On October 2, 2024, the Commodity Futures Trading Commission (“CFTC”) filed a complaint in the U.S. District Court for the Southern District of New York against the former chief executive officer of a carbon credit project developer. The CFTC complaint alleges that the CEO, from approximately 2019 to December 2023, reported false and misleading information to at least one carbon credit registry and to third-party reviewers, presenting a misleading impression of the quality of emissions-reduction projects to obtain carbon credits above what the company was entitled to receive, and sold them to others.

On October 10, 2024, the United States Securities and Exchange Commission (“SEC”) filed a complaint in Illinois federal district court, alleging that diversified trading firm (“Company”) has operated as an unregistered securities dealer by buying and selling more than $2 billion worth of crypto assets. SEC v. Cumberland DRW LLC, 24-cv-9842 (N.D. Ill. 2024). 

On October 8, 2024, a crypto exchange (the “Exchange”) sued the Securities Exchange Commission (“SEC”), the Chair of the SEC Gary Gensler, and four SEC Commissioners, challenging the SEC’s jurisdiction over the secondary sale of network tokens, a type of digital asset, on the crypto platform. Foris DAX Inc. v. U.S. Securities and Exchange Commission, Case No. 6:24-cv-00373 (E.D. Tex. Oct. 8, 2024). Essentially, the Exchange is challenging the SEC’s jurisdiction to regulate the cryptocurrency industry. The Exchange, as a secondary-market purchaser, seeks declaratory and injunctive relief to estop the SEC from “expanding its jurisdiction” to reach the sale of network tokens on the platform.

A groundbreaking decision out of the United States District Court for the Middle District of Florida, if affirmed and adopted by higher courts, could impact the ability of private citizens to file suit against those attempting to defraud the United States Government (the “Government”). On September 30, 2024, Judge Kathryn Kimball Mizelle of the United States District Court for the Middle District of Florida dismissed a qui tam action under the False Claims Act (“FCA”), holding that the FCA’s qui tam provision is unconstitutional. U.S. ex rel. Zafirov v. Florida Medical Associates, LLC, 2024 WL 4349242 (M.D. Fla. Sept. 30, 2024). 

On September 30, 2024, the Securities and Exchange Commission (“SEC”) filed a settled enforcement action against a former director of a public company (the “Company”) over claims that the director had failed to disclose his close personal friendship with a senior executive at the Company, leading to alleged misstatements in the Company’s proxy materials identifying him as an independent director from 2019 to 2023. Securities and Exchange Commission v. Craigie, Docket No. 1-24-cv-07382 (S.D.N.Y. Sept. 30, 2024). Without admitting or denying the allegations, the former director agreed to settle the claims which impose a five-year bar on him serving as an officer or director of a public company and require him to pay a civil penalty of $175,000. The Court approved this settlement on October 1, 2024.

In September 2024, the Securities and Exchange Commission (“SEC” or “the Commission”) resolved three separate actions against corporate entities for reaching agreements with employees, potential employees, and clients that, according to the SEC, impeded an individual’s ability to report violations of the securities laws to the Commission in violation of Rule 21F-17(a) (the “Rule”). This trio of resolutions is the latest in a series of actions focused on protecting whistleblowers and follows the SEC’s first-ever application of the Rule in January 2024 to an agreement reached with a customer or client,[1] rather than an employee, and the first-ever enforcement action by the Commodities Futures Trading Commission (“CFTC”) for alleged violations of its similar whistleblower rules. See CFTC Resolves First Action for Impeding Whistleblowers Over Objections of Two Commissioners.

On September 26, 2024, the Securities and Exchange Commission (“SEC” or “the Commission”) charged a sports-betting company (the “Company”) with violating Regulation Fair Disclosure (“Reg FD”) by disclosing material, nonpublic information to investors via posts to the Company’s CEO’s social media accounts without simultaneously disclosing that same information to all investors via a press release or Form 8-K. The Company agreed to pay a $200,000 civil penalty to settle the SEC’s charges without admitting or denying the allegations.

