Farella Braun + Martel

It always comes when you least expect it – a government inquiry to investigate your business. While it may instill a sense of panic, there are steps you can take to make sure you’re in the best position possible when the investigation begins.

This blog series developed by Chrysty Esperanza, Litigation Counsel at Square, Inc., will address this main question: When you receive a subpoena, CID, or informal request from the government, how should you respond?


Cooperation and Voluntary Disclosure Issues – Benefits + Risks of Self Reporting

The Foreign Corrupt Policies Act (FCPA) unit at the DOJ recently enacted its Corporate Enforcement Policy. According to the policy, if a company self-reports an FCPA violation and cooperates fully and timely, there is a presumption of declination of prosecution.  However, there is an exception – the presumption will not apply if there are aggravating circumstances that warrant a criminal investigation, Continue Reading Battling Government Investigations Series – Cooperation and Voluntary Disclosure

It always comes when you least expect it – a government inquiry to investigate your business. While it may instill a sense of panic, there are steps you can take to make sure you’re in the best position possible when the investigation begins.

This blog series by Chrysty Esperanza, Litigation Counsel at Square, Inc., will address this main question: When you receive a subpoena, CID, or informal request from the government, how should you respond?


When Civil and Criminal Investigations Collide

Civil and criminal investigations are not as separate as you may think, and it is quite possible they may blend together.  While an internal investigation may be launched in response to a civil request from a government agency, the degree of cooperation between civil and criminal government agencies means an open civil investigation can easily trigger a criminal inquiry. When parallel civil and criminal investigations occur jointly, the government agencies may share the work and information from their respective investigations.  For example, a subpoena from the Securities and Exchange Commission (SEC) will always note that information discovered during the investigation can be shared with multiple agencies, like the Department of Justice (DOJ).  Continue Reading Battling Government Investigations Series – Civil and Criminal Investigations

It always comes when you least expect it – a government inquiry to investigate your business. While it may instill a sense of panic, there are steps you can take to make sure you’re in the best position possible when the investigation begins.

This blog series developed by Chrysty Esperanza, Litigation Counsel at Square, Inc., will address this main question: When you receive a subpoena, CID, or informal request from the government, how should you respond?


How do you find the right lawyer to conduct an internal investigation?

When an issue arises that requires an internal investigation, determining who handles the investigation may have a significant impact on the investigation itself. There are basically two options:  use in-house resources or hire outside counsel.  Usually, it is preferable to hire outside counsel, especially where the issues being investigated are serious or involve concerns as to management integrity.  Doing so conveys to the government that you are taking the investigation seriously.  Engaging outside counsel also provides more credibility where senior management are being asked to provide information, and demonstrates your appreciation and understanding of the complexity of the investigation.  It also conveys to senior management internally the seriousness of the matter.  In addition, outside counsel can provide a fresh and objective perspective on your internal practices and may even provide an opportunity to benchmark your business with industry standards and best practices of other companies. Continue Reading Battling Government Investigation Series – Find the Right Lawyer

globe with digital overlayThe fight over whether the government may access the data of companies and individuals that is stored overseas has officially made its way to the U.S. Supreme Court. On October 16, the Supreme Court agreed to review the Second Circuit’s decision in Matter of Warrant to Search a Certain E-Mail Account Controlled & Maintained by Microsoft Corp., 829 F.3d 197, 203 (2d Cir. 2016). The grant of certiorari was a win for the Department of Justice. As we previously reported, the Second Circuit had held that the government could not compel production of Microsoft’s email account data stored in Dublin, Ireland because warrants traditionally may only be enforced domestically under the Stored Communication Act. While there is much speculation about which way the Court may rule, the consensus appears to be that its decision could significantly impact the government’s search and seizure power under the Fourth Amendment. It is also conceivable that the ruling could pave the way for broader discovery in the civil context, allowing parties to subpoena or otherwise request documents stored abroad in the course of civil litigation.

Meanwhile, there are identical legislative proposals (International Communications Privacy Act of 2017 (ICPA)) that have been introduced in both the Senate and House of Representatives addressing the privacy of internationally stored data. The ICPA would allow the government to obtain with a warrant the electronic communications of U.S. citizens and permanent residents, regardless of where the individuals or communications are located, from service providers. The proposals have received broad support, including from Microsoft, which has stated that the proposed law “updates antiquated data laws to better meet the needs of law enforcement, while protecting people’s privacy rights.”

We will continue to monitor these proceedings, which could have a major impact on our clients.

globe with digital overlayA dispute in California federal court over whether Google must turn over documents stored overseas in response to a search warrant may have major implications for white collar practitioners and their clients. Last week Google asked a California federal judge to review an order by Magistrate Judge Laurel Beeler that required the company to produce content stored outside the United States in response to a warrant. U.S. District Judge William Alsup will hear Google’s motion for de novo review of the order on June 22. In the order at issue, Judge Beeler denied Google’s motion to quash a warrant issued pursuant to the Stored Communications Act (SCA), 18 U.S.C. § 2703. The SCA, in part, requires the disclosure of customer communications or records by internet service providers pursuant to a warrant. The warrant sought documents related to specific Google email accounts, including subscriber information, evidence of specified crimes, and information about the account holders’ true identities, locations, and assets. Google produced information it stored domestically, but argued that the warrant could not reach information stored abroad. Google argued that its legal team in the United States were the only personnel authorized to access and produce the communications, which could be accessed from within the United States. Matter of Search of Content that is Stored at Premises Controlled by Google, No. 16-MC-80263-LB, 2017 WL 1487625, at *2 (N.D. Cal. Apr. 25, 2017). Continue Reading Blurring The Line Between Foreign and Domestic: The Expansion of Search Warrant Powers Overseas

Blog-Image---DataSecurityIn 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

people in meeting

In the present uncertain legal and regulatory environment, the role of shareholder activists in scrutinizing corporate behavior seems to be gaining steam. See, e.g., An Activist Investment in Whole Foods Exposes Shifting Power on Wall St. We are increasingly seeing corporate internal investigations being influenced, if not driven by, the presence of activists on the Board. It remains to be seen whether the role of activists in policing corporate governance and other corporate regulatory issues will continue to increase in an environment where SEC Enforcement is increasingly under pressure (budgetary and otherwise) from the current presidential administration.

SEC magnifying glassRamapo, New York Town Supervisor Christopher St. Lawrence heads to trial this week on federal securities fraud charges. St. Lawrence is one of two city officials charged in the case; his codefendant N. Aaron Troodler pleaded guilty earlier last month. The SDNY U.S. Attorney’s Office promoted the Troodler conviction as the first time municipal bond fraud has been successfully prosecuted under federal securities laws. The St. Lawrence trial is expected to draw lots of attention; St. Lawrence is an elected official who has spent nearly two decades at the helm of his town. Continue Reading Municipal Bond Securities Fraud Case Heads to Trial

people talking at courthouseRecent corporate guilty pleas can be expected to have serious implications for the individual executives and employees alleged to have been involved in the conduct under scrutiny. But there are other factors at play in such cases that can make even more of a difference to the eventual outcomes for individuals than whether their corporate employer pleads guilty or pursues an alternative resolution. Key among these is the extent to which a cooperative relationship can be established between company counsel and individual counsel despite accusations of individual wrongdoing.

Read more in our article posted on Law360: Individual Defense in the Shadow of Corporate Guilty Pleas.

Blog-Image---TechnologyAfter 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