Time to Update Corporate Compliance Programs Following DOJ Guidance

Guidance for evaluating corporate compliance programs. The guidance is intended to provide insight into compliance program factors that prosecutors will considerFebruary 2017 guidance documentrecent thinking on effective corporate compliance programs, as revealed by Assistant Attorney General Brian Benczkowski’s keynote address at the Ethics and Compliance Initiative (ECI) 2019 Annual Impact Conference. In his address, AAG Benczkowski reaffirmed the central role of corporate compliance programs in the context of DOJ’s charging decisions. According to the Guidance, compliance programs will be significant in “determining the appropriate (1) form of any resolution or prosecution; (2) monetary penalty, if any; and (3) compliance obligations contained in any corporate criminal resolution (e.g., monitorship or reporting obligations).”

GAO Highlights Responsibility Exception to “Late Is Late” Rule

Under the Federal Acquisition Regulation (FAR) “late is late” rule, a government contractor’s proposal must be received by the government by the time stated in the solicitation. If a proposal document is even one second late, it cannot be accepted by the government. The FAR provides very limited exceptions to this rule. Specifically, it states that where a proposal is received before the award and the contracting officer determines that accepting it will not delay the procurement, the government may accept the untimely proposal if: (1) it was received electronically at the initial point of entry to the government infrastructure at least one working day before the proposal submission deadline, or (2) if it was under government control before the proposal submission deadline, or (3) if only one proposal was received. These narrow FAR-based exceptions apply infrequently.

Countdown to CCPA: Do You Know Where Your Data Is?

It’s January 2, 2020, and you just received 25 requests asking for disclosure about your data collection, use and sharing practices and for a copy of the specific pieces of personal information you collected about the requesting individuals during the last 12 months. You have 45 days to respond. What do you do? Close down the business so you can find the information? By being prepared you can avoid a crisis.

EPA and States Target Widely Used PFAS

U.S. environmental authorities, concerned about the prevalence of PFAS, are considering and taking steps to restrict usage, potentially affecting a wide variety of products and processes, and to require owners and operators of properties that have the potential to be contaminated with PFAS to investigate and, if necessary, perform remediation. Businesses and consultants are encouraged to be alert to these developments, which could give rise to litigation risks, supply chain disruptions, and a reconsideration of remedial strategies and objectives at sites with PFAS contamination.

The IRS Issues 83(i) Guidance: Opportunity to “Opt Out”

Internal Revenue Code Section 83(i) was introduced as part as of the Tax Cuts and Jobs Act of 2017. Under Section 83(i), if certain requirements are satisfied, employees of private companies who receive nonstatutory stock options (NSOs) or restricted stock units (RSUs) may elect to defer federal income tax on the exercise of the NSOs or settlement of the RSUs for up to five (5) years (referred to as an 83(i) election).

U.S. Senate Holds Hearing on B737 MAX

On Wednesday, March 27, 2019, U.S. Senator Ted Cruz (R-Texas), chairman of the Senate Subcommittee on Aviation and Space, convened a hearing on “The State of Airline Safety: Federal Oversight of Commercial Aviation” in response to the recent tragedies in Ethiopia and Indonesia and the subsequent grounding of the Boeing 737 MAX aircraft. The panel of government witnesses invited to testify and answer questions included Daniel Elwell, Acting Administrator of the Federal Aviation Administration (FAA), Calvin Scovel, Inspector General of the Department of Transportation (DOT), and Robert Sumwalt, Chairman of the National Transportation Safety Board (NTSB). The subcommittee intends to hold an additional hearing at a later date and plans to include a Boeing representative.

Supreme Court: Intentionally Disseminating a False Statement One Did Not “Make” May Still Violate SEC Rule 10b-5

SEC Rule 10b-5(b) makes it unlawful “[t]o make any untrue statement of a material fact . . . in connection with the purchase or sale of any security.” The Court in Janus Capital Group Inc. v. First Derivative Traders, 564 U.S. 135, 142 (2011) limited “maker” liability under 10b-5(b) to “the person or entity with ultimate authority over the statement, including its content and whether and how to communicate it.” In Lorenzo v. Securities & Exchange Commission, No. 17-1077, 2019 WL 1369839 (S. Ct. Mar. 27, 2019), the Court considers whether one who is not a “maker” of a false statement under 10b-5(b) can nonetheless be primarily liable under 10b-5(a) or 10b-5(c) for disseminating the false statement, knowing it to be false.

