Mandatory Disclosure

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On August 1, 2024, the US Department of Justice (DOJ) Criminal Division introduced its Corporate Whistleblower Awards Pilot Program (Program), which, like a modern-day Western posse, aims to bring justice to the wild frontier of corporate America. The DOJ is enticing anyone willing to saddle up and provide information on corporate outlaws—i.e., those involved in corruption, financial crimes, foreign corruption, bribery, and/or healthcare fraud. In sum, the Program closes the gaps left by existing whistleblower programs and bolsters the DOJ’s efforts to combat corporate crime. For those who decide to ride with it, the DOJ is promising substantial financial rewards—up to 30 percent of the loot recovered from those outlaws—to insiders, whistleblowers, and relators who come forward with information leading to significant criminal or civil forfeiture actions. As the Program unfolds over its three-year pilot period, it will—or should—be closely watched by False Claims Act defense counsel, plaintiff’s counsel, corporate leaders, and potential whistleblowers alike. If successful, it could permanently expand whistleblower incentives and further embolden an already aggressive DOJ (as if more encouragement were needed), signaling a new frontier in corporate governance and accountability in the United States.Continue Reading A New Frontier in Corporate Accountability: The DOJ’s Corporate Whistleblower Awards Pilot Program

In 2006, the documentary An Inconvenient Truth chronicled former Vice President Al Gore’s efforts to educate the public on the consequences of climate change. In the sixteen years since the Academy Award-winning film was released, public interest in the impact that greenhouse gas (GHG) emissions have had, are having, and will have on our planet has increased exponentially. Most recently, at the 27th U.N. Climate Conference (COP27), countries from around the globe came together to discuss the implementation of battle plans to combat climate change. One such plan, which was discussed at COP 27 by President Biden, is a new Proposed Rule that would require “significant” and “major” federal contractors to disclose their GHG emissions and climate-related financial risk as well as set science-based targets to reduce their GHG emissions. If and when the Proposed Rule is finalized, it will have seismic implications for contractors, in that it ties contractor responsibility (i.e., a contractor’s ability to receive federal awards) to compliance with these requirements.
Continue Reading An Inconvenient Requirement: New Proposed Rule Would Require Federal Contractors to Disclose Greenhouse Gas Emissions

Act Seeks to Cut Strings Between U.S. Small Businesses and China, Russia, and Other Countries of Concern

Small businesses that rely on the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs to fund their research and development projects were left on the edge of their seats this September as the reauthorization of those programs hung in the balance. Fortunately, on September 30, 2022—the date on which the programs were set to expire—President Biden signed the SBIR and STTR Extension Act of 2022 (the Act). The Act, which reauthorizes the SBIR and STTR programs until September 30, 2025, is the result of several months of protracted negotiations in which Congress questioned whether the programs provide enough protection against ties between China and other foreign countries of concern and program awardees. These concerns were amplified following reports that state-sponsored Chinese firms were targeting companies funded by the programs and, in some cases, that China was the true beneficiary of the awards, not the United States. This prompted intense scrutiny of the programs, which are intended to fund US startups and small businesses to stimulate technological innovation and meet federal research and development needs, and placed the reauthorization of these programs in jeopardy. Ultimately, however, Congress was able to reach an agreement to reauthorize the programs, but not without some major national security reforms to ensure that American intellectual property remains protected from foreign influence.Continue Reading SBIR/STTR Extension Act Preserves Innovation Programs, But Comes With a Bite

When entering a casino, professional gamblers understand that “the house doesn’t beat the player. It just gives him the opportunity to beat himself.” This axiom is precisely why in the long run casinos make money, while gamblers see their bank accounts dwindle. The same holds true in the corporate world with respect to the creation, implementation, and maintenance of compliance programs. A company gambling on its compliance obligations does so at its own peril and must understand exactly what the “House” expects. If it doesn’t, then that company may join the unfortunate few that roll the dice or spin the wheel and come up with snake eyes or double zeros. That risk is multiplied if the company betting on sufficient compliance is receiving federal dollars, where failure can lead to catastrophic civil and criminal liability. Fortunately, the United States Department of Justice (“DOJ”) has published its version of “House Rules” that it is supposed to consult when examining whether to investigate, prosecute, or settle criminal charges against a company. In this respect, DOJ prosecutors are tasked with looking at specific factors outlined in the “Principles of Federal Prosecution of Business Organizations” (“Principles”) section of the Justice Manual. Among other factors, these Principles instruct DOJ prosecutors to consider “the adequacy and effectiveness of the corporation’s compliance program at the time of the offense, as well as at the time of a charging decision.” In furtherance of this mandate, the DOJ’s Criminal Division issued revised guidance on June 1, 2020, regarding the specific factors DOJ prosecutors should consider in making that evaluation. This updated version of the DOJ’s “Evaluation of Corporate Compliance Programs” (Guidance) clarifies and modifies certain areas of the version last updated in April 2019. Among other noteworthy revisions, the Guidance underscores the need for companies to ensure their corporate compliance program is:
Continue Reading Gambling on Compliance? DOJ Updates the House Rules on Corporate Compliance Program Expectations