Welcome to Compliance Hot Spots, and good evening from Washington. We've got a snapshot from some SEC and DOJ leadership remarks on enforcement. Plus: firms are snapping up former government officials with national security experience; Amazon's lawyers take a dig at Trump; Ericsson settles FCPA claims; and Jessie Liu, serving now as D.C.'s top federal prosecutor, gets the nod for a key sanctions post at Treasury. Scroll down for Who Got the Work, and more notable announcements.

Tips, feedback and general thoughts on your practices are always appreciated. I'm C. Ryan Barber—reach me at [email protected] and 202-828-0315, or follow me on Twitter @cryanbarber.

Fear of SEC Fine Holding Up That Self-Report to DOJ? It Shouldn't, Feds Say

In recent years, the U.S. Justice Department has promoted a corporate enforcement policy with the goal of clarifying how federal prosecutors might handle a company's voluntary disclosure of misconduct.

The policy amounts to a fairly large carrot, meant to entice companies to come forward and cooperate—all in the hopes of having the Justice Department decline to bring criminal charges and instead reach a more merciful settlement.

But at the SEC, often a partner with the Justice Department in cracking down on foreign bribery and other corporate misconduct, there is no similar policy for granting leniency. White-collar defense lawyers say the uncertainty over the SEC's approach can complicate decisions to voluntarily come forward to the Justice Department.

At a recent conference, top enforcement officials at the two agencies were asked about that potential hold-up. Their response: It's not that complicated.

"The consequences of being the subject of an SEC enforcement action are dramatically different than they are being subject to criminal prosecution, and I don't think, for most companies, the calculus tips against self-reporting if you're trying to take advantage of that program," said Steve Peikin, the SEC's co-director of enforcement.

Peikin said whistleblowers have been "transformative," crediting them not only with providing "incredibly high-quality information" but also with changing "the calculus in terms of the thinking of companies and defense counsel about the costs and benefits of self-reporting."

Companies that opt against self-reporting misconduct, he said, "have to assume a good chance there's a whistleblower who will do it for you."

Dan Kahn, a senior chief in the Justice Department's fraud section, said the increasing role of corporate insiders and other whistleblowers in federal investigations has changed the calculation for companies. Noting also the "increased investigative efforts" and resources being devoted to rooting out corruption, Kahn said companies take a considerable risk in concealing misconduct.

The question, he said, is between "disclosing and having a declination with disgorgement from the [Justice Department] or having a much more significant criminal resolution with the DOJ."

With Data as National Security Threat, Big Law's Appetite for Government Officials Grows

As private companies grapple with the implications of collecting consumer data, and experience increasing government scrutiny over the national security concerns related to these practices, a niche practice area has emerged and grown in popularity among Big Law firms, our colleague Xiumei Dong reports at Law.com.

Several large firms have brought on lawyers with national security backgrounds and related expertise from federal government agencies, including the White House and the U.S. Department of Justice.

In addition to the traditional Big Law employers in the Capitol, a few firms based elsewhere, including O'Melveny & Myers, Gibson, Dunn & Crutcher, and Morrison & Foerster, have also been competing to recruit talent with a national security focus, especially lawyers with expertise in government enforcement and fluency in the ever-evolving issues surrounding cybersecurity and data privacy.

"The government, in general, has become more concerned in the last couple of years about the data [companies are collecting] and data usage. And so those national security concerns are coming to the fore," said John Dermody, a former official with the National Security Council and U.S. Department of Homeland Security who just joined O'Melveny & Myers' Washington, D.C., office in September as counsel.

Alexander Southwell, a former federal prosecutor and co-chairman of Gibson Dunn's privacy, cybersecurity and consumer protection practice group, said there is no substitute for government experience, especially when one has responsibility over national security investigations.

"It means that you have connections with national security regulators and criminal investigative authorities and you have experience with these issues, which can be highly technical and can be complicated," Southwell said.