How Employers Should Respond to the Trump Administration’s Proposed Overtime Rule

On March 7, 2019, the U.S. Department of Labor (DOL) issued its much-anticipated Notice of Proposed Rulemaking (NPRM) for amending the federal Fair Labor Standards Act (FLSA) regulations for exemptions from overtime pay requirements for the so-called “white collar” exemptions. The Obama Administration had previously published a regulation that would have more than doubled the minimum salary level for executive, administrative, and professional employees to be classified as exempt from overtime and minimum wage requirements (the EAP exemption) and increased the minimum salary level by a third for highly compensated employees (the HCE exemption), with further automatic increases every three years (the “2016 Final Rule”). On November 22, 2016, just nine days before that regulation would have become effective, a United States District Court in Texas issued a nationwide preliminary injunction against enforcement of the 2016 Final Rule, followed by a permanent injunction on Aug. 31, 2017. The current salary minimum for the EAP exemption is $23,660, below the federal poverty level for a family of four, and there was widespread support among both employers and employees for increasing that minimum. Until publication of the NPRM, however, uncertainty reigned about what level the Trump Administration’s DOL would propose. For EAP employees, the DOL has proposed a minimum salary level almost at the midpoint between level sought by the 2016 Final Rule and the current level, and it has proposed raising the minimum salary for highly compensated employees above the salary level first stated in the 2016 Final Rule.

The SBA Rules When a Letter of Intent Creates Affiliation

In two recent decisions, OHA discussed some of the factors that may differentiate whether an LOI triggers SBA’s “present effect rule” and creates an affiliation between parties negotiating the acquisition of a small business. In Size Appeal of Telecommunications Support Services, Inc., SBA No. SIZ-5953 (2018), OHA determined that the LOI did not create an affiliation, and in Size Appeal of Enhanced Vision Systems, Inc., SBA No. SIZ-5978 (2018), OHA found that the LOI did create an affiliation and drew several distinctions between the two fact patterns.

OFCCP Conducts Town Hall Meetings for Tech Industry Contractors and Implements Program Changes

In September 2017, OFCCP held three nationwide town hall meetings. The well-attended events provided a forum for contractors to express concerns and challenges with compliance with the rules and regulations OFCCP enforces, including Executive Order 11246 (Equal Employment Opportunity), Section 503 of the Rehabilitation Act, and the Vietnam Era Veterans’ Readjustment Assistance Act (VEVRAA). Since then, OFCCP has seen leadership changes and has issued a number of pro-contractor directives and changes that can be traced back to feedback received at the town halls and elsewhere from the contractor community.

Winning Say-on-Pay: Top Ten Executive Compensation Proxy Tips For 2019

As calendar year companies complete their Compensation Discussion & Analysis (CD&A) in their proxy statement for spring shareholder meetings, they may wish to consider the following tips for a favorable Say-on-Pay result:
 
1.  Run the ISS CEO Pay-for-Performance Test Before Year End Decisions Are MadeThe pay-for-performance test of Institutional Shareholder Services, in part, compares TSR and CEO compensation against an ISS-constructed peer group. If relative shareholder return ranks in the lower tier of that peer group, ISS may criticize CEO pay that ranks at or above the peer group median and issue a no-vote recommendation. Companies should carefully consider the risk of a no-vote before setting year end pay. Such results may also behoove companies to summarize next year decisions, to the extent made, for helpful context.

Easing the Prohibitions against Gun-Jumping

Introduction
On February 19, 2019, the Securities and Exchange Commission (SEC) proposed a rule that would generally permit all issuers to “jump the gun”—that is, to make offers to certain institutional investors prior to the filing of a registration statement. This rule would enable any issuer, as well as its proposed underwriters, to “test the waters” to see to what extent these institutions might be interested in investing in the company before a registration statement is filed.

