DOJ Releases New FCPA Guidelines, Will Enforce FCPA "Firmly but Fairly"

Head of Justice Department’s Criminal Division Matthew R. Galeotti Delivers Remarks at American Conference Institute Conference

Let me first say a few words about FCPA enforcement before I discuss in detail the Criminal Division’s policies, approach, and initiatives in the white-collar space.

The Deputy Attorney General sent me a memorandum, which he publicly released, detailing the new FCPA Enforcement Guidelines called for by the President’s Executive Order. These Guidelines provide evaluation criteria and a non-exhaustive list of factors to balance when deciding whether to pursue an FCPA case.

As detailed in the DAG’s memo, the factors include — but are not limited to — whether the alleged misconduct deprived specific and identifiable U.S. entities of fair access to compete; involves key infrastructure or assets; bears strong indicia of corrupt intent tied to particular individuals and serious misconduct; or is associated with the criminal operations of a Cartel or Transnational Criminal Organization. No one factor is necessary or dispositive. […]

Under the DAG’s leadership, the Department has reviewed FCPA matters, closing certain cases and proceeding with others by applying the criteria set forth in the Guidelines. With these Guidelines now in place, and consistent with the Executive Order, the Criminal Division will enforce the FCPA — firmly but fairly — by bringing enforcement actions against conduct that directly undermines U.S. national interests without losing sight of the burdens on American companies that operate globally.

SEC Pullback Leaves Crypto Enforcement to State, Private Suits

But while the crypto industry celebrates the SEC’s enforcement wind-down under Chairman Paul Atkins, the road ahead will likely be littered with an assortment of rules and enforcement actions from various parties. […]

No matter what path the SEC’s rule-writers take, crypto companies will still have to contend with suits from state regulators and private litigants, which securities lawyers say could become more frequent in the absence of SEC scrutiny.

Meanwhile, legislation winding through Congress would give the Commodity Futures Trading Commission jurisdiction to police crypto alongside the SEC, complicating an already fraught duality of enforcement approaches from the agencies.

The Class Action Bar’s Dirty Secret: Ghost Billing, the Taxi Cab Problem, and the Lawsuit that Might Change Everything

The Dirty Secret of Billing Fraud

Here’s the truth: problematic billing practices within certain segments of the class action bar are an open secret among plaintiff and defense lawyers, and likely suspected by some judges as well. But the issue rarely receives media attention—good luck getting a comment—and it can seem like too much “inside baseball” to attract broader interest.

The art of fraudulent class action billing exists on a continuum:

—At the mild end: Bill padders who throw five hours on the tab for reviewing a complaint without any contributions.

—Even worse: Firms hiring temporary lawyers for $50 an hour to handle minor tasks, then billing that time at $450 an hour.

—At the most extreme end: The “taxi cab” firms, where the meter mysteriously starts running at hundreds of thousands of dollars the minute they enter their appearances. These firms engage in fabricated billing, plain and simple.

Certain practice areas are especially vulnerable. Smaller firms handling high-volume, quick-settlement cases—like data breaches and false labeling class actions—create perfect conditions for abuse.

Lawmakers Traded Stocks Heavily as Trump Rolled Out ‘Liberation Day’ Tariffs

As markets tanked in the wake of President Trump’s “Liberation Day” tariffs in early April, members of Congress and their families made hundreds of stock trades, shining a spotlight on a controversial practice that some lawmakers have pushed to ban.

From April 2, when Trump launched the sweeping tariffs, to April 8, the day before he paused many of them, more than a dozen House lawmakers and their family members made more than 700 stock trades, according to a Wall Street Journal analysis of disclosure filings. Top stocks purchased in that “Liberation Week” period, by the number of trades listed in the disclosures, included MKS Instruments and JPMorgan Chase, while the most sold stocks included Honeywell International and Visa.

Two lawmakers who have called for stock-trading bans in the past—Reps. Ro Khanna (D., Calif.) and Rob Bresnahan (R., Pa.)—reported the most transactions by themselves or family members, the analysis found.

Could the SEC’s Enforcement Spotlight Return to Executive Perks?

Executive perk disclosures are a perennial SEC enforcement subject, typically generating two or three cases each year. These disclosures present unique risks, given the SEC’s expansive view of what constitutes a “perk,” the low-dollar thresholds for disclosures, and the absence of any scienter requirement for violations. And as we’ve noted before [SEC Scrutiny of Executive Perks Brings Pitfalls for Companies], travel-related perks are by far the most common targets of SEC enforcement, appearing in nearly every perks-related case the agency has filed in the last 10 years.

A recent spike in executive perks could prompt greater SEC focus on these disclosures. Corporate governance analyst Glass Lewis recently reported that total perks paid to CEOs in 2023 had increased 31% from levels seen four years earlier, driven primarily by growth in executive aircraft use and personal security. Both the value of CEO air travel and the number of companies providing it grew sharply from 2019 to 2023, while personal security payments more than doubled in that span. Depending on the dollar value of these benefits, SEC guidance may require their disclosure, even if business-related, unless they are “integral” to an executive’s job or provided generally to all employees.

Evolving DEI Disclosure Practices in SEC Filings

What Comes After “DEI”?

While many companies are retaining elements of DEI-related disclosure, only 34 percent of the S&P 500 used the term “DEI” to describe their diversity programs in 10-Ks filed since January. This is a major decrease from 90 percent in 2024. Instead, companies in the S&P 500 are replacing “DEI” with familiar language.

Where companies in the S&P 500 still have some DEI-related disclosure, 76 percent still used the word “inclusion”, 40 percent still used the word “diversity”, and 19 percent used “culture” or “belonging” to describe what was labeled as “DEI”. While “inclusion” is commonly used, and “diversity and inclusion” or similar is used by approximately 19 percent of relevant companies, there does not appear to be a clear consensus on a replacement term, although the trend to eliminate the word “diversity” will likely accelerate. Companies are taking different approaches to naming their programs, and we identified over 30 different phrases now used across the S&P 500 to describe these programs.

For example, we found the following phrases commonly used to describe diversity programs:

—Belonging and Culture;

—Equal Opportunity and Inclusive;

—Building a Diverse and Inclusive Workplace;

—Inclusion for All;

—Corporate Culture and Engagement;

—Inclusion, Diversity and Equal Employment;

—and Workplace Culture.