Vedder Price

In addition to the keynote addresses, the conference featured panel discussions relating to building effective compliance programs, trends in health care fraud actions, enforcement efforts relating to cryptocurrency, negotiating settlements with the DOJ and SEC, and various other topics.  Highlights from these panel discussions include the following:

• Members of the SEC and DOJ addressed the agencies’ latest enforcement priorities.  The panelists noted that the government is continuing to focus on charging individuals with violations. In particular, they highlighted an increased attention to crypto as well as private funds. Additionally, the panelists discussed the DOJ’s desire to shorten the time between an individual’s misconduct and an arrest. Accordingly, the DOJ is investing more resources to move quickly on cases, especially in an effort to persuade cooperators to meet with the DOJ. The panelists also noted that the government will not hesitate to take cases to trial, as demonstrated by the DOJ obtaining over 340 convictions or guilty pleas from individuals in 2022, 56 of which were trial convictions. Finally, the panelists emphasized the importance of timely self-reporting for purposes of obtaining cooperation credit. They stated that if a company delays in self-reporting, the company will need to convincingly explain to prosecutors the rationale for the delay, such as pointing to a meaningful internal investigation.
• In a conversation with government regulators, panel members discussed a need to focus on compliance issues and move quickly, with a goal to achieve meaningful relief for investors and promote confidence in the market. The panel members noted that there will not be a slow-down in traditional cases such as insider trading, health care fraud, COVID-related fraud and tax fraud. However, the remarks indicated a new focus on emerging issues in the digital asset space, including market manipulation in the cryptocurrency area. The panel members discussed the clear need for harsher penalties as a future deterrence and issuing new policies to provide a level of transparency. 
• A panel of government attorneys discussed their continued focus on investigating crypto and other digital assets. While the panel members acknowledged the need to foster innovation, they emphasized that there will be an increased pursuit of wrongdoers who engage in fraud and unregistered offerings relating to digital assets. The SEC, DOJ, and CFTC noted their dedication to adding more resources to investigate and prosecute future violations, including by training more attorneys in this area, hiring in-house specialists, and increasing the use of data analytics to identify misconduct. 
• Senior Deputy Chief of the DOJ’s Fraud Section, Allan Medina, participated in a panel on health care fraud. Medina stated that the DOJ will continue to use data to identify target areas of concern. He stated that practitioners can expect an increased focus on telehealth, genetic testing and other novel health care issues that have arisen during the pandemic. Additionally, he stated that data trends show a need for increased scrutiny on sober homes and anemia treatments, utilizing the Eliminating Kickbacks in Recovery Act and other applicable statutes. Medina stated that when the DOJ considers whether an individual’s conduct rises to the level of criminality, it will focus on the economic realities behind the actions of an individual, not just what the documents show. Overall, practitioners can expect data-driven enforcement, particularly with novel issues driven by the pandemic.
• Another panel focused on how companies can work to meet the expectations of the DOJ and SEC when it comes to their compliance programs, indicating that a large part of meeting these expectations will involve continuously updating their compliance programs based on emerging risks. Both agencies also focused on the importance of construction, design, implementation, funding and consistency in compliance programs, along with what training, assessments and disciplinary actions a company is implementing. In response to concerns from corporations regarding the difficulties in perfecting compliance programs, the DOJ and SEC representatives stated that although the agencies recognize no program will prevent 100 percent of bad acts, companies should be able to demonstrate that their program is largely effective despite small, unforeseen gaps. 
• In discussing negotiations of corporate resolutions with the government, members of the DOJ and SEC noted that the “Filip Factors,” which the DOJ uses to guide corporate prosecutions, and the Seaboard Factors, which the SEC uses to evaluate cooperation by corporations, are substantially the same. However, they stated that the DOJ and SEC generally do not meet with defense counsel at the same time for purposes of settlement discussions and will go through their guidelines independently. The regulators noted that effective negotiating strategies for corporations include (1) focusing on a select few Filip/Seaboard Factors as opposed to trying to convince the regulators that every factor favors the corporation, (2) explaining actual (as opposed to speculative) collateral consequences of a particular resolution and (3) including a senior management official from the company (such as the general counsel or chief compliance officer) in the meetings who is prepared to answer questions and evaluate settlement proposals in real time.