While 2023 saw a slight increase in the number of FCPA enforcement actions from 2022, there was a marked decline in total penalties from the prior year. Last year, the DOJ and the SEC resolved a total of 14 corporate enforcement actions under the FCPA—four more than 2022—but yielded total penalties of approximately $571 million, as compared to $1.68 billion in 2022. As in previous years, the geographic reach was generally diverse, with corporate enforcement actions targeting activity in Latin and Central America, Asia, and Africa.

On August 27, 2024, the Commodity Futures Trading Commission issued an order filing and simultaneously settling charges against a Swiss energy trader (the “Company”), for allegedly attempting to manipulate the European gasoline market in violation of the Commodity Exchange Act (“CEA”) and CFTC regulations. The order imposes a $48 million civil monetary penalty against the Company, which the CFTC claimed improperly sold gasoline at below-market prices to benefit certain short positions it held in gasoline-linked futures contracts.

On September 4, 2024, Judge John Murphy of the U.S. District Court for the Eastern District of Pennsylvania dismissed on jurisdictional grounds the first post-Jarkesy constitutional challenge to FINRA’s disciplinary proceedings in Blankenship v. Financial Industry Regulatory Authority.

On August 7, 2024, a digital asset infrastructure company (the “Company”) was ordered to pay a $125 million civil penalty for its failure to register institutional sales of its XRP token with the Securities and Exchange Commission (the “SEC”).  SEC v. Ripple Labs, Inc., 20-cv-10832-AT (S.D.N.Y. Aug. 7, 2024).

On August 1, 2024, the Department of Justice issued guidance outlining its Corporate Whistleblower Awards Pilot Program, which offers financial incentives to whistleblowers who bring original and truthful information regarding corporate criminal conduct to the attention of the Department. This pilot program, which was previewed in March and is described in the Department’s Program Guidance, resembles other enforcement agencies’ whistleblower rewards programs, such as that of the Securities Exchange Commission and the Commodities Futures Trading Commission.

The Financial Industry Regulatory Authority (“FINRA”) is now facing a second litigation challenging the constitutionality of its use of disciplinary tribunals to impose sanctions on FINRA members. A broker filed a complaint in federal court in Pennsylvania on the heels of the Supreme Court’s landmark ruling in SEC v. Jarkesy, 144 S.Ct. 2117 (2024). The case, Blankenship v. Financial Industry Regulatory Authority, Docket No. 2:24-cv-03003 (E.D. Pa. Jul 10, 2024), seeks both preliminary and permanent injunctions to halt disciplinary proceedings brought against him by FINRA’s Department of Enforcement. FINRA had previously charged the broker with allegedly engaging in unsuitable mutual fund trading practices including, among other things, recommending short-term holds for Class A mutual funds designed to be long-term investments which allegedly resulted in unnecessary charges to customers and excess commissions to the broker.

On July 18, 2024, U.S. District Judge Paul Engelmayer of the U.S. District Court for the Southern District of New York issued a comprehensive 107-page opinion that may have significant implications for the Securities and Exchange Commission’s (“SEC”) enforcement strategy for alleged disclosure and accounting and disclosure controls violations by public companies and their executives. In particular, the decision may affect the Enforcement Division’s efforts to extend the application of existing requirements for public companies to maintain a system of internal controls over financial reporting to cover situations that are not directly related to financial reporting or accounting matters. 

On June 27, 2024, the Supreme Court of the United States, in a 6-3 ruling, held that when the Securities Exchange Commission seeks civil monetary penalties from defendants for securities fraud, the Seventh Amendment gives such defendants a right to demand a jury trial, making it unconstitutional to force them into an administrative proceeding administered by one of the SEC’s own Administrative Law Judges. While the Court did not invalidate the use of administrative proceedings for other rule violations, it is clear that this decision will have an impact far beyond the SEC. Chief Justice Roberts delivered the opinion of the Court. SEC v. Jarkesy, et al., No. 22-859, 603 U.S. ____ (2024).

On June 26, 2024, the United States Supreme Court, in a 6-3 ruling, held that 18 U.S.C. § 666(a)(1)(B) (“§ 666”) does not prohibit gratuities made to state or local government officials for past official acts. Rather, the Court clarified that § 666 only forbids state or local officials from accepting or agreeing to accept bribes (i.e., future payments for future official acts). Justice Kavanaugh delivered the opinion of the Court. Snyder v. United States, No. 23- 108, 603 U.S.  ____  (2024).