FAR’s Professional Compensation Clause and Keeping Things Real

On January 24, 2019, the Court issued its decision in Sparksoft Corporation v. United States, No. 18-1708C, holding that an agency is required to evaluate the realism of offerors’ proposed compensation plans under FAR 52.222-46, Evaluation of Compensation for Professional Employees, related to the entire contract, including the firm-fixed price (FFP). This case stems from a solicitation issued by the U.S. Department of Health and Human Services, Centers for Medicare and Medicaid Services (CMS), seeking proposals for information technology operations, maintenance, and ancillary support. The solicitation stated that the contract would consist of both FFP and time-and-materials components, and contained FAR 52.222-46.

Government Contract Acquisitions and the Pending Proposal Problem

GAO’s recent decision in Wyle Laboratories Inc., B-416528.2, raises significant questions as to the viability of proposals that are submitted before or during, and remain pending after, a government contract acquisition. This is the second recent GAO protest decision that highlights the risks of certain government contract M&A deals to pending procurements, and the decision underscores the importance of strategic planning in connection with such deals.

Congressional Blue-Ribbon Committee Recommends Major Changes to Certain Socioeconomic and Small Business Requirements for DoD Procurements

Section 809 of the National Defense Authorization Act (NDAA) for Fiscal Year 2016 directed the Secretary of Defense to establish a panel to study DoD’s procurement practices and recommend legislative and other changes aimed at modernizing those practices. The Panel has released the third volume of its final report, making a total of 58 new recommendations. As we noted in our overview of Volume 3 of the Panel’s report, a number of the recommendations relate to socioeconomic and small business issues. These recommendations attempt to streamline and improve the efficiency and effectiveness of the defense acquisition process by removing barriers to entry, revising outdated and burdensome requirements, and clarifying the preference for procuring commercial items when considering small business set-asides. We discuss Recommendations 64, 65, 79 and 80 below.

Section 809 Panel Recommendations: Overhaul Audit Practices and Increase Reliance on Private-Sector Accounting Rules

As we reported previously, the Congressionally mandated Section 809 Panel (the Panel) recently issued Volume 3 of its Final Report. This volume builds upon the first two volumes of the Final Report by making additional recommendations for improving DoD’s acquisition process. This is the third of four alerts about the substance of Volume 3 of the Final Report. In this client alert, we explore recommendations regarding a broad range of financial issues at DoD.

Section 809 Panel: The Commercialization of Government Contracting

As we previously reported, the Congressionally mandated Section 809 Panel recently issued Volume 3 of its Final Report. Volume 3 of the Final Report makes additional recommendations for improving the Department of Defense’s (DoD) acquisition process. This is the second of four alerts about the substance of Volume 3 of the Final Report. In this client alert, we explore recommendations that the DoD replicate the commercial contracting process.

Section 809 Panel Installment One: Expanding Agency Procurement Discretion, Narrowing Contractors’ Bid Protest Rights Recommended

Section 809 of the National Defense Authorization Act (NDAA) for Fiscal Year 2016 directed the Secretary of Defense to establish a panel to study DoD’s procurement practices and recommend legislative and other changes aimed at modernizing them. The Panel has released the third volume of its final report, making a total of 58 new recommendations. As we noted in our overview of Volume 3 of the Panel’s report, a number of the recommendations relate to bid protests of DoD procurements. Some recommendations may be viewed as innocuous changes that will promote transparency in DoD’s procurement practices. Other recommendations, however, may be viewed as efforts to streamline DoD’s acquisition practices—not by promoting transparency and accountability, but by eliminating avenues of relief for aggrieved offerors. We discuss Recommendations 66–69 and 76 in detail below.

New York Employment Law Outlook 2019

2018 was a year of sweeping change for employers and employees in New York. In the wake of the #MeToo movement, New York State and New York City reacted quickly to pass a series of laws to reduce sexual harassment in the workplace. The New York Paid Family Leave Benefits Law went into effect, providing employees eight weeks of partially paid leave funded by employee paycheck deductions. New York City amended its Earned Sick Time Act to allow employees to take “safe leave” to seek redress for victims or family members of victims of sexual assault, domestic violence, or stalking.

