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District Court Rejects Challenges to ITAR Criminal Charges

District Court Rejects Challenges to ITAR Criminal Charges

On July 9, 2024, District Judge David Hale in Kentucky denied motions to dismiss and motions to suppress filed by four defendants against a criminal case involving ITAR charges for illegal exports of sensitive, defense-related diagrams to Chinese companies. The Justice Department has charged Quadrant Magnetics LLC and three executives, Phil Pascoe, Scott Tubbs, and Monica Pascoe in a nine-count indictment for the illegal shipment...

SEC Expands Internal Controls Provision to Cover Cybersecurity Incidents and Reaches $2.1 Million Settlement with R.R. Donnelley & Sons Co.

SEC Expands Internal Controls Provision to Cover Cybersecurity Incidents and Reaches $2.1 Million Settlement with R.R. Donnelley & Sons Co.

In a significant expansion of internal controls enforcement, the SEC announced a $2.1 million settlement with R.R. Donnelley & Sons Co. (“RRD”) for its handling of a 2021 ransomware attack and resulting disclosure failures.  The settlement represents the SEC’s first application of its internal controls enforcement authority to include cybersecurity policies and procedures.  In 2021, RRD suffered a cyber attack in which a threat actor...

OFAC Amends SDN and SSI List Entries to Incorporate Secondary Sanctions Warnings

OFAC Amends SDN and SSI List Entries to Incorporate Secondary Sanctions Warnings

On July 3, 2024, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“OFAC”) announced that it had amended entries for a multitude of entities sanctioned under the Treasury’s Russian Harmful Foreign Activities Sanctions regime. The updated designations for the entities—all of which are referenced on either OFAC’s List of Specially Designated Nationals and Blocked Persons (“SDN List”) or the Sectoral Sanctions Identifications...

Webinar: Building an Effective Cybersecurity Governance and Risk Mitigation Program

Webinar: Building an Effective Cybersecurity Governance and Risk Mitigation Program

July 30, 2024, 12 Noon EST Sign Up Here Companies have identified cybersecurity risks as the number one threat to their organizations. Companies are experiencing an increasing number of cybersecurity incidents. As a result, companies face serious regulatory enforcement actions, reputational harm and collateral damage. To mitigate these risks, companies have to build an effective cybersecurity program, including governance requirements, policies and procedures, and comprehensive...

Episode 329 — Bryn Sedlacek from Aravo on TPRM Holistic Risks and Unitary Visibility

Episode 329 — Bryn Sedlacek from Aravo on TPRM Holistic Risks and Unitary Visibility

Bryn Sedlacek, Vice President, Product Management at Aravo, joins us on the podcast to discuss third-party risk management with a focus on holistic risks and unitary visibility. In a wide-ranging discussion, Mike Volkov and Bryn Sedlacek discuss the challenges in implementing a third-party risk management program that captures holistic risks and maintains a consistent, unified line of sight across the organization’s risk profile. As part...

Supreme Court Continues to Pare Back Criminal Laws

Supreme Court Continues to Pare Back Criminal Laws

In a pair of rulings issued near the end of the last Term, Fischer v. United States and Snyder v. United States, the Supreme Court continued to cut back on the Justice Department’s interpretation and enforcement of criminal laws. The Supreme Court continues to display a distrust or basic misunderstanding of prosecutorial discretion (one Justice referencing during oral argument the old adage that a prosecutor...

BIS Announces Settlement Agreement with Indiana University Over Export Control Violations

BIS Announces Settlement Agreement with Indiana University Over Export Control Violations

On June 24, 2024, the U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) announced the settlement of an administrative enforcement action involving Indiana University of Bloomington (“Indiana University”) over multiple violations of export controls spanning a four-year period. According to the settlement agreement publicized by BIS, Indiana University illegally exported genetically modified strains of fruit flies containing transgenes of a certain subunit of...

Supreme Court Strikes Down Chevron Deference Rule

Supreme Court Strikes Down Chevron Deference Rule

In a historic decision, the Supreme Court struck down the forty-year-old agency deference rule established in Chevron v. Natural Resources Defense Council.  In two separate decisions, the Supreme Court ruled in Loper Bright  Enterprises v. Raimondo and Relentless, Inc. v. U.S. Department of Commerce, the Court ruled that that § 706 of the Administrative Procedure Act (APA) gives courts the ultimate authority to interpret statutes...

Episode 328 — Sanctions Enforcement and Red Lines

Episode 328 — Sanctions Enforcement and Red Lines

In this new era of aggressive sanctions enforcement, companies have to understand the red lines that define where criminal and civil enforcement risk increase.  In contrast to the history of FCPA enforcement, DOJ and OFAC have provided helpful guidance to alert companies where risks are likely to increase. Sanctions enforcement involves an off mix of civil and criminal line drawing.  On the civil side, OFAC...

Supreme Court Rules SEC’s In-House Adjudication Is Unconstitutional

Supreme Court Rules SEC’s In-House Adjudication Is Unconstitutional

In a recent decision, Securities and Exchange Commission v. Jarkesy, the Supreme Court voted 6-3 to reject the Securities and Exchange Commission’s use of in-house administrative proceedings to adjudicate securities fraud claims.  The Supreme Court specifically ruled that the defendant in a securities fraud case has a Seventh Amendment right to a jury trial when the SEC seeks civil penalties against the defendant.  The Seventh...