Compliance Headlines: What We're Reading

Amazon Accuses Trump of 'Undue Influence' in $10B Cloud Contract. Newly unsealed court papers in Amazon.com Inc.'s blockbuster suit against the U.S. Defense Department accused President Donald Trump and others of "undue influence" as contributing to the technology company losing a $10 billion cloud-computing contract to rival Microsoft Corp. Amazon is represented by teams from Morrison & Foerster and Gibson, Dunn & Crutcher. MoFo's Kevin Mullen is counsel of record. [Law.com]

Ericsson Is Counting on Laurie Waddy to Fix Compliance Woes. The Swedish telecom Ericsson appears to have placed the company's fate in the hands of recently hired chief compliance officer Laurie Waddy along with chief legal officer Xavier Dedullen. The two attorneys were the only company employees named as authorized individuals last week in documents that were part of Ericsson's billion-dollar deferred prosecution agreement with the U.S. Department of Justice. [Law.com]

Global Financial Watchdogs Take Aim at Big Tech's Data Dominance. "Google, Alibaba and other "Big Tech" companies could be forced to share data on financial services customers with banks and financial technology firms to prevent unfair competition." [Reuters]

A Fine Line Between 'Educating' and 'Scaring' the Public: FTC Eyes Attorney Ads on Pharma. From my colleague Max Mitchell in Philly: A 2017 survey from the public opinion research firm Public Opinion Strategies found that nearly three-quarters of Americans had seen TV ads by attorneys warning about the dangers of certain pharmaceuticals. It turns out, the Federal Trade Commission has watched these ads too, and it doesn't always like what it sees. Letters recently obtained by ALM show that several law firms and legal marketers across the country received warning letters in September over TV ads they were airing about allegedly dangerous medications that are now the subject of mass tort litigation. [Law.com]

HSBC Swiss Unit to Pay $192M in Latest U.S. Tax Evasion Deal. "The Swiss private banking unit of HSBC Holdings Plc will pay $192.4 million to resolve a U.S. probe of its role in helping wealthy Americans evade taxes by using undeclared Swiss bank accounts, the U.S. Department of Justice said on Tuesday." [Reuters] Read the DOJ's statement here, and read more here at Daily Business Review.

Who Got the Work

>> Simpson Thacher & Bartlett partner Cheryl Scarboro was a lead defender representing Ericsson AB in its decision to to pay more than $1 billion to resolve claims that the Swedish telecommunications company paid bribes between 2000 and 2017 to build business in Asia, Africa and the Middle East. The settlement came three months after the Stockholm-based Ericsson said it had set aside $1.2 billion to cover anticipated U.S. penalties. Scarboro is a Washington-based Simpson Thacher partner and formerly the first chief of the SEC's FCPA unit.

>> Colleen Mahoney (at left), a partner at Skadden, Arps, Slate, Meagher & Flom, advised brand-management firm Iconix Brand Grand Group in a $5.5 million settlement resolving accounting fraud claims. The SEC said the sum reflected the company's "cooperation and remediation efforts." The SEC accused Iconix and three former executives with fraud in connection with an alleged scheme to report fictitious revenue, allowing two of the former executives to sell stock in the company for a substantial profit. Iconix's former CEO, Neil Cole, is fighting the SEC's claims and has hired Paul Weiss partner Lorin Reisner as his defense counsel. The company's former chief operating officer, Seth Horowitz, represented by Mark Cahn at Wilmer Cutler Pickering Hale and Dorr, pleaded guilty to fraud charges brought by federal prosecutors in Manhattan.

>> Jones Day, representing the Chinese telecom giant Huawei, has filed a petition for review challenging the Federal Communications Commission's designation of the company as a national security threat. The team includes veteran appellate partner Shay Dvoretzky.

>> A team from BakerHostetler—including Jonathan Barr, Jonathan New, Jonathan Forman and Kendall Wangsgard—advised former U.S. Rep. Chris Collins in settling an SEC insider-trading case. Collins and his son pleaded guilty earlier to related criminal charges. In the SEC settlement, Christopher Collins is barred from serving as an officer or director of a public company.

