Welcome to Compliance Hot Spots, our snapshot on white-collar, regulatory and compliance news and trends. As we await the US Supreme Court's ruling on the CFPB, we look at a few pending big enforcement actions in trial courts. Plus: career advice from Jonathan Kravis, the former Roger Stone prosecutor who resigned over the Justice Department's handling of the longtime Trump ally's sentencing. Scroll down for more headlines and Who Got the Work.

Thanks for reading, and we'd love your feedback. Contact C. Ryan Barber in Washington at [email protected] and at 202-828-0315. Follow @cryanbarber.

A Lively Week for CFPB Litigation

With the U.S. Supreme Court term nearing its June close, the justices are due any day now to rule on the constitutionality of the Consumer Financial Protection Bureau's independent, single-director design—an issue that has bedeviled the agency throughout its decade-long existence.

Meanwhile, in trial courts across the country, banks and other companies have continued defending themselves against the CFPB, even as the agency's Trump-appointed leadership has eased enforcement. In recent weeks, as the coronavirus has complicated court cases and upended everyday life, some of the CFPB's highest-profile enforcement actions have featured some notable developments.

>>> In what is widely considered the CFPB's most prominent pending case, Navient Corp. is pressing to shake claims filed in January 2017, just days before President Donald Trump's inauguration, alleging that the student loan management company systematically failed borrowers.

Navient's defense team at Wilmer Cutler Pickering Hale and Dorr argued the CFPB has been unable to prove its "central claim" after years of investigation: That the company steered student loan borrowers toward taking a short break from payments, known as "forbearance," without adequately informing them of income-driven repayment options.

Under the CFPB's "entirely invented" theory, Navient argued, any call with a borrower was unlawful if the company representative did not run through an "elaborate matrix of CFPB-prescribed questions and answers before granting a request for forbearance benefits."

In a prepared statement, Navient's chief legal officer, Mark Heleen, said every borrower identified by the CFPB was informed about income-driven repayment options.

"After a more than three-year court process, after making grand headline-grabbing allegations, after spending days and days deposing Navient borrowers, current and former employees, and after receiving more than a million documents and terabytes of data, the CFPB lacks the evidence to support its claims," Heleen said.

>>> In a newer enforcement action, filed in March against Fifth Third Bank, the CFPB recently resisted a push by the bank's Williams & Connolly defense team to move the case from Chicago to Cincinnati.

While the bank is based in Cincinnati, the CFPB said Chicago has "greater ties" to the bureau's claims that Fifth Third opened accounts and enrolled customers in services without proper consent.

"Unfortunately for Chicagoans, Fifth Third's unlawful acts and practices were more prevalent in this district than elsewhere; Chicago has been a hotbed of unscrupulous conduct by Fifth Third's employees—conduct that the bank caused with its toxic sales culture and failed to timely and adequately address," the CFPB said.

CFPB enforcement attorneys said the Windy City had another advantage over other venues: It is the only place where the bureau and bank both have "an office and appearing counsel."

>>> A federal judge in Florida last week granted the CFPB's request to have its case against the mortgage servicing giant Ocwen Corp. combined with a separate lawsuit filed by the state's attorney general.

U.S. District Judge Kenneth Marra had previously consolidated the cases for discovery but held off on combining them for trial, saying such a move would be premature. His decision Thursday to hear the CFPB and Florida attorney general's claims in a single trial came over the objection of Ocwen, which was accused in April 2017 of mishandling mortgages, in some cases illegally foreclosing on struggling borrowers.

Ocwen—represented by lawyers from Greenberg Traurig, Buckley LLP and Goodwin Procter—said it would be overly burdened responding to the CFPB's and Florida attorney general's claims in the same trial.

Marra, in a seven-page opinion, said combining the two enforcement actions "into a single trial would substantially reduce the length of time and relative expense for all the parties and is in the interest of judicial economy."

Who Got the Work

>> Veteran trial lawyer Beth Wilkinson (above) is helping guide U.S. District Judge Emmet Sullivan as a federal appeals court questions his plan to probe the U.S. Justice Department's decision to dismiss the case against former Trump national security adviser Michael Flynn despite his admission he lied to the FBI.

>> Paul V. Kelly, who leads the white-collar practice at Jackson Lewis, is representing Michael Taylor, a former Green Beret who along with his son was arrested on suspicion of helping the former auto titan Carlos Ghosn flee from Japan last year as he awaited trial. Taylor and his son, Peter Taylor, are facing an extradition request from Japan, which has accused the duo of hiding Ghosn in a musical equipment box and spiriting him out of the country on a private jet. Kelly told the Associated Press: "Michael Taylor is a distinguished veteran and patriot, and both he and his son deserve a full and fair hearing regarding these issues."

>> Baker Botts partner Scott Keller is representing Freedom Path Inc. in a new suit against the IRS filed last week in U.S. District Court for the District of Columbia. The IRS "facts and circumstances test," Keller wrote, "causes nonprofit organizations such as Freedom Path to limit their associations and self-censor their public communications."

