Happy New Year, and welcome back to Compliance Hot Spots. It's great to be back with you in 2019. Now that Democrats control the U.S. House, they're taking concerted steps—some quiet, others public—to position themselves to launch investigations into the Trump administration and the private sector. Scroll down for our Who Got the Work roundup on big SEC and DOJ cases. Also, we look at predictions for increased enforcement of foreign bribery in 2019, and we catch up on moves into and out of government.

As always thanks for reading—and please continue to send feedback. I appreciate hearing from you about what's on your plate—observations, trends, new clients. Contact me at [email protected] or 202-828-0315, and follow me on Twitter @cryanbarber.

 

House Dems Hunker Down For Investigations

 

With divided government offering dim hopes of passing legislation, House Democrats are positioning themselves to mount aggressive investigations into the Trump administration and private sector.

Tucked into the House Democrats' rule package, adopted late last week, was a provision making it easier for the House Oversight and Reform Committee's investigators to depose government officials and executives. As I reported on Friday, the new rules lifted a nearly decade-old requirement for at least one lawmaker to be present during committee depositions.

No big deal? In practice, that attendance requirement complicated House lawyers' efforts to undertake aggressive investigations while opening opportunities for defense lawyers to “monkey with the schedule,” as former House general counsel Thomas Hungar put it, and take advantage of periods in which lawmakers are out of town.

House lawyers will now have more leverage as they investigate the Trump administration and private sector. The pharmaceutical industry might want to be particularly worried. U.S. Rep. Elijah Cummings, chairman of the House Oversight and Reform Committee, has long sparred with the industry over drug prices and has signaled that his panel will probe not only government agencies but businesses, as well.

>> House Democrats aren't just posturing. They're hiring.

In interviews, lawyers experienced with congressional investigations said committees have been hunting specifically for litigation and investigative experience—another sign that depositions will be coming with Democrats in control of the House.

Wiley Rein partner Peter Hyun, the former chief counsel for U.S. Sen. Dianne Feinstein, said he was struck by a recent posting for a counsel position on the House Oversight and Reform Committee. The posting described the ideal candidate as having “several years of investigative or litigation experience” and said the committee counsel's responsibilities would include taking depositions and transcribed interviews.

“I do think it's a unique one for Hill jobs. Most Hill job postings—even for lawyers—specify you need prior Hill or policy experience. And that is to be expected, because Congress is a legislative, policy-making body,” Hyun said. “But the focus on litigation is typically reserved for those who fight in court. Here, requiring litigation experience for the Hill is interesting because you won't be litigating before a neutral court; but instead litigating in a hyper-political environment before the American people.”

>> More reading: Pelosi Picks Ex-DOJ Appellate Vet Douglas Letter as House General Counsel

 

Compliance Headlines: Emerging Regulatory Risks | What's In Store for the FCPA?

 

>> Shearman & Sterling partner Philip Urofsky, formerly an assistant chief of DOJ's fraud section overseeing FCPA probes, offers some predictions for the new year: “First the government has to get back to work, then we will probably see more cases in 2019 than in 2018. There are a lot stacked up in the cue. Prosecutors are not in favor of delays”

>> “One of the more unusual compliance pressure tactics of 2018 is likely to affect companies increasingly in the New Year in what attorney Brett Ingerman calls a collective 'consumer regulatory risk.'” Ingerman, who serves as co-chair of DLA Piper's global governance and compliance practice, told my colleague Sue Reisinger: “You won't see it in any survey, but I've had a number of conversations with chief compliance officers recently who are accounting for this new consumer regulatory risk.” Ingerman pointed to the #DeleteUber campaign, and how a group of Harvard Law students spearheaded campaigns against law firms employing mandatory arbitration provisions.

>> “For Wall Street banks and other companies accused of malfeasance, the risk of getting slapped with a big fine by the U.S. Securities and Exchange Commission will soon drop significantly,” Bloomberg reports.

>> Meanwhile, four cases show at the U.S. Justice Department and SEC show that insider trading remains a focus, the New York Times reports. Over at Law.com, my colleague Dan Clark has this report: SEC to Examine Cybersecurity, Digital Assets and Anti-Money Laundering Efforts in 2019.

>> “The Consumer Financial Protection Bureau has asked a federal judge in Wisconsin to impose nearly $82 million in penalties and restitution against four attorneys and a Wisconsin law firm that allegedly ran a mortgage debt relief scam,” Reuters reports.

 

Who Got the Work

 

>> Dan Webb (above), co-executive chairman of Winston & Strawn, is counsel to a Ukrainian oligarch named Dmitry Firtash, charged in Chicago with alleged foreign-bribery violations, according to The New York Times. Lanny Davis, formerly special counsel to President Bill Clinton, was also identified as a lawyer for Firtash.