On June 17, 2024, the Commodity Futures Trading Commission (“CFTC” or “the Commission”) issued a groundbreaking order against an energy, metals, and minerals commodity trading company (the "Company”) registered in Singapore. The Order resolved three separate alleged violations of the Commodity Exchange Act (the “CEA”) and related CFTC regulations, and resulted in fines totaling $55 million. While the resolution primarily focused on allegations that the Company misappropriated nonpublic information and manipulated the gasoline market, the Order also encompassed the Company’s alleged interference with whistleblowers through its use of nondisclosure clauses that did not explicitly exempt disclosures to regulators. This component of the resolution, which the CFTC announced as its “First Action Against an Entity for Impeding Whistleblower Communications,” was publicly criticized by two CFTC Commissioners who suggested the Enforcement Division had enlarged the scope of Regulation 165.19(b). 

On April 5, 2024, a jury in the Southern District of New York found cryptocurrency startup Terraform Labs PTE Ltd. (the “Company”) and its co-founder, Do Kwon, liable for securities fraud. The jury sided with the SEC in determining that the Company lied to investors about the stability of their digital assets to raise billions of dollars by selling digital securities, many of which were unregistered. The verdict was delivered following a two-week long trial, providing a significant win to the SEC in its campaign to regulate the cryptocurrency sector and continuing a split among judges related to how to evaluate whether a cryptocurrency is a security.

On April 5, 2024, a jury in the Northern District of California found that Matthew Panuwat had misappropriated his employer’s confidential information and committed insider trading. The closely followed case represented the SEC’s first action under the so-called “shadow trading” theory. The SEC alleged that Panuwat possessed material nonpublic information (“MNPI”) that his employer, Medivation, would soon be acquired by Pfizer. The SEC further alleged that this information influenced his decision to purchase call options in a Medivation competitor—Incyte Corporation—because Panuwat believed the announcement of the Medivation acquisition would increase the stock prices of competitors. Despite the almost certain appeal of this decision to the Ninth Circuit, this verdict could strengthen the SEC’s resolve to bring more claims under the shadow trading theory and leaves open questions concerning whether legal and compliance officers should revise their insider trading policies and procedures to account for this development.

On March 7, 2024, the Department of Justice announced a whistleblower rewards program intended to compensate individuals who assist the Department in discovering unknown significant corporate or financial misconduct with a portion of any resulting forfeiture. 

On February 28, 2024, the New York Attorney General filed suit against one of the world’s largest beef processing companies (the “Company”), alleging that the Company engaged in deceptive business practices and false advertising by misleading the public about its environmental impact. The People of the State of NY v. JBS USA Food Co., et al., (N.Y. Sup. Ct., N.Y. Cnty. Feb. 28, 2024). Of particular note, the complaint focuses not on statements by the Company about its current environmental impact, or presently measurable facts—instead, the complaint focuses on statements by the Company about its future plans and ambitions that the Attorney General claims were not realistic and not supportable. For instance, the complaint alleges that the Company claimed that it would reach “net zero” by 2040 when, in fact, it had not yet measured its emissions or made plans for how it would do so. While not the first “greenwashing” complaint to be brought, it could be one of the most significant, and could shape expectations for companies going forward.

On February 8, 2024, the Supreme Court of the United States unanimously held that whistleblower-plaintiffs need not prove that adverse employment actions were motivated by their employer’s retaliatory intent to obtain protection under the anti-retaliation provisions of the Sarbanes-Oxley Act (“SOX”).  Murray v. UBS Securities, LLC, No. 22-660 (Feb. 8, 2024).  This decision resolved a Circuit split and clarified the whistleblower’s burden under SOX is to prove that the protected activity was merely a contributing factor to the retaliatory act.

On November 21, 2023, the Cayman Islands registered cryptocurrency exchange, Binance Holdings Limited (the “Company”), pled guilty to criminal violations related to allegedly failing to register as a money transmitting business (“MTB”), failing to maintain an effective anti-money laundering program, and violations of the International Emergency Economic Powers Act (“IEEPA”).  In connection with its plea agreement with the Department of Justice, the Company agreed to pay $4.3 billion in penalty, including $1.8 billion as a criminal fine and $2.5 billion in disgorgement.  The Company’s founder also pled guilty to similar AML violations and agreed to resign as the Company’s Chief Executive Officer.