The Deadline Looms for New York Cybersecurity Regulations Vendor Compliance Requirements

Financial institutions regulated by the New York Department of Financial Services (DFS)—referred to in this post as “Covered Entities”—should by now be well familiar with the department’s sweeping cybersecurity regulation, 23 NYCRR 500, that became effective on March 1, 2017. The regulation delves into a level of detail (e.g., multi-factor authentication and encryption requirements) and requires a level of senior level attention (e.g., annual attestation of compliance, signed by the Board of Directors or a Senior Officer) heretofore unseen in U.S. federal or state regulations.

Exchange Act Reporting Companies Receive Green Light to Use Regulation A

Introduction
On December 19, 2018, the Securities and Exchange Commission (SEC) adopted amendments to Regulation A to allow companies subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934 (Exchange Act) to use Regulation A to conduct securities offerings of up to $50 million in a 12-month period without Securities Act registration. Regulation A provides an exemption from the registration requirements of the Securities Act of 1933 to companies organized in the United States or Canada for offers and sales of securities of up to $20 million for Tier 1 offerings and up to $50 million for Tier 2 offerings. Securities sold under Regulation A are deemed sold in a public offering and therefore are not “restricted securities” subject to Securities Act resale limitations. Prior to these amendments, Regulation A was not available to issuers that were already Exchange Act reporting companies, and its use has been modest. Following publication of the amendments in the Federal Register, which is expected to occur shortly, Exchange Act reporting companies will have the additional flexibility to use Regulation A when raising capital through the public markets.

The Brexit Blindspot: Nuclear Retransfers

The UK is scheduled to leave the European Union on March 29, 2019. While the United States and UK governments have taken significant steps to ensure that contracts related to nuclear power stations and the nuclear fuel cycle are not interrupted, little public attention has been paid to the potential delay in commerce caused by the UK no longer being a member of the European Atomic Energy Community (EURATOM). This is particularly important because the U.S. Government will now need to provide its consent for retransfers of certain nuclear materials and components from the EURATOM countries to the UK, after the UK withdraws from EURATOM. While the U.S.- EURATOM Agreement for Cooperation provides a mechanism for the United States to provide its advance consent for these retransfers to the UK, the process itself could likely take at least several months and perhaps a year or more, as explained below. This article provides what we believe will be the potential impediments to commerce. However, the precise manner in which U.S. retransfer consent rights affect nuclear commerce with the UK will vary depending upon the specific circumstances of each proposed retransfer.

Civilian Board of Contract Appeals Releases 2018 Annual Report

This past weekend, the Civilian Board of Contract Appeals (CBCA) released its fiscal year (FY) 2018 Annual Report. The CBCA docketed 409 new matters in FY 2018, a modest increase from 385 docketed in FY 2017. Prior to FY 2018, the Board had experienced docket decreases for each of the previous five years. Also, for the first time since FY 2014, the number of new cases docketed during the year exceeded the number of appeals that the CBCA resolved.

Natural Resources Agency Finalizes Updates to the CEQA Guidelines

At the end of November 2018, the California Natural Resources Agency (CNRA) posted final adopted text for amendments to the regulations implementing the California Environmental Quality Act (CEQA), known as the CEQA Guidelines. The final text is the result of over five years of development efforts by the Governor’s Office of Planning & Research (OPR) and CNRA. The amendments combine changes to transportation impact analysis as directed by Senate Bill 743 (2013) with the most comprehensive update to the CEQA Guidelines since 1998, incorporating statutory changes, court decisions, and comments from public agencies, business and environmental groups, and other stakeholders through multiple rounds of public review. The wide range of issues covered in the amendments includes use of regulatory standards as significance thresholds; environmental baselines; a new metric for analyzing transportation impacts; climate, water supply and energy impacts; and numerous procedural and technical improvements.

GAO Publishes Fiscal Year 2018 Bid Protest Statistics

On November 27, 2018, the Government Accountability Office (GAO) published its annual report on bid protest statistics. The GAO’s report, which is mandated by the Competition in Contracting Act, lists its key statistics for Fiscal Year 2018 bid protest activity. The GAO’s report also includes a chart providing similar bid protest statistics for Fiscal Years 2014-2018. This five-year snapshot provides some valuable insight into current bid protest trends and developments at the GAO.

