Murphy & McGonigle partner Timothy Peterson comments in CoinDesk on trends in the ICO regulatory and enforcement environment.
Murphy & McGonigle partner Timothy Peterson comments in CoinDesk on a class action securities lawsuit following an ICO. The lawsuit alleges cryptocurrency failed to register as a security.
There is a sense in the United States that compliance professionals are moving into the crosshairs of government enforcement actions. For years, the government has sought to bring actions not only against those who committed the primary violations, but also against the so-called “gatekeepers;” the lawyers, the accountants, and now, the compliance professionals who the government believes facilitated the illegal misconduct. When misconduct is uncovered in a company, US enforcement officials will always ask, “Was the compliance system adequate?” Senior enforcement officials will ask their investigators whether the company took appropriate steps to detect and prevent misconduct in determining whether an action against the company is appropriate. The enforcement investigator will therefore take steps to evaluate the effectiveness of the compliance system. If the government finds the compliance system was inadequate, there appears to be a growing likelihood that US enforcement agencies will name an individual as responsible for that failure. As James Loonam, Deputy Chief of the Business & Securities Fraud Section in the US Attorney’s Office for the Eastern District of New York said recently at a conference, when the government gets a resolution against a company only, and not an individual, he considers that a failure.
Enforcement Defense Update: The Department of Justice (DoJ) today announced fines totaling $5.6 billion against five of the world’s largest banks related to the banks’ alleged manipulation of the foreign exchange markets (“forex”). The settlements are notable for a number of reasons; in particular, the settlements highlight the strong position the DoJ appears to be taking with respect to enforcement declinations and recidivism.
Pharmaceutical giant GlaxoSmithKline was fined $490 million earlier today by a court in China for violations of Chinese anti-corruption law. The bribery conviction also included criminal sentences for individual executives, including a suspended prison sentence and an ordered deportation for GSK’s British former head of China operations.
The start of the 2014 World Cup in Brazil has brought renewed interest to the issue of corruption in international sports. Allegations recently resurfaced concerning potential bribery associated with Qatar’s successful bid for the rights to the 2022 World Cup.