Women’s White Collar Defense Association 2022 Global Enforcement Series: Views from the Top

Last week, the Women’s White Collar Defense Association continued its 2022 Global Enforcement Series by holding “Views from the Top” in Washington D.C.  The event featured a panel of top officials, including:

• Hampton Y. Dellinger, Assistant Attorney General for the Office of Legal Policy (“OLP”);
• Kenneth Polite, Assistant Attorney General for the Criminal Division of the Department of Justice (“DOJ”);
• Anne Milgram, Administrator of the Drug Enforcement Administration (“DEA”);
• Gurbir Grewal, Director of the Division of Enforcement at the Securities and Exchange Commission (“SEC”);
• Holly Vedova, Director of the Bureau of Competition at the Federal Trade Commission (“FTC”); and
• Jonathan Kanter, Assistant Attorney General for the Antitrust Division of the DOJ.

Panel members offered their thoughts on enforcement priorities and current challenges.

Robust enforcement, robust remedies, and robust compliance are resounding themes that the officials wove through their remarks. Similar views were shared at the White Collar Conference last month when Foreign Corrupt Practices Act division heads David Last (DOJ) and Charles Cain (SEC) previewed their enforcement priorities. Here, both Polite and Grewal mentioned their agencies’ return to the 2015 “Yates Memo” and readiness to impose corporate monitors where necessary. For the SEC, this also means adhering to Mary Jo White’s admissions policy and requiring admissions in cases where heightened accountability and acceptance of responsibility are in the public interest.

Dusting off his hat from when he was a compliance guru in the private sector, Polite reemphasized the importance of a functional compliance program. He urged practitioners to “tell clients they should invest in compliance now or they will pay for it later,” as “compliance programs will get a lot of attention.” Scrutiny of corporate compliance should involve risk analysis, operational assessment, and close coordination with chief compliance officers. Reiterating Last’s remarks at the White Collar Conference, Polite encouraged attorneys to empower chief compliance officers to take ownership of compliance presentations by showing a willingness to engage in dialogue directly with the government and to sign resolutions. Polite suggested that this involvement of corporate leadership would lend credibility and, perhaps, translate to greater cooperation credit. In terms of determining whether a corporation is a recidivist, Polite added that the DOJ’s Criminal Division now requires prosecutors to consider all corporate misconduct — not just similar prior misconduct as established in the Filip memo of 2008.

The panel also spoke to the following themes:

Active Enforcement. All panelists echoed a goal of speedy enforcement and intentional coordination with other agencies and international bodies.

• Noting a “bias toward action,” Kanter mentioned the Antitrust Division’s efforts to shorten investigations and bring cases to court, including through amicus brief filings in significant cases. Kanter’s division is focused on bringing, litigating, and winning cases, and it is “not afraid to litigate or hold individuals accountable.” As antitrust law is rooted in the common law, his division is investing in litigation resources to help drive common law’s adaptation to the modern economy. Kanter also highlighted his division’s effective relationships with the European Commission, along with authorities in Australia, New Zealand, Canada, Mexico, and Brazil.
• According to Vedova, the FTC is also focused on litigating more cases instead of fashioning complex, behavioral remedies. Given staff shortages, the FTC’s time is best spent preparing for litigation. The FTC and DOJ are also reworking merger guidelines, and Vedova hinted that the merger review process will provide “customer service” that enhances the diligence process for mergers — the majority of which are benign.
• Grewal stated that the SEC is committed to speeding up investigations and shortening the Wells process. In the same vein, he recommends that practitioners refrain from fighting every issue and concede some points during the investigation to demonstrate credibility. The most effective presentations involve an acknowledgment of case weaknesses and congruent remedies.
• Milgram views her enforcement priorities as straightforward: to stop fentanyl trafficking and consumption, and ultimately save lives. Key to the DEA’s mission is international coordination with authorities in Mexico, China, and other sites of fentanyl production and distribution.
• For the DOJ, international coordination is also imperative. Polite credited international partnerships as driving the most significant enforcement actions, including through extraditions, Mutual Legal Assistance Treaties (MLATs), and intervention in human rights violations.

Data Analytics, Data Management, and Keeping up with Evolving Markets.

As Kanter commented, every company is a technology company. Because companies across industries use electronic platforms to store information, manage customer data, and operate, the panel spoke to the challenges of exchanging increasing amounts of data in the course of proceedings, as well as the centrality of data analytics as an enforcement tool:

• Where the DOJ’s Criminal Division has traditionally used data analytics to prosecute cases in healthcare fraud cases, Polite stated that data analytics will now be used across all types of cases. Data science will play a role at all stages and will help with identifying, investigating, and prosecuting actions. Data management continues to present “crippling” issues in investigations.
• According to Milgram, the DEA is focused on enhancing internal technology and information sharing among the Centers for Disease Control and Prevention and the Federal Bureau of Investigation to locate geographical areas with high numbers of overdoses and violence. Concurring with Kanter, Milgram noted that every enforcement action involves digital evidence, whether cryptocurrency transactions, smartphone data, or social media history. To keep up with the changing landscape of drug crimes, the DEA is designing information technology to be able to evolve.
• Dellinger noted that forensic science is a priority for the OLP, while recognizing a tension between privacy, security, and access to data by law enforcement. His office is working on policies that grant law enforcement access to encrypted data while preserving individuals’ privacy rights. For example, the OLP is studying how the commercial drone industry can be used to surveil in a safe way and deter criminal misuse of drones.
• With cryptocurrency transactions on the rise, Polite acknowledged that anonymity and decentralization can be helpful. He also noted the digital currency market is ripe for abuse and referred to the National Cryptocurrency Enforcement Team led by Director Eun Young Choi, which is actively devising policies and initiatives applicable to crypto-related investigations.
• Grewal added that the SEC is “technology neutral.” The SEC will keep prosecuting investment misconduct to the extent it occurs in any realm: “You may call it decentralized or ‘DeFi,’ and we call it fraud.”

Diversity, Hiring, and Access to Justice.

Panelists also commented on the need to increase budgets to invest in data scientists, engineers, and industry experts, while attracting diverse candidates who can contribute fresh perspectives. The focus is on “strengthening the diversity of the work done, and the people who do it” according to Polite.

In addition, the panel reminded the audience of its highest priorities:

• Grewal stated that the SEC covers a vast waterfront, aimed at investor protection and restoring trust in the financial markets. Restoration will occur by holding compliance officers, attorneys, large institutions, and enforcement authorities accountable.
• Polite referenced his loss of a loved one to gun violence and reiterated his focus on victim-centered policy, including hiring through a victim coordinator to ensure that all aspects of enforcement pay respect to victims.
• Kanter is committed to making antitrust law and competition concerns accessible to lay people. Accordingly, his division is interviewing farmers, healthcare workers, and small business owners to understand their challenges and concerns. On the criminal side, recent updates to the Antitrust Division’s leniency program were also mentioned.
• Dellinger and Milgram called the public to action. Dellinger encouraged practitioners to engage in pro bono matters and advocate on behalf of legislation, while keeping in mind the current stresses facing young people.  Milgram encouraged all listeners to converse with family and friends about substance abuse and addiction, and to help raise public awareness of fentanyl.

All in all, clients and practitioners should expect heightened scrutiny of compliance programs, a push for litigation, and deployment of data analytics to pervade government investigations and enforcement proceedings.