On November 14, 2023, the Securities and Exchange Commission announced a settled enforcement action against Charter Communications, Inc. (“Company”) imposing a $25 million civil penalty over allegations that the Company had used stock buyback plans that did not comport with Rule 10b5-1 of the Securities Exchange Act of 1934.  The SEC claimed that the Company’s stock buyback plans did not comport with Rule 10b5-1 because the plans contained provisions that allowed the Company to change the total dollar amounts available to buy back stock and the timing of buybacks after the plans took effect; and while Rule 10b5-1 is a safe harbor rather than a standard that must be met, the SEC alleged that the use of buyback plans that did not meet the Rule 10b5-1 standard evidenced insufficient accounting controls in violation of Section 13(b)(2)(B) of the Exchange Act.

On October 30, 2023, the Securities and Exchange Commission filed claims against a software company (the “Company”) and its Chief Information Security Officer for alleged fraud and internal control failures relating to known cybersecurity risks and vulnerabilities.  SEC v. SolarWinds Corp., et al., No. 23-cv-9518 (S.D.N.Y. Oct. 30, 2023).  The SEC’s complaint alleges that the Company made misleading omissions, in connection with its disclosure in December 2020, that it had suffered a cyberattack that compromised its customers’ information.

On October 17, the Commodity Futures Trading Commission’s Division of Enforcement released an advisory instruction to CFTC staff for future enforcement actions.  The advisory provided guidance on the following:  (i) whether proposed civil monetary penalties are sufficient; (ii) circumstances when the imposition of a corporate compliance monitor is appropriate; (iii) what duties and responsibilities of monitors should be; and (iv) whether admissions should be recommended in a particular enforcement action.  While the guidance leaves ample room for interpretation and development over time, the unambiguous thrust is to send a message that the CFTC is seeking to increase the severity of sanctions, both in terms of the size of monetary penalties and associated undertakings, continuing a trend that the CFTC has been pushing for several years.

On September 13, 2023, the U.S. Securities and Exchange Commission brought a settled enforcement action against Stoner Cats 2 LLC for raising approximately $8 million through an unregistered offering of Non-Fungible Tokens (“NFTs”) that the SEC alleged were securities.  This action is another example of the SEC alleging that crypto assets were securities based on the specific manner in which they were offered.

On September 11, 2023, the U.S. Securities and Exchange Commission announced settled enforcement actions against nine separate investment advisory firms for alleged marketing rule violations, assessing a total of $850,000 in combined penalties.  In each case, the SEC alleged that the firms improperly provided hypothetical performance information on their firm websites without following the requirements of the marketing rule.

On September 27, 2023, the Securities and Exchange Commission announced settled enforcement actions against six officers, directors and major shareholders of various public companies for allegedly failing to timely report information about their holdings and transactions in company stock, and simultaneously announced settled actions against five public companies for allegedly contributing to these insiders’ filing failures or for failing to report their insiders’ filing delinquencies.  The actions are part of a recent SEC enforcement initiative aimed at ensuring compliance with ownership disclosure rules by company insiders.

On October 4, 2023, Deputy Attorney General Lisa O. Monaco announced a Department of Justice-wide safe harbor policy for voluntary self-disclosures made in connection with mergers and acquisitions.  During her remarks at the Society of Corporate Compliance and Ethics’ 22nd Annual Compliance and Ethics Institute, the Deputy Attorney General said that the Safe Harbor provides companies with the presumption that the DOJ will decline criminal prosecution when they voluntarily self-disclose misconduct by companies they are acquiring or have recently acquired.

On September 11, 2023, the Justice Department’s National Security Division (the “Division”) announced that it had made key appointments to lead the Division’s Corporate Enforcement program.  The new appointees include Ian Richardson as the first Chief Counsel for Corporate Enforcement and Christian Nauvel as Deputy Chief Counsel for Corporate Enforcement.  Richardson and Nauvel will be tasked with overseeing the Division’s investigation and prosecution of corporate crime deemed to relate to U.S. national security.  The Division had previously announced the establishment of these positions in March 2023, when Deputy Attorney General Lisa Monaco also announced that the Division would add more than 25 prosecutors to investigate and prosecute sanctions evasion, export control violations and other such economic crimes.

