sherman Act, involve allegations related to employee hiring and compensation decisions. They indicate an evolution of what the Government believes constitutes criminal anticompetitive conduct and illustrate a focus on the healthcare industry. Under the new Biden Administration, investigations related to this type of conduct will likely increase. Read More >
Risk Mitigation for Companies Facing Increased Antitrust Oversight in a Post-Pandemic Environment
By: Tenley A. Carp and William P. Olsen
Since March 2020, as a result of the COVID-19 pandemic, many businesses have been forced, by local, state, and federal orders, and/or economic circumstances, to alter, reduce, or cease operations. As the business landscape changed nearly overnight, companies were forced to make hard choices about the allocation of expenditures on every aspect of their business including personnel, rent, and utilities — and the expenditure of compliance-related expenses was no exception. Corporate compliance departments in business sectors hardest hit by the COVID-19 pandemic were forced to trim compliance-related expenses, consider budget cuts, forgo filling open positions and delay planned investments in forensic technology, all of which raise concerns about the potential for fraud, waste, and abuse. The cutbacks to compliance departments in combination with increased government enforcement actions may be a “perfect storm” for companies that have not maintained a strong level of oversight in the past year. As a result, as companies come out of the pandemic, they may be particularly vulnerable to government fines, penalties, and sanctions – particularly in the antitrust area. Read More >
Congress Confirms SEC's Disgorgement Power: Recovery for Investors or Revenue for Government?
By: Adriaen M. Morse Jr. and Cory C. Kirchert
Tucked into the 2021 National Defense Authorization Act (NDAA) passed over a presidential veto on January 1, 2021, on page 1,238 of the 1,480-page bill, was a modification to the Securities Exchange Act of 1934 (Exchange Act) that constitutes a response to a couple of recent Supreme Court cases that had limited the U.S. Securities and Exchange Commission’s (SEC) ability to obtain disgorgement from defendants in enforcement actions. Prior to the NDAA, the SEC did not have explicit statutory authority to obtain disgorgement from securities law violators; instead, federal courts have conferred such authority in a patchwork of cases over the past 50 years. In the NDAA, Congress modified a section of the Exchange Act that sets out the remedies available to the SEC in addressing violations of the securities laws and granted explicit authority for the SEC to seek disgorgement. The new authority comes with an enhanced, ten-year limitation period for disgorgement related to certain fraud violations. However, the new statute and authority do not necessarily sweep aside the limitations imposed by the Supreme Court in two recent, seminal cases, Kokesh v. SEC and Liu v. SEC. Read More >
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Aaron M. Danzig Partner, Atlanta Office 404.873.8504 aaron.danzig@agg.com |
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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.
