There were significant developments last week in two recent criminal enforcement initiatives that were first announced earlier this year. First, the Department of Justice (“DOJ”) outlined the details of its long-anticipated whistleblower bounty program.[1] Second, on July 30, 2024, President Biden signed into law a number of amendments to the Foreign Extortion Prevention
Cleary Enforcement Watch
News and Analysis Related to Global Enforcement, White-Collar, and Regulatory Trends and Developments
Blog Authors
Latest from Cleary Enforcement Watch
California Updates Diversity Reporting Law for Venture Capital Funds to Start in 2026
Earlier this month, the California State Budget released for approval by the state legislature included an updated version of Senate Bill 54 (the “VC Diversity Law”). The latest version contains several updates to the VC Diversity Law, including revisions to the definition of “covered entity;” that said, as we discuss below, it is not clear…
The “VACATED” Heard ‘Round the World: What’s Next after the SEC Private Fund Adviser Rules?
What’s next after PFAR? In its highly-awaited June 5th opinion, the Fifth Circuit Court of Appeals vacated all of the SEC’s Private Fund Adviser rules (“PFAR”), agreeing with industry trade associations that the SEC lacked the necessary statutory authority to adopt PFAR. In our latest Client Alert, we examine the opinion, aspects of the rules…
Keener, Almagarby, and the Scope of the “Dealer” Definition: Potential Implications for Fund Managers and other Investors
With its decision in Securities and Exchange Commission v. Keener (May 29, 2024), the U.S. Court of Appeals for the Eleventh Circuit has now twice in the span of four months affirmed a broad interpretation of who is considered a “dealer” for purposes of the securities laws. More specifically, the Eleventh Circuit upheld the Securities and…
Fifth Circuit Vacates Private Fund Adviser Rules in Entirety
On June 5, 2024, the U.S. Court of Appeals for the Fifth Circuit issued its opinion on National Association of Private Fund Managers et. al. vs. Securities and Exchange Commission, the lawsuit brought by a group of trade associations representing the private funds industry against the Securities and Exchange Commission (“SEC” or the “Commission”) challenging…
SEC Adopts Amendments to Reg S-P
On May 16, 2024, the Securities and Exchange Commission (the “Commission” or “SEC”) adopted a final set of amendments (the “Final Amendments”) to Regulation S-P (“Reg S-P”) to require “covered institutions,” which include SEC-registered investment advisers (“RIAs”) and broker-dealers, to adopt an incident response program for incidents involving unauthorized use of or access to customer…
Statute of Limitations for U.S. Sanctions Violations Extended from Five to Ten years
On April 24, 2024, President Biden signed into law H.R. 815, a foreign aid bill containing a provision that doubles the statute of limitations (SoL) for civil and criminal violations of U.S. sanctions and other national security programs from five years to ten years.…
DOJ Announces New Pilot Program Seeking Voluntary Self-Disclosures from Culpable Individuals Aimed At Uncovering Corporate Misconduct
On April 15, 2024, the Criminal Division of the Department of Justice (“DOJ”) launched the Pilot Program on Voluntary Self-Disclosure for Individuals (“the Individual VSD Pilot Program”), which represents the latest in a string of announcements by DOJ focused on catching companies and individuals that engage in corporate crime.…
SEC Announces Reforms for Internet Investment Advisers
On March 27, 2024, the U.S. Securities and Exchange Commission (“SEC”) announced amendments to the Internet Adviser Exemption, which permits investment advisers that provide advisory services through the internet (“Internet Investment Advisers”) to register with the SEC under the Investment Advisers Act of 1940 (“Advisers Act”) if they do not otherwise have enough assets under…
SEC Announces “AI-Washing” Cases Against Investment Advisers
On March 18, 2024, the SEC announced two enforcement actions against investment advisers for so-called “AI-washing” and violations of the Marketing Rule. Using the playbook from the Enforcement Division’s “green-washing” cases in the ESG space, the SEC found that the two investment advisers marketed that they were using AI in certain ways, when in fact,…