On August 25, 2023, the Securities and Exchange Commission (“SEC”) accepted an Offer of Settlement (the “settlement”) from 3M Company (“3M”), related to alleged violations of the Foreign Corrupt Practices Act’s (“FCPA”) books and records and internal accounting control provisions (§§ 13(b)(2)(A) – (B) of the Securities Exchange Act of 1934).  Without admitting or denying the findings, 3M agreed to pay $6,581,618 to resolve allegations that 3M’s China subsidiary (“3M-China”) improperly accounted for overseas trips it provided to 3M-China’s customers who were employed by Chinese state-owned entities (SOEs).  According to the SEC, 3M-China invited SOE customers, who are deemed foreign officials under the FCPA, “to attend overseas conferences, educational events, and health care facility visits … ostensibly as part of 3M-China’s marketing and outreach efforts, but that in fact were often a pretext to provide overseas travel, sightseeing and entertainment … to the Officials to obtain and retain business from the SOE Customers.”

On August 10, 2023, the U.S. Securities Exchange Commission (“SEC”) and the Department of Justice (“DOJ”), in coordination with Columbian authorities, announced that Colombian conglomerate Grupo Aval Acciones y Valores S.A (“Grupo Aval”) and its banking subsidiary Corporacion Financiera Colombiana S.A. (“Corficolombiana”) agreed to pay approximately $80 million USD for their alleged involvement in a scheme to pay $23 million USD in bribes to high-ranking government officials in Colombia, in violation of the anti-bribery provisions of the Foreign Corrupt Practices Act (“FCPA”).  In resolving these allegations, Corficolombiana entered into a three-year Deferred Prosecution Agreement (“DPA”) with the DOJ, and agreed to pay a $40.6 million USD criminal penalty, up to half of which may be credited against payments to the Columbian government.

On July 31, 2023, United States District Court Judge for the Southern District of New York Judge Rakoff, denied cryptocurrency company Terraform Labs, Pte Ltd. (“Company”) and its founder’s motion to dismiss a suit that had been brought against them by the Securities and Exchange Commission (the “SEC”).  The SEC sued the Company and its founder in February 2023 after the Company’s algorithmic stablecoin collapsed in May 2022, contributing to multiple bankruptcies.  The SEC alleged that the Company and its founder made false and materially misleading statements to entice U.S. investors to purchase and hold on to the Company’s products, which the SEC claimed were unregistered investment-contracts that qualified as securities under Section 5 of the Securities Act of 1933 (the “Securities Act”).  SEC v. Terraform Labs Pte. Ltd., 2023 WL 4858299, at *1 (S.D.N.Y. July 31, 2023).  The Court held that the SEC had alleged a plausible claim for relief, and enough facts to establish the cryptocurrencies at issue were investment contracts requiring registration under the securities laws.

On July 13, 2023, Judge Analisa Torres of the United States District Court for the Southern District of New York issued a decision on the parties’ cross-motions for summary judgment in SEC v. Ripple Labs, Inc., No. 1:20-cv-10832-AT-SN, holding that Ripple Labs, Inc. (the “Company”) unlawfully sold unregistered securities in violation of the Securities Act of 1933 (the “Securities Act”) by selling its cryptocurrency token, XRP, to certain institutional buyers, while at the same time holding XRP was not a security within the meaning of the Securities Act when sold on digital asset exchanges, given the different circumstances and expectations of buyers in those transactions.  The Court also held that the Company’s distributions of XRP to employees and third parties for the development of its project did not constitute sales of unregistered securities.  This is a pivotal decision for the cryptocurrency market and is a significant win for cryptocurrency exchanges in particular.

On July 5, the United States Court of Appeals for the D.C. Circuit granted an emergency injunction blocking the Financial Industry Regulatory Authority (“FINRA”) from halting the securities business of Alpine Securities Corporation (the “Company”) through an expedited hearing process pending the Company’s appeal challenging the constitutionality of FINRA’s enforcement proceedings.  Alpine Securities Corporation, et al v. Financial Industry Regulatory Authority, Inc., 1:23-cv-01506-BAH (July 5, 2023).  While noting that this was not a decision on the merits, the court found that the Company had shown a likelihood that it will succeed on the merits in its challenge to the structure of FINRA enforcement actions, having at this early stage “raised a serious argument that FINRA impermissibly exercises significant executive power.”