Groundbreaking Changes Coming Soon to GSA Multiple Award Schedules

Over the next two years, the General Services Administration (GSA) plans to consolidate the agency’s 24 Multiple Award Schedules into a single schedule. The consolidation is part of GSA’s strategy to optimize the federal acquisition process. By FY 2020, GSA plans to have one set of terms and conditions, which should enhance consistency in the acquisition process. With one schedule contract, agencies can buy and vendors can offer a “solutions-based approach” including both products and services.

New Era of Aggressive Oversight Expected from House Democrats

The U.S. House of Representatives will be a hotbed of activity with respect to oversight of the Trump Administration and private sector stakeholders that are aligned with or have benefitted from the Administration’s policies over the past two years. House Democratic committee leaders are eager to shine a light on (and, inevitably, score political points related to) alleged malfeasance or corruption. Attention may come in the form of information requests and subpoenas, congressional hearings, committee investigations, and other forms of public inquiry.

The Qualified Opportunity Zone Program: Thoughts on the Long-Awaited Treasury Guidance

Section 13823 of the Tax Cuts and Jobs Act, P.L. No. 115-97 (2017) added Sections 1400Z-1 and 1400Z-2 to the Internal Revenue Code of 1986, as amended (the “Code”). These provisions created the Qualified Opportunity Zone (“QOZ”) program that has recently generated such a wave of media attention that one might surmise President Trump had sent an angry late-night tweet about it.

Pillsbury's Post-Election Outlook

The 2018 Midterm Election played out as most poll forecasters speculated. Although several races have yet to be decided, Republicans have retained control of the Senate, but lost at least 29 seats, allowing the Democrats to wrest back control of the House for the first time since 2010.

Human Trafficking Corporate Liability Under New U.S. Agency

Last month, Congress passed the Better Utilization of Investment Leading to Development, a historic piece of legislation creating a new development finance agency: the U.S. International Development Finance Corporation (USIDFC). Aimed at helping developing countries prosper while advancing U.S. foreign policy goals and enhancing American national security interests, USIDFC will combine the U.S. Overseas Private Investment Corporation (OPIC) with various private investments functions of the U.S. Agency for International Development. As the U.S. government agency tasked with helping American businesses invest in emerging markets, USIDFC is expected to continue OPIC’s work by providing financial support to investments in developing countries, including areas of the world that suffer from significant poverty and armed conflict. However, because human trafficking such as forced labor is often prevalent in these regions, current recipients of OPIC funding and new participants under the upcoming USIDFC’s financing initiatives may be subject to significant civil and criminal liability if compulsory labor is used in connection with their U.S. government-supported business ventures and investments.

2018 Election Night Guide

Pillsbury’s Political Law and Government Law & Strategies groups break down the need-to-know numbers for this year’s election. Pillsbury’s biennial Election Night Guide examines the potential outcomes for the 2018 Congressional and Governor’s races. Our Public Policy team is also preparing a post-election guide that will be useful in navigating potential changes in Congress.

Fall 2018 CFIUS Briefing

Many US-China deals are still getting done, but there is no question the challenges facing those deals has increased over recent months. Relatively few transactions have emerged from the CFIUS process since earlier this year; some have cleared and some have not. Our review of publicly available information indicates that the clearance rate for US-China deals since the Trump Administration took office has fallen from about 55% earlier this year to about 50%, but two very high-profile deals received approval (an acquisition by COSCO which involved a pier in Long Beach Harbor, and China Oceanwide’s acquisition of Genworth Financial). We continue to believe that careful selection of target assets, early risk assessment, and transparent filings with CFIUS will still allow many if not most deals to get through.

The Fiscal Year 2019 NDAA Imposes Government-Wide Limitations on the Use of Lowest-Price Technically Acceptable Procurements

Introduction
The annual Department of Defense (DoD) authorization bill has long been used to impose government-wide procurement reforms that extend beyond the DoD. The recently enacted National Defense Authorization Act (NDAA) continues this tradition, by restricting civilian agencies’ use of the much-derided lowest price, technically acceptable (LPTA) procurement process, instead of the more fulsome best value trade-off process. The new NDAA now imposes limitations on the use of LPTA procurements that were previously imposed on the DoD and applies those limitations government-wide.

