Michelle B. Karavas

Continuing its controversial and aggressive approaches to cybersecurity, the U.S. Securities and Exchange Commission (SEC) recently charged four current and former public companies for purportedly “materially misleading disclosures” about cybersecurity intrusions and risks. The four victim companies, without admitting or denying the facts of the SEC’s allegations, agreed to pay civil penalties ranging from $4 million to $995 thousand for a combined total of nearly $7 million dollars to settle the charges.

What: The U.S. Supreme Court recently granted certiorari on a petition seeking to curtail the U.S. Department of Justice’s (DOJ) ability to dismiss False Claims Act (FCA) qui tam cases, even if DOJ has determined that the case is likely meritless or will be costly for the Government to pursue.

On February 1, the U.S. Department of Justice (DOJ) announced the second-largest annual total recoveries in the history of the False Claims Act (FCA)—$5.6 billion—for FY 2021 (October 2020 – September 2021). While that staggering figure certainly demonstrates that the FCA remains one of the “most important tools available to the department both to deter and to hold accountable those who seek to misuse public fund,” it does not tell the whole story and it remains to be seen whether DOJ is truly on track to resume its “dazzling decade” following FY 2020’s decade-low recovery ($2.2 billion).

On October 28, 2021, Deputy Attorney General (DAG) Lisa Monaco announced sweeping policy changes to the U.S. Department of Justice’s (DOJ) corporate enforcement at the ABA’s 36th National Institute on White Collar Crime. DAG Monaco continued the Biden DOJ’s reversal of several defense-friendly policies and rolled out an extensive agenda that is designed to be tough on corporations and individuals.

After a wave of defense-friendly policies under the Trump Administration, the U.S. Department of Justice (DOJ) has reversed course on agency guidance and its buyer’s remorse will enable its attorneys to try once again to bolster weak False Claims Act (FCA) cases by citing to non-binding guidance. Attorney General Merrick Garland recently rescinded purportedly “overly restrictive” policy that had “hampered” DOJ’s ability to litigate cases—policy which prohibited using noncompliance with agency guidance as a basis for enforcement actions. While the “Garland Memo” acknowledges longstanding U.S. Supreme Court precedent that “guidance documents ‘do not have the force and effect of law’” it paradoxically encourages DOJ attorneys to liberally cite to agency guidance in litigation. This is particularly troubling for FCA actions which tend to turn on whether defendants knowingly failed to comply with a regulation or contract provision.