On June 30, 2023, the United States Supreme Court agreed to hear an appeal regarding the constitutionality of administrative proceedings in the case of George Jarkesy and Patriot28 LLC v. SEC, which could have important ramifications on how federal agencies bring actions against alleged wrongdoers.  This grant of certiorari stems from a May 18, 2022, Fifth Circuit decision, Jarkesy v. Sec. & Exch. Comm’n, 34 F.4th 446 (5th Cir. 2022), which held that the use of administrative proceedings by the Securities and Exchange Commission (“SEC”) was unconstitutional, but its reasoning could also impact proceedings before the Federal Trade Commission and other agencies.

On June 7, 2023, a United States District Judge in the Southern District of Texas dismissed conspiracy charges related to Foreign Corrupt Practices Act (“FCPA”) and money laundering violations brought against Paulo Jorge Da Costa Casquiero Murta (“Murta”) by the Department of Justice, finding that prosecutors had intentionally caused delays in Murta’s trial, in violation of both the Speedy Trial Act and Murta’s Sixth Amendment right to a speedy trial.  United States v. Murta, 4:17-CR-00514-8 (S.D. Tex. June 6, 2023).  Murta, who had been in U.S. custody since July 2021, argued that despite his repeated demands for a speedy trial, the government had intentionally delayed his trial.  The Court agreed and dismissed the charges against Murta with prejudice, finding that DOJ’s prosecutors had acted in bad faith.
 

On May 31, 2023, the United States Securities and Exchange Commission (SEC) fined a New York investment adviser (Investment Adviser) $1.4 million for allegedly failing to disclose conflicts of interest regarding special purpose acquisition companies (SPACs).  In the Matter of RTW Invs., L.P., SEC Administrative Proceeding 3-21473 (May 30, 2023).  According to the SEC, Investment Adviser personnel sponsored two separate SPACs while those same personnel simultaneously invested client funds in the SPACs, which the SEC alleged was a conflict of interest that required disclosure.  The Investment Adviser neither admitted nor denied the allegations in the SEC’s Order.
 

On June 1, 2023, the Supreme Court issued a unanimous decision in the consolidated cases United States v. SuperValu Inc. and United States v. Safeway, Inc. holding that the False Claims Act’s (“FCA”) scienter element refers to a defendant’s knowledge and subjective beliefs—not what an objectively reasonable person would have known or believed.  No. 21-1326 (June 1, 2023).

Two facially unrelated decisions, issued last week by the First Circuit and the Supreme Court, continued a recent theme of courts pushing back against potential prosecutorial overreach in the application of fraud statutes—especially in the area of honest services fraud.  In the first case, the First Circuit reversed the convictions of two “Varsity Blues” parents who had been found guilty of honest services fraud, among other charges, after paying money to individuals to help get their children into college under false pretenses.  And in the second case, the United States Supreme Court unanimously reversed the conviction of Joseph Percoco, a former manager of former New Governor Andrew Cuomo’s re-election campaign who had likewise been found guilty of honest services fraud, unanimously holding that the jury instructions used to convict him were too vague and would sweep in too much innocent conduct.

On May 11, 2023, the Securities and Exchange Commission (“SEC”) announced that Netherlands-based Koninklijke Philips N.V. (“Philips”) will pay more than $62 million to resolve claims that it violated the Foreign Corrupt Practices Act (“FCPA”) with respect to alleged conduct related to its sales of medical diagnostic equipment in China.  Admin. Proc. File No. 3-21411.  According to the SEC, Philips’ subsidiaries in China used special price discounts with distributors that created a risk that excessive distributor margins could be used to fund improper payments to employees.  Philips neither admitted nor denied wrongdoing as part of the settlement.

On May 1, 2023, the United States Supreme Court granted a writ of certiorari filed by alleged whistleblower against his former employer, a financial institution, in a case that is expected to clarify when the termination of a whistleblower amounts to unlawful retaliation under the Sarbanes-Oxley Act.