>> Latham & Watkins partner Sean Berkowitz is defending William Eric Meek, a former executive at the Indian-based trucking company Celadon Group Inc., against accounting fraud charges stemming from an alleged scheme to inflate the firm's income. Akerman partner Sergio Acosta, a leader of the firm's white-collar defense practice, is defending a second former executive, Bobby Peavler, against similar charges from the SEC.

>> DLA Piper's Jason Lewis advised a Colorado-based stock promoter, Jeff Friedland, as he resolved claims that he fraudulently promoted a cannabis company. The SEC alleged that Friedland misrepresented his own interest in the cannabis company, OWC Pharmaceutical Research Corp, as he touted its stock. Under the settlement, Friedland and his company Global Corporate Strategies agreed to give up $2.1 million in ill-gotten gains. Friedland will also pay a $2 million penalty.

Notable Moves & More

• Jessie Liu (above), now serving as the U.S. attorney for the District of Columbia, will be the Trump administration's nominee for Under Secretary for Terrorism and Financial Crimes at the Department of the Treasury, the White House said Tuesday evening. Liu, formerly a partner at Morrison & Foerster and Jenner & Block, would succeed Sigal Mandelker, who is leaving for the private sector. Earlier this year, Liu withdrew from consideration as the nominee for associate U.S. attorney general—the No. 3 post at Main Justice—amid criticism from some Republicans about her ties to a legal group that opposed Samuel Alito's nomination to the Supreme Court. Liu had said she was not involved in putting together the opposition letter.

• Christopher Cestaro has been named chief of the Justice Department's FCPA unit, months after taking on the role in an acting capacity. The Justice Department announced the move Thursday to prosecutors in the fraud section of the criminal division. A day earlier, Assistant Attorney General Brian Benczkowski suggested that Cestaro would remain the unit's leader for the foreseeable future, saying at a conference in the Washington area that he was "confident that the FCPA Unit will continue to thrive under his excellent leadership."

• Steptoe & Johnson LLP has hired Wendy Wysong (at left) to spearhead the launch of a Hong Kong office, the firm's second in Asia. Wysong, who will maintain an office in Washington, formerly was a partner at Clifford Chance for more than a decade. She led the firm's Asia Pacific anti-corruption and trade controls practice. Steptoe said former Clifford Chance regulatory specialist Ali Burney would join the firm as partner and relocate from Singapore to join Wysong. More here from my colleague John Kang.

• Dentons has added a compliance partner in Duesseldorf, once again expanding its operations in Germany. Ann-Kristin Cahnbley joins the firm from Clifford Chance, where she worked for eight years, most recently as a senior associate. She will advise clients in the healthcare and industrial sectors on criminal law and regulatory risk, my colleague Simon Taylor reports.

• "Thomas G. Ward, a Trump administration Justice Department appointee, is a lead candidate to be the CFPB's new enforcement director, according to multiple sources familiar with the matter," Bloomberg Law reports. Ward was a longtime Williams & Connolly partner when he jumped to the Trump DOJ in 2017. He reported earning between $1 million and $5 million in law firm partner income on a financial disclosure form.

• Greenberg Traurig has hired Ben Greenberg, a former U.S. attorney for the Southern District of Florida, as a white-collar litigation partner in Miami.

• Kathleen Benway, a former chief of consumer protection at the Federal Trade Commission, has left Wilkinson Barker Knauer to become a partner at Alston & Bird. "Businesses today face unprecedented uncertainty about the rules that govern the flow of personal information," said Kristy Brown, a co-leader of Alston & Bird's litigation group. "Kathleen is a superb attorney whose frontline experience at the highest levels of the FTC will benefit our clients by giving them a window into how the agency approaches enforcement and litigation regarding privacy and data security, deceptive advertising, social media endorsements, and other hot-button consumer protection issues."