Compliance Reading Corner

Prosecutors Face Constitutional Hurdle Investigating US Senator's Stock Trades. "The Constitution creates a shield for lawmakers that makes many legislative activities and information connected to their position off-limits for investigators. Even accessing evidence about a potential crime related to a lawmaker's legislative work is complicated." Latham's Alice Fisher (above) is counsel to U.S. Sen. Richard Burr of North Carolina, facing questions about stock sales ahead of markets taking during the pandemic. [CNN] More here at The New York Times: Justice Dept. Ends Inquiries Into 3 Senators' Stock Trades

Compliance Layoffs, Budget Cuts Raise Prospect of Looser Internal Oversight. "Corporate compliance departments are finding themselves in the crosshairs of corporate cost-cutters, raising concerns about the potential for mistakes or misbehavior to go undetected. Layoffs and furloughs in compliance departments have arrived in sectors hardest hit by the coronavirus pandemic, according to consultants, researchers and compliance officers. Companies less affected by the downturn are trimming compliance-related expenses or making preparations for possible budget cuts. Some are choosing not to fill open positions or delaying planned investments in technology." [WSJ]

Ex-Stone Prosecutor Jonathan Kravis' Career Advice: 'Stay True to the Principles That Led You to Serve'. "If you do decide to pursue government service—and I hope that you will—stay true to the principles that led you to serve. For me, that principle was our nation's commitment to equal justice under law, the idea that the government makes decisions in criminal cases based on facts and law, not on the defendant's power or wealth or political connections," former prosecutor Jonathan Kravis said. [NLJ]

Philadelphia US Attorney Ramps Up Prosecutions Against Lawyers. ""I find these cases professionally offensive," said U.S. Attorney William McSwain of the Eastern District of Pennsylvania. "They're damaging to our profession. When you have lawyers taking advantage of people, especially their own clients, that is really reprehensible conduct." [The Legal Intelligencer]

Most Publicly Listed Companies Keep U.S. Small-Business Aid Loans. "More than four-fifths of publicly listed companies that received emergency small-business loans from the U.S. government have held onto them, sticking with a certification that they need the money, according to data from market research firm FactSquared. Companies that should not have applied for the loans because they had enough resources to get by on their own had until May 18 to return the money without facing any sanctions." [Reuters]

Shelter-in-Place Orders Pose Challenges for Government Probes. "Some investigative activities, including ones requiring travel or face-to-face meetings, are taking more time, and that could raise concerns for time-sensitive cases, said Daniel Kahn, a senior deputy chief in the U.S. Department of Justice's criminal fraud section. 'The most difficult part of this is doing in-person interviews,' Mr. Kahn said Wednesday during an online panel hosted by the American Conference Institute. He added that getting documents from overseas also is proving more difficult than usual. 'For the most part we are finding ways to do that,' he said. 'It just sometimes can be a little bit slower.'" [WSJ]

The 'Bridgegate' Ruling Has Implications for Covid-19 Fraud. "The U.S. Supreme Court's recent ruling tossing the convictions in the "Bridgegate" scandal adds to a line of high court decisions narrowing the reach of federal corruption laws, writes Jones Day partner Yaakov Roth, who argued the case for one of the defendants. He says the ruling is especially timely given the vast government spending in response to Covid-19 and the inevitable allegations of fraud that may lead prosecutors to overreach." [Bloomberg Law]

S&P Fired Employee Who Discussed Ratings With Senate Staff. "[Andrew] Park filed his wrongful-termination complaint against S&P under the federal government's whistleblower laws, saying he was retaliated against for giving information to the Senate staffers." S&P said it would "vigorously defend against all claims." [WSJ]

Trump Ouster of Inspectors General Threatens Coronavirus Stimulus Watchdog. "President Donald Trump's purge of several internal watchdogs at U.S. agencies could hobble anti-fraud oversight for the $3 trillion in federal relief measures aiding businesses, state governments and others hit hard by the coronavirus pandemic." [Reuters] More here at the WSJ: Trump Moves to Make Own Picks for Oversight Posts. And here at the NYT: Flouting Norms, Trump Seeks to Bring Independent Watchdogs to Heel

Justice Dept. Unit That Prosecuted Roger Stone Is Reorganized. "Law enforcement officials had discussed an overhaul of the unit for years, but it was not clear why Mr. Shea implemented it when he seemed on the verge of leaving, according to half a dozen people briefed on the changes who would not be named discussing it for fear of retribution. Some lawyers in the office were said to express concern because he was moving prosecutors out of the public corruption unit." [NYT]

More Than 1,100 former U.S. Prosecutors Slam Attempt to Drop Flynn Charges. "More than 1,100 former U.S. federal prosecutors on Wednesday blasted the attempt by Republican President Donald Trump's Justice Department to dismiss a charge against former national security adviser Michael Flynn, saying the move puts Trump's personal interests ahead of the public good. The criticism came in a legal brief the nonprofit The Protect Democracy Project plans to file in federal court in Washington." [Reuters] Read the filing.

Notable Moves & More

>> Boeing's named Uma Amuluru as its chief compliance officer. The aerospace company said last month "that it would combine its legal and compliance functions and enhance its ethics program," Reuters reports. Amuluru reports to Boeing chief legal officer Brett Gerry, who oversees global compliance. Amuluru is a former Kirkland & Ellis partner, federal prosecutor and Obama White House lawyer. My colleague Dan Clark has more here at Law.com.

>> DLA Piper said Andrew Young has joined the firm in Washington as a finance and energy partner. Young arrives from Mayer Brown.