President Trump Signs FY 2019 NDAA

On August 13, 2018, President Trump signed the Fiscal Year 2019 National Defense Authorization Act (2019 NDAA), which includes $616.9 billion for the Department of Defense’s (DoD) base budget, $69 billion for overseas contingency operations funding, $8.9 billion for mandatory defense spending and $21.9 billion for nuclear weapons programs under the Department of Energy. We have written extensively on numerous provisions of this new law.

Congress Commissions Study of Bid Protests Filed at Both the GAO and COFC

We have previously discussed Congress’ efforts to reform the bid protest process through recent National Defense Authorization Acts (NDAA). In the Fiscal Year 2017 NDAA, Congress mandated a review of the bid protest process for Department of Defense (DoD) acquisitions, which led to a nearly year-long research study by the RAND National Defense Research Institute (RAND). The Fiscal Year 2018 NDAA provided for a number of reforms to the bid protest system, including enhanced debriefing rights for protestors. Much of these enhanced debriefing rights were implemented on March 22, 2018, by a Class Deviation issued by DoD. This year’s NDAA signals Congress’ continued interest in reforming the bid protest system to enhance the efficiency of the acquisition system.

New SIGAR Report Identifies “Waste, Fraud and Abuse” in Afghanistan

We recently reported on a Department of Defense (DoD) regulation effective April 13, 2018, that prevents government contracting officers from funding projects in Afghanistan that cannot be safely accessed and monitored by military or civilian personnel, as these projects raise a heightened specter of waste, fraud, and abuse. A new report (the “SIGAR Report”) from the Office of the Special Inspector General for Afghanistan Reconstruction, the government entity charged with monitoring U.S. reconstruction efforts in Afghanistan, effectively validates the concerns that gave rise to this regulation and suggests that government scrutiny of public spending in Afghanistan is likely to continue to intensify.

Congress Reaches Agreement on CFIUS Reform Legislation Broadening National Security Reviews and Addressing Emerging Technologies

House and Senate negotiators have agreed on proposed reforms to the Committee on Foreign Investment in the United States (CFIUS) foreign investment review process, which has been added as Title XVII of the FY2019 National Defense Authorization Act (NDAA). The final bill makes a number of changes intended to improve the efficiency of national security reviews and investigations, although a significant increase in staff and funding will be required in order to handle the increased caseload. Importantly, outbound technology transfers in the context of joint ventures and other collaborative arrangements will not be added to the “covered transaction” definition, but will instead be addressed by U.S. export controls.

DoD’s Enhanced Debriefings: GAO Provides Timeliness Guidance

In previous Client Alerts (found here and here), we have discussed the new rules issued by the Department of Defense (DoD) that significantly bolster the rights of government contractors to receive “debriefings” pursuant to Part 15 of the Federal Acquisition Regulation (FAR), following the award of defense contracts. The Government Accountability Office’s (GAO) recent decision in State Women Corporation, B-416510 (July 12, 2018) provides important new guidance regarding GAO’s timeliness rules in the context of these newly enhanced debriefings.

The DOL’s Fiduciary Rule Is Dead! Now What

On June 21, 2018, the Fifth Circuit Court of Appeals issued a highly anticipated mandate vacating the Department of Labor’s (DOL) Fiduciary rule in toto. The mandate follows numerous challenges to the DOL’s Fiduciary rule and the Court’s earlier decision holding that the Fiduciary rule was invalidly promulgated.