On April 14, 2023, the United States Supreme Court issued a unanimous decision in the consolidated cases of Axon Enterprises Inc. v. FTC and SEC v. Cochran, finding that constitutional challenges to the ability of the Federal Trade Commission (“FTC”) and the U.S. Securities and Exchange Commission (“SEC”) to bring certain claims as administrative proceedings can bypass the administrative appeals process and be brought directly in federal court. The Court concluded that the authorizing statutes of the regulatory agencies do not implicitly restrict federal district courts of original jurisdiction to hear any challenges to an agency’s constitutionality. Thus, although the Court did not decide the substance of the petitioners’ constitutional challenges to the agencies’ administrative proceeding processes, it allowed petitioners’ challenges to move forward in federal court.

On March 27, 2023, the Commodity Futures Trading Commission (“CFTC”) filed a civil enforcement action against three entities that operate a digital asset exchange (the “Company”) and its Founder and Chief Executive Officer (collectively “Defendants”) for willful violation of the Commodity Exchange Act (“CEA”) and CFTC regulations. Further, the CFTC charged the Company’s Former Chief Compliance Officer with aiding and abetting these violations. See Complaint, Commodity Futures Trading Comm’n v. Zhao, et al., Civil Action No. 1:23-cv-01887 (N.D. Ill. Mar. 27, 2023).

On March 28, 2023, the Securities and Exchange Commission (“SEC”) submitted a settlement agreement (“settlement”) to the United States District Court of the Eastern District of New York with Brazilian mining company Vale S.A. (“Vale” or “Company”). Under the settlement, without admitting or denying the findings, the Company will pay a total of $55.9 million to resolve charges brought against it by the SEC on April 28, 2022, regarding the Company’s allegedly false and misleading representations in its environmental, social, and governance (“ESG”) disclosures. The SEC averred in its complaint that the Company concealed the unsafe condition of its dams, which caused its ESG disclosures to be materially false and misleading for investors. See SEC v. Vale S.A., Case No. 22-cv-2405-LDH-SJB (Mar. 28, 2023).

On March 2, 2023, the Department of Justice (“DOJ”) announced that a multinational telecommunications company headquartered in Stockholm, Sweden (the “Company”) agreed to plead guilty and to pay a penalty of approximately $206 million after allegedly breaching the cooperation and disclosure provisions of a 2019 Deferred Prosecution Agreement (“DPA”) it had previously entered into to address claims that it participated in a scheme to pay bribes, falsify books and records, and failed to implement reasonable internal accounting controls in violation of the Foreign Corrupt Practices Act (“FCPA”).

On March 1, 2023, the Department of Justice (“DOJ”) unsealed an indictment against the founder, CEO, and Chairman of a publicly traded health care company (the “Company”), alleging that he had illegally executed trades pursuant to Rule 10b5-1 trading plans while in possession of material nonpublic information. The Securities and Exchange Commission (“SEC”) filed a concurrent civil suit against defendant for the same activity. In each case, the government alleged that defendant improperly used his 10b5-1 plans by entering into them while in possession of material nonpublic information and triggering sales shortly thereafter, without any form of cooling-off period.

On March 15, 2023, the Department of Justice (“DOJ”) announced that Michigan-based bank Sterling Bancorp, Inc. (“Sterling”) agreed to plead guilty to securities fraud for allegedly filing false statements relating to its 2017 initial public offering (“IPO”) and 2018 and 2019 annual financial reports. As part of its guilty plea, Sterling agreed to pay fines totaling $69 million, including $27.2 million in restitution to non-insider stockholders.

On January 9, 2023, the Securities Exchange Commission issued a cease-and-desist order against McDonald’s Corporation and the Company’s former CEO Stephen Easterbrook related to Easterbrook’s departure. The SEC’s order alleged that the Company failed to disclose in a Form 8-K that it exercised discretion in terminating Easterbrook “without cause,” and allowed him to retain more than $40 million in equity-based compensation that would have been forfeited if the company had terminated him “for cause;” and further alleged that Easterbrook withheld information about his relationships with Company employees in an internal investigation. Without admitting or denying the findings, the Company and Easterbrook consented to the entry of the Order. See In re Easterbrook & McDonald’s Corp., No. 3-21269 (Jan. 9, 2023).