>> “A federal appeals court in Manhattan declined to throw out former Goldman Sachs Group Inc. director Rajat Gupta's 2012 insider-trading conviction, upholding a lower-court ruling.” Read the Second Circuit's ruling here, and my colleague Colby Hamilton at Law.com has more on the decision here. Gary Naftalis of New York's Kramer Levin Naftalis & Frankel represented Gupta. Damian Williams was the lead AUSA for the Manhattan federal prosecutors' office.

>> Covington & Burling, representing the Massachusetts-based data solutions company Intelimap Inc., is suing the SEC in a new public-records complaint in Washington's federal trial court. The complaint, filed Tuesday by associate Kevin Barnett, seeks SEC communications with industry groups.

>> Skadden Arps partner David Meister represented Morgan Stanley in a $10 million settlement with FINRA for alleged anti-money laundering compliance violations.

>> CVS Health has hired a team from Akin Gump Strauss Hauer & Feld to lobby on tax issues. The Akin team includes Arshi Siddiqui, formerly senior policy advisor and counsel to U.S. Rep. Nancy Pelosi; Ed Pagano, former chief of staff to Sen. Patrick Leahy; and Zach Rudisill, tax counsel to Sen. Rob Portman, the Ohio Republican.

>> Foley & Lardner partner Rohan Virginkar, a former prosecutor in DOJ's FCPA unit, and Caz Hashemi, a Palo Alto-based partner at Wilson Sonsini, represented Plantronics in a Justice Department foreign-bribery investigation. DOJ closed its probe without criminal charges. The company agreed to pay $36 million to the SEC for its enforcement action.

>> JPMorgan has agreed to pay $135 million to resolve allegations it mishandled so-called American Depository Receipts—a type of U.S. security that represents foreign shares in overseas companies, according to Reuters. Daniel Perry at Milbank, Tweed, Hadley & McCloy LLP represented the company. The SEC claimed that JPMorgan offered ADRs to brokers even though the brokers and their clients lacked the corresponding foreign shares. Read the SEC's cease-and-desist letter here.

 

Notable Moves & Announcements

 

>> Jon Kyl, who briefly rejoined the U.S. Senate last year, has arrived back at Covington & Burling, the law firm where he made about $1.86 million in the last two years, according to newly public disclosure documents, my colleague Christine Simmons reports. Kyl on Monday rejoined Covington as senior counsel in its public policy practice.

>> New York Gov. Andrew Cuomo has nominated Linda Lacewell (pictured above), chief of staff to the governor, to succeed Maria Vullo as the superintendent of the state Department of Financial Services. Vullo will leave her position at the end of January. “I've been thinking about this for some time, but it's the natural time for me to leave,” Vullo told The New York Law Journal. “We've done so many great things. This is the right time, even though it will be difficult because the team here is so great, and it's been a great pleasure to serve the governor in this role.”

>> Laura Grossfield Birger, formerly a partner at Cooley LLP, has been named new criminal chief in the U.S. Attorney's Office for the Southern District of New York. “Laura was an outstanding AUSA during her prior tour in the office and is an accomplished criminal defense lawyer. I am confident that with her intellect, energy, vision and leadership, Laura will be a terrific Criminal Division chief,” U.S. Attorney Geoffrey Berman said in a statement.

>> David Walsh, former IBM assistant general counsel, has joined the Hogan Lovells office in Boston office as senior counsel in the antitrust, competition and economic regulation practice. “We are delighted that after years of working with him at IBM, David has decided to join our team,” said Hogan Lovells partner Edith Ramirez, a former Obama-era chairwoman of the Federal Trade Commission who's now co-head of the firm's antitrust practice. “His onboarding will strengthen our relationship with IBM, a long-time client, and also bolster our experience to clients in the technology industry.”

>> Frederic Krieger joins the regulatory firm Murphy & McGonigle from BMO Capital Markets, where he served as general counsel to the legacy broker-dealer KGS-Alpha Capital Markets.

>> Cooley hired former Federal Communications Commission enforcement chief Travis LeBlanc as a partner in its global cyber, data, privacy and telecommunications practices. LeBlanc, who'll be based in Washington and San Francisco, arrives from Boies Schiller Flexner.

>> Jonathan Gould was named senior deputy comptroller and chief counsel at the Office Of the Comptroller of the Currency. Gould formerly served as chief counsel to the U.S. Senate Committee on Banking, Housing, and Urban Affairs. His private-sector work included serving as deputy general counsel to Promontory Financial Group. Gould began his career in the law at Alston & Bird.

>> Former Consumer Product Safety Commission attorney Mike Gentine has joined Schiff Hardin's Washington office. Gentine most recently served as in-house regulatory counsel at Polaris Industries. He previously held positions at the CPSC and the U.S. Senate Judiciary Committee.

>> Daniel Kahl, a 17-year veteran of the U.S. Securities and Exchange Commission has been named deputy director of the commission's Office of Compliance Inspections and Examinations. Kahl had been the compliance office's chief counsel since February 2016.

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