Last week the SEC announced it had reached an agreement with privately-held company Zenefits, and its co-founder and former CEO Parker Conrad, to settle allegations that Zenefits materially misled Series B and C investors. The parties agreed to settle for over a combined $980,000 (Zenefits agreed to pay $450,000, with Conrad responsible for the balance). This appears to be a first-of-its-kind SEC enforcement action against a privately-held company, reflecting this ongoing enforcement priority for the agency in Silicon Valley. Continue Reading With Zenefits Settlement Award SEC Demonstrates Continued Commitment to “Unicorn” Scrutiny Despite Administration Change: Same Old Sheriff in Town
Earlier this year we highlighted the growing trend of regulators asserting continuing post-investigation control over the operations of companies accused of compliance failures. At the state level, we highlighted a deal reached between the California Department of Industrial Relations (DIR) and Zenefits, a privately-held health care brokerage firm, in which the DIR agreed to forgive half of a $7 million fine in exchange for continuing audits to evaluate future compliance with state regulations.
At the federal level, we’re seeing the same trend. Continue Reading If You Give a Mouse a Cookie: Ongoing Regulatory Monitoring Increasing in Federal and State Non-Compliance Resolution
In January of this year, the Federal Trade Commission (FTC) brought suit against Taiwan-based D-Link Corp. and its U.S. subsidiary, D-Link Systems Inc, in Los Angeles Federal Court, for failing to properly secure its consumer routers and computer cameras. According to the FTC, the devices were billed as containing “advanced network security” but actually left thousands of devices vulnerable to hacking and compromise. The results of this FTC suit could create a de facto security compliance regime for all purveyors in the ever-growing “internet of things.” Continue Reading Is There Fire Where There’s Smoke? The FTC Says Yes
After a series of compliance failures leading to the resignation of company’s CEO, the privately-held health care brokerage company Zenefits was just hit with a $7 million dollar settlement by the California Department of Insurance (DIR). The terms of the settlement may reflect a new trend in compliance enforcement, namely that regulators are trading monetary penalties for oversight over privately-held companies. Continue Reading Steep Fines for Company With Compliance Problems, but Recognition of Remediation Efforts May Provide Model Going Forward
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