The U.S. Supreme Court Changes Sales and Use Tax Collection Nexus

In South Dakota v. Wayfair, Inc., the Court overrules the “physical presence” requirement as “unsound and incorrect”

The UK’s Sanctions and Anti-Money Laundering Act Enters into Law

On 23 May 2018, the Sanctions and Anti-Money Laundering Act became law in the United Kingdom. Its aim is to provide a legal framework to allow the UK to impose sanctions and implement its own sanctions regime once the UK leaves the EU on 29 March 2019. However, the Bill goes well beyond any current EU sanctions regime and provides scope for the Government to shape an autonomous UK sanctions policy

With Liberty and Cannabis for All

Legalized cannabis use is rapidly sweeping the nation. Currently, 29 states have legalized some form of cannabis, effectively turning the majority of the United States green. In this post, we will take a closer look at some of these green states and discuss cannabis real estate trends across both state and country lines.

Car Wars: Trump Administration Opens Section 232 Investigation into Imports of Autos and Auto Parts

On May 23, 2018, as directed by President Trump, the Secretary of Commerce initiated a Section 232 investigation into whether imports of automobiles, including SUVs, vans, light trucks and automotive parts, threaten to impair national security. President Trump reportedly is contemplating tariffs as high as 25% on automobile imports, similar to the tariff imposed a result of its recent 232 action on steel imports.

A New Path to Managing Risks from Upstream Oil and Gas Transactions

If EPA finalizes its newest enforcement proposal for the oil and gas production sector, managing environmental compliance risks arising from mergers and acquisitions in that sector is about to get easier. Under EPA’s proposal, a new owner of oil and gas extraction and production facilities can enter into an agreement with EPA to audit its new facilities for noncompliance with environmental laws and then address any violations the new owner finds without having to pay penalties for those shortcomings. Comments on the proposed agreement are due by June 4, 2018.

The Joke’s on Us! – SEC Demonstrates Sense of Humor and Serious Lessons about Fraudulent Coin Offerings

The rapid growth of cryptocurrency markets, digital asset products and initial coin offerings (ICOs), and the alarmingly high number of fraudulent ICO attempts among them, has prompted the SEC to engage the public in some creative investor education.

Investment Funds Authority Ildiko Duckor Demystifies Quant Funds and Their Risks

Pillsbury Investment Funds practice co-leader Ildiko Duckor recently spoke with The Hedge Fund Law Report about the strategies and risks inherent in investing in and managing quant funds, which utilize highly sophisticated computer-based models to automate trading activities and are increasingly popular in the “hyper-connected” trading and investment sector.

With CDD and Beneficial Ownership Rule in Effect, FinCEN Continues to Clarify and Refine Rules for Financial Institutions

Long awaited rules for “Customer Due Diligence Requirements for Financial Institutions” (the CDD Rules) went into effect on May 11, 2018. FinCEN has taken steps to clarify and refine implementation of the CDD Rules, issuing (1) FAQs on April 3, 2018 and (2) a ruling on May 16, 2018 providing covered financial institutions with a limited 90-day exceptive relief from the obligations for financial products and services that are subject to automatic renewals, provided such products were established before May 11, 2018.

New York Response to #MeToo: New Laws Target Sexual Harassment

Last month, Gov. Andrew Cuomo signed into law the 2019 New York State budget. The budget bill included a series of laws aiming to expand the scope of worker protections against sexual harassment, to limit employers’ ability to keep claims of sexual harassment confidential, and to increase employer and employee education on sexual harassment.

South Carolina Begins Licensing Money Transmission

In 2016, South Carolina enacted the South Carolina Anti-Money Laundering Act (the “Act”). The Act was to become effective upon the later of June 9, 2017, or the adoption of final implementing regulations. Those regulations were adopted, and they will become effective when published on May 25, 2018. Consequently, the Act will finally become effective on May 25, 2018.

New Proposed DoD Cyber Guidance May Fuel Bid Protest Docket

Department of Defense (DoD) cybersecurity requirements, referred to as Safeguarding Covered Defense Information and Cyber Incident Reporting went into effect at the start of the year, and have been met with an array of questions from contractors eager to comply, but unsure of the exact standards they are expected to meet. A long list of Frequently Asked Questions (FAQs) issued by DoD on April 2, 2018, has provided some clarity. However, significant areas of ambiguity remain, and language concerning a Contractor’s compliance with the new contract clause is finding its way into new contract solicitations. DoD has proposed guidance to answers some of those questions, and contractors will have until the end of May to provide feedback to the Government on how helpful—or unhelpful—the guidance is.