Further, a company typically not eligible for leniency under the Corporate Leniency Program (which requires a company to provide the government with critical information about the price-fixing conspiracy, i.e., whistleblowing) may now be able to obtain a deferred prosecution agreement, provided that it has in place a strong compliance program.
The previous iteration of the Division’s longstanding policy, as published in the Department of Justice Manual, provided that: 1) “credit should not be given at the charging stage for a compliance program” and 2) “the nature of some crimes, e.g., antitrust violations, may be such that national law enforcement policies mandate prosecution of corporations notwithstanding the existence of a compliance program.” In its revised version of the Department of Justice Manual, credit for compliance programs may now be granted during the charging stage.
By implementing these types of policies, companies are better equipped at detecting and/or avoiding criminal antitrust violations, potentially garnering leniency under the Division’s Corporate Leniency policy. Robust compliance policies may now, under these changes, further shield companies from liability and the very large cost of litigation of antitrust matters
Seyfarth Shaw’s Antitrust team is able to assist corporations with creating, administering, and reviewing antitrust compliance programs, as well as criminal investigations.
The content of this article is intended to provide a general guide to the subject matter.
BitMEX solicited and sold swaps, futures options and futures contracts and derivatives in digital currencies through their online platform, without being registered to sell such financial products, and further, that it did not have anti-money laundering procedures in place to protect the financial system.
The CFTC alleges, for example, that BitMEX altered on-boarding records of a US resident to “Canada” in order to have records that did not reflect the on-boarding of US residents, and that it was searching for a “favourable jurisdiction” to operate from (Isle of Man, Jersey and Gibraltar (typically used by illegal online gambling websites)).
BitMEX corporate entities HDR Global Trading Limited, 100x Holdings Limited, ABS Global Trading Limited, Shine Effort Inc, Limited, and HDR Global Services (Bermuda) Limited, were named as defendants in the CFTC filing.
DOJ’s view, “effectively remediated at the time of the resolution.” Companies also are expected to pay all disgorgement, forfeiture, and restitution resulting from the misconduct at issue in order to benefit from the Policy.
The Policy also describes examples of “aggravating circumstances” that may preclude a presumption of declination, including if the company is a repeat offender, “involvement by executive management of the company in the misconduct,” “a significant profit to the company from the misconduct,” and “pervasiveness of the misconduct within the company.” Of course, similar to the assessment described above, these terms are subject to the prosecutor’s assessment of the particular case.
A bug in Wormhole, a bridge that connects Solana to Ethereum, was exploited to steal $325M worth of Ether. Wormhole was supposed to work by wrapping Ether into wETH on Ethereum and then issuing equivalent amount of wETH on Solana.
The Wormhole bug was discovered in mid-January and a patch was released, but the hack happened on February 2, before it could be deployed.
This hack meant that wETH without Ether collateral was available on Solana, and there were concerns about the impact on other DeFi, but on the following day, February 3, Wormhole’s major shareholder Jump Capital announced that it would cover all 120,000 Ether, and the case was settled.
■U.S. Department of Justice recovers $3.6B worth of bitcoins stolen in Bitfinex hack
The 2016 hack of the Bitfinex exchange resulted in the loss of 119,754 BTC.
The Antitrust Division published a guidance document designed to help prosecutors in evaluating compliance programs. Within the sentencing guidelines, the Division notes that antitrust compliance programs may: 1) allow for the Division to grant a three-point reduction in culpability if the program is “effective”; 2) help determine corporate fines; and 3) help determine the Division’s probation recommendations.
While the Division acknowledged that there was no “formulaic” approach to evaluating corporate compliance programs, it nevertheless asked prosecutors to consider three questions:
- Is the company’s compliance program well designed?
- Is the program being applied earnestly and in good faith?
- Does the company’s compliance program work?
Companies should consider these three basic questions in designing and rolling out their compliance programs.
Act context in assessing whether a company’s self-reporting and remediation measures may justify declination.
During a presentation at the American Bar Association’s (ABA’s) White Collar Conference on March 1, John Cronan, acting assistant attorney general of the US Department of Justice’s (DOJ’s) Criminal Division, and Benjamin Singer, chief of the DOJ Fraud Section’s Securities and Financial Fraud Unit, conveyed DOJ’s intention to “reward self-disclosure, full cooperation, [and] timely and appropriate remediation” by declining to bring cases against companies investigated for criminal violations other than the Foreign Corrupt Practices Act (FCPA).
This announcement reflects an expanded application of DOJ’s FCPA Corporate Enforcement Policy (the Policy) beyond violations of the FCPA.1 But unlike the aspects of the Policy formalized in November 2017, Messrs.
The total amount of damage was $71M at the time, which is $4-5B in current value.
The Department of Justice announced on February 8 that $3.6B of this amount had been recovered, and a couple in their 30s living in the U.S. were arrested. The private keys were apparently in a file in the cloud (but encrypted).
The couple had thousands of addresses and accounts on several exchanges, as well as Walmart gift cards and PlayStation consoles, for laundering purposes.
In addition, the wife of the arrested couple uploaded rap music on YouTube under the name of Razzlekhan, which became the talk of the town as she was called a cringe rapper for her terrible music.
The agencies must also plan training for their agents to use the cameras.
“I am proud of the job performed by the Department’s law-enforcement agents, and I am confident that these policies will continue to engender the trust and confidence of the American people in the work of the Department of Justice,” Monaco said in the memo.
Federal agents had not been required to wear body cameras, with some arguing federal investigations were too sensitive to have footage recorded, the Journal noted.
The new policy will most likely only apply to the execution of arrest and search warrants, the newspaper added.
Body cameras for police have become increasingly popular as calls for police reform have rung across the country since the death of George Floyd on Minneapolis.
Millions of dollars went toward upgrading body cameras for U.S.
In contrast to the response of the bank that received a letter of declination, the other bank allegedly failed to voluntarily disclose the misconduct to DOJ, and did not fully cooperate with the investigation at its outset. These initial failings outweighed the penalized bank’s later remedial measures, which appears consistent with Acting AAG Cronan’s comment that a company should “quickly raise its hand” upon discovering corporate misconduct.
Without being formalized in the USAM, this new application of the Policy outside the FCPA context lacks the formality Deputy Attorney General Rod Rosenstein now appears to require (he recently noted that DOJ needs to “clearly distinguish binding policies from commentary”).
Notably, DAG Rosenstein emphasized during his March 2 speech the importance of corporate compliance efforts—including self-disclosure and risk mitigation—and that companies should be rewarded when they have strong, effective compliance programs that are incorporated into corporate culture.
Although Messrs. Cronan and Singer were careful to limit their comments to their experience in DOJ’s Criminal Division, it appears that DOJ may consult the Policy for guidance outside of the FCPA context in assessing whether a company’s self-reporting and remediation measures may justify declination.
At this juncture, however, the Policy’s application outside of the FCPA context has not been formalized in the USAM, and its application is subject to considerable uncertainty and prosecutorial discretion.