December 5, 2019

Leading Federal Officials Offer Advice on How Corporations Can Minimize Law Enforcement Risk

Holland & Knight Alert
Wifredo A. Ferrer | David L. Haller


  • The Second Annual Florida Enforcement Summit, hosted by Holland & Knight, the Florida Chamber of Commerce and the Miami-Dade Beacon Council, focused on informing the business community how to minimize law enforcement risk in light of current enforcement priorities.
  • Summit speakers included U.S. Attorney for the Southern District of Florida Ariana Fajardo Orshan, U.S. Securities and Exchange Commission Regional Director Eric Bustillo and Florida Solicitor General Amit Agarwal.
  • The speakers shared their insights on recent enforcement trends and initiatives, as well as on how companies can best minimize enforcement risk and navigate federal investigations.

Holland & Knight, the Florida Chamber of Commerce and the Miami-Dade Beacon Council hosted the Second Annual Florida Enforcement Summit on Nov. 20, 2019. The half-day program focused on informing the business community how to minimize law enforcement risk in light of current enforcement priorities.

Guest speakers at the Second Annual Florida Enforcement Summit included:

Panelists from Holland & Knight included:

  • Miami Partner Wifredo Ferrer, former U.S. Attorney for the Southern District of Florida
  • Miami Partner Mitchell Herr, former Regional Chief Trial Counsel, SEC

Guest Speaker Highlights

Recent Enforcement Trends and Initiatives

Ariana Fajardo Orshan

Fajardo Orshan, who serves as the U.S. Attorney for the Southern District of Florida, the lead federal law enforcement officer in South Florida, shared her insights into recent enforcement trends and initiatives.

  • New DOJ Task Force on Market Integrity and Consumer Fraud: Fajardo Orshan stated that a key focus of the U.S. Department of Justice (DOJ) is preventing and prosecuting business crimes. This focus is underscored by the DOJ's 2018 creation of a new Task Force on Market Integrity and Consumer Fraud, which is part of a government-wide initiative to combat fraud against consumers and corporate fraud that victimizes the general public and the government.
  • Increase in Civil Qui Tam Actions: Fajardo Orshan indicated that, increasingly, frauds against the government have not just been prosecuted criminally by the DOJ but also civilly. Indeed, she noted that there has been a considerable increase in the number of civil qui tam actions – actions in which individuals bring lawsuits on behalf of the United States to recover penalties and damages from individuals and businesses who have committed fraud. Lately, these civil qui tam actions have been concentrated in the government contracts sector.
  • New DOJ Procurement Collusion Strike Force: Reiterating that government contracting is a DOJ enforcement priority, Fajardo Orshan noted the DOJ's Nov. 5, 2019, announcement regarding the formation of a Procurement Collusion Strike Force. The Strike Force is dedicated to deterring, detecting, investigating and prosecuting bid-rigging conspiracies as well as other crimes in government procurement and other federally funded programs. The Strike Force will involve prosecutors from the DOJ's Antitrust Division and 13 U.S. Attorney's Offices, including the U.S. Attorney's Office for the Southern District of Florida.
  • New South Florida Anti-Money Laundering Section: Moving from national initiatives and trends to those specific to South Florida, Fajardo Orshan announced that the U.S. Attorney's Office for the Southern District of Florida has formed a new Money Laundering Section. The new section will focus on how foreign capital is coming into American businesses and the American real estate market to ensure that foreign criminals are not able to launder the proceeds of their misconduct via the purchase of American assets.
  • Cybersecurity Enforcement Cooperation: Fajardo Orshan stated that the DOJ and SEC have benefited from considerable interagency cooperation in the past and that, in the future, the two agencies plan to continue cooperating as they pursue new areas of illegal activity. For example, Fajardo Orshan noted that the DOJ and the SEC plan to collaborate as they work to enforce federal laws and regulations related to cybersecurity, and that the South Florida offices of the two agencies will meet again in the coming weeks to discuss cybersecurity enforcement.

