The announcement that San Francisco private company Hampton Creek faces an SEC inquiry related to their alleged “buyback” program of vegan mayo comes as no shock. See reporting on Bloomberg. As soon as the facts were initially reported it seemed only a matter of time until the regulators, who have been looking for a poster child (or rather, a whole class of poster children) of private company enforcement in the Bay Area, swooped in. Continue Reading Developments in SEC Private Company Enforcement: Sophisticated VC’s in the Role of Victim

We noted with interest the latest moves by some Bay Area tech giants to permit their employees to sell restricted stock to help them realize the stock value as part of their compensation: See New York Times reporting here. It should come as no surprise that private company employees in our tech economy rely on their potential restricted stock value as an important part of their compensation package, and also their decision whether to work for, or stay working for, one of the “hot” pre-IPO companies (which are legion in Northern California). What may surprise private companies is that this kind of restricted stock sale by employees creates a very easy “in” for the SEC to bring a case should any hidden compliance failures or fraud later be revealed. Continue Reading Private Company Employee Stock Sales Highlight Hidden Dangers of Compliance Failures


The brightest minds in Silicon Valley work 24/7 to disrupt existing systems and industries. No one can argue that Uber and Lyft haven’t fundamentally altered transportation, that AirBnB hasn’t changed the way we travel, or that Netflix hasn’t rendered brick and mortar video rental stores obsolete. Can those same minds harness the innovative energy of the region to make it easier for regulated industries to comply with state and federal laws? At least one Silicon Valley company thinks so, and is exploring new ways to marry its technological expertise with its compliance obligations. Continue Reading Private Company Enforcement: Bay Area Tech Company Designs Tech Solution to Its Compliance Problems

Every day corporate entities and individuals in some parts of the world provide payments to foreign officials in exchange for business favors. While it may be a common feature of business in these places, this kind of activity is illegal under the Foreign Corrupt Practices Act (FCPA), which criminalizes various acts of bribery and related accounting fraud. The consequences for failing to comply with the FCPA are severe, and ensuring compliance can be especially difficult for start-up or relatively young companies growing rapidly and expanding into foreign markets before they can institute robust compliance systems. Continue Reading Minding the Compliance Gap in an Evolving FCPA Landscape

When the Volkswagen emissions scandal hit the press last year, we wondered which agency would manage the subsequent investigations. We are still waiting on the car company’s plan to remedy the emissions testing software and waiting to see if criminal charges will be filed—and if so, who specifically will be in the DOJ’s criminal crosshairs (DOJ filed a mammoth civil suit in January). The DOJ isn’t the only agency stepping up enforcement in the emissions space, however. This past week the SEC got in the emissions game on the security side, charging Navistar International with misleading investors in connection with their truck engine emissions. Continue Reading SEC Spotlight Hits Emissions Issues

The Department of Justice’s white collar and fraud sections have been focused on domestic issues as of late, and Foreign Corrupt Practices Act (FCPA) prosecutions fell out of the limelight. Lest any corporation or defense counsel get too comfortable in that assumption, however, the DOJ issued a new guidance memo circling back to the FCPA and announcing a number of changes that signal a renewed focus on FCPA violations – and an increased focus on settlement. Continue Reading DOJ Amping Up FCPA Prosecution Efforts While Offering New Cooperation Benefits

The Securities and Exchange Commission organized an Advisory Committee on Small and Emerging Companies to provide the SEC with advice on its rules, regulations and policies as they relate to emerging privately held small businesses and publicly traded companies with less than $200 million in public market capitalization.   The Advisory Committee issued its recommendations to the SEC Chair, Mary Jo White back on September 23, 2015: Continue Reading SEC Looks to Ease Small Business Ability to Raise Capital

The Federal Bar Association’s annual kick-off event – “Views from the Top” – provides the white collar criminal defense bar an invaluable preview of the enforcement priorities of the Department of Justice, the U.S. Attorney’s Office for the Northern District of California, and the Securities and Exchange Commission.  Yet one preview that should be of particular interest to local companies stood out – the typically opaque pre-IPO space should expect heightened scrutiny by the SEC. Continue Reading Pre-IPO Companies – SEC 2016 Enforcement Priority

California Corporations Code Section 25206.1, which became effective January 1, 2016 permits “finders” to be exempt from broker-dealer provisions of California securities laws. In other words, this new section legalizes payments of finder’s fees by an issuer of securities to a person who introduces one or more accredited investors to that issuer, regardless of whether that person is a registered broker. Continue Reading Payments to Finders Fall Outside of California Broker-Dealer Provisions