Eric Bustillo

Bustillo, who serves as the Regional Director of the SEC's Miami Regional Office, the lead SEC enforcement official in Florida, Mississippi, Louisiana, Puerto Rico and the U.S. Virgin Islands, shared his insights into recent enforcement trends and initiatives.

  • New Cyber Unit: Bustillo announced that the SEC has formed a dedicated Cyber Unit that focuses exclusively on cyber-related threats and misconduct, allowing the SEC to deepen its expertise in an area requiring an ever-increasing share of the SEC's time and resources.
  • Whistleblower Program: The SEC's Whistleblower Program, which was established in 2012, continues to be one of the SEC's most powerful enforcement tools. Under this program, where a whistleblower's information leads to an enforcement action in which over $1 million in sanctions is collected, the SEC is authorized to award the whistleblower between 10 percent and 30 percent of the money collected. In 2018, the SEC awarded $39 million to a single whistleblower. And in 2019, the SEC awarded $37 million to another whistleblower. To date, the SEC has awarded over $387 million to whistleblowers. In light of the powerful incentives for individuals with information about misconduct to come forward, Bustillo stated that if companies do not take reports of wrongdoing seriously and address them quickly, they run the risk that a whistleblower will come forward first and that the SEC will come knocking.

Corporate Compliance Programs and Cooperation Credit

Both Fajardo Orshan and Bustillo shared advice as to how companies can best minimize enforcement risk and navigate federal investigations.

Eric Bustillo

  • Bustillo began by discussing what the SEC looks for in corporate compliance programs. When Bustillo evaluates a compliance program, he looks first at whether the corporation has the right kind of controls for that kind of company.
  • If the company's policies are right for a company of its size, in its industry and with its business model, Bustillo looks to see whether company management understands and consistently promotes the company's compliance program. In Bustillo's view, an effective compliance program should not just be adopted but rather be fully implemented. The compliance policies should not just be taught once but should be reinforced through ongoing training. Finally, the compliance program should not be considered only when making personnel decisions with regard to current employees but also with regard to the hiring of new employees.
  • If the company's compliance program passes muster on each of those measures, the SEC still expects the company to continually evaluate its compliance program to ensure that, as the company's business evolves, the company's compliance program evolves along with it and does not become obsolete. As a company evolves and enters into new business sectors, the company must ensure that it has the right compliance program for the regulatory regimes under which it is operating, whether they be state, federal, securities and/or healthcare, etc.

Ariana Fajardo Orshan

  • Fajardo Orshan echoed the themes that Bustillo highlighted in his remarks on compliance programs. In her view, it is essential that companies adopt compliance programs that are tailored to their specific businesses. If a company is unsure as to whether it has adopted such a program, Fajardo Orshan recommended that the company seek the advice of third-party compliance professionals.
  • As Fajardo Orshan made clear in her remarks, the DOJ looks not just at whether companies have well-tailored compliance programs but also at whether a company's compliance program was adopted in good faith with the intent to prevent misconduct and whether the compliance program has worked in the past.
  • Fajardo Orshan went on to note that companies looking to avoid enforcement risk need to pay attention not just to the policies they have in place but also to the people responsible for ensuring compliance. Companies should make sure that they hire the right people and that they consistently provide them with the training necessary to identify, remediate and prevent misconduct.

About Our Teams

If you have questions about any of the topics covered during the panel discussion, Holland & Knight's Global Compliance and Investigations, White Collar Defense and Investigations, Data Strategy, Security & Privacy, and Consumer Protection Defense and Compliance teams can provide additional information. All four teams are comprised of individuals with extensive experience handling DOJ, SEC, Federal Trade Commission (FTC), Consumer Financial Protection Bureau (CFPB), State Attorneys General and other regulatory investigations. Our attorneys can provide advice not just on how to navigate those investigations once they begin but also on how to avoid them in the first place.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem. Moreover, the laws of each jurisdiction are different and are constantly changing. If you have specific questions regarding a particular fact situation, we urge you to consult competent legal counsel.

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