Welcome to Compliance Hot Spots, our weekly summary of news and analysis on regulatory, compliance and enforcement trends. This week we're highlighting: S.F. firms scooping up ex-prosecutors; New Wachtell compliance advisory and Microsoft's FCPA settlement. Scroll down for Who Got the Work, and all the new moves.

Tips, feedback and general thoughts on your practices are always appreciated. I'm C. Ryan Barber—reach me at [email protected] and 202-828-0315, or follow me on Twitter @cryanbarber. Thanks for reading!

Big Law Eyes White-Collar Lawyers in S.F.

Experienced white-collar practitioners are becoming hot commodities among the law firms seeking to represent tech-focused clients, my colleague Xiumei Dong reports.

• According to data compiled by ALM Intelligence, 19 law firms made a total of 31 white-collar lateral hires in the Bay Area within the first half of 2019, including six partners.

• “I have certainly noticed an uptick in the growth of white-collar practices within law firms already here in the Bay Area,” said Robb Adkins, managing partner of Winston & Strawn's San Francisco office, who has been building out the firm's white-collar practice.

• Jeffrey Tsai, who joined DLA Piper last March from Alston & Bird, said white-collar prosecution activity has mirrored the growth of businesses within the region over the course of the years. “Much like the story of Northern California itself, you are seeing peaks in the Valley. Among those peaks, you see some of the things that are splashed across headlines across the world,” he said.

• Several Am Law 100 firms have hired former government prosecutors to bolster their white-collar defense capabilities in the Bay Area. They include David Callaway, a former chief of the criminal division of the U.S. Attorney's Office for the Northern District of California who joined Goodwin Procter from Baker McKenziein May; Marisa Chun, a former DOJ lawyer who joined Crowell & Moring in April from McDermott Will & Emery; and Jina Choi (above), a former director of the San Francisco regional office of the SEC who joined Morrison & Foerster in March.

Wachtell Memo: No Compliance Complacency

The Trump-era drop in white-collar enforcement has been well-documented (if disputed by federal agencies themselves). “The latest available data from the Justice Department show that during January 2019 the government reported 337 new white collar crime prosecutions—an historic low,” the Transactional Records Clearinghouse at Syracuse University reported earlier this year.

A team from Wachtell, Lipton, Rosen & Katz—John Savarese, Ralph Levene, David Anders and Marshall Miller—recently published a client memo advising companies not to “tempted to think that having an effective compliance program is less urgent and less important than in the past.” The Wachtell lawyers wrote: “Our experience suggests that succumbing to such temptation would be a mistake.” They said “now is arguably the best time” for an investment in compliance.

They offered four developments to make their case:

• “The Department of Justice and other law enforcement authorities—through various policy pronouncements and speeches over the past 18 months—have made their white-collar decision-making process more transparent.”

• “The record of corporate dispositions over the past two years illustrates the dramatic differences in how the government rewards on the one hand, and punishes on the other, the range of corporate responses to underlying misconduct.”

• The Justice Department's new guidance about compliance expectations could “reward” corporate efforts to improve compliance programs.

• “Foreign governments and state attorneys general have become far more active than in the past and now seek more aggressively to bring cases, either alongside U.S. authorities or even in situations where federal authorities have chosen not to act.”

“In our experience, effective compliance programs provide a real opportunity to prevent misconduct from arising in the first place or nipping potential legal and compliance issues in the bud before they blossom into a full-blown corporate crisis,” the Wachtell memo said.

Who Got the Work: Microsoft FCPA, Q2 Federal Lobbying & SCOTUS Securities Case

>> A Latham & Watkins team that included Kathryn Ruemmler (above) and Jonathan Su represented Microsoft Corp. with Darryl Lew and Courtney Hague Andrews, both of White & Case, in resolving foreign-bribery claims. The company agreed to pay $25 million to settle FCPA claims over alleged bribery in Hungary. “As a company, we do not tolerate employees and partners who willfully break policies that go to fundamental issues of business and integrity,” Brad Smith, Microsoft's president and chief legal officer, added in an email to employees. Smith's email said the company was “deeply disappointed and embarrassed.” Read the Justice Department's nonprosecution agreement here.

>> Brownstein Hyatt Farber Schreck has edged out Akin Gump Strauss Hauer & Feld as the nation's top-grossing federal lobbying practice for the second quarter of 2019, according to results the firms shared Monday. Ryan Lovelace reports at Law.com that Brownstein said it raked in $10,070,000 in second quarter lobbying revenue, while Akin Gump reported $10,060,000. The $10,000 difference may be slight, but Brownstein said it represents the first time the firm is poised to lead the quarterly revenue rankings among federal lobby shops

>> Sullivan & Cromwell's Matthew Schwartz is counsel of record to a group of securities-law professors who are backing a Utah businessman named Charles Scoville, who's urging the U.S. Supreme Court to dial back a Tenth Circuit decisionthat embraced the global reach of certain antifraud provisions of the securities laws. John Williams of Williams & Connolly is counsel for the petitioner.

>> Venable counsel Annie Kierig has registered to advocate for Qatar, per a new U.S. Justice Department filing. Venable said it will “provide government relations services for Qatar with regard to bilateral issues pertaining to the relationship between Qatar and the United States. Such services may include outreach to the United States Congress and federal government.” Kierig is counsel in the firm's legislative affairs and government affairs practice in Washington.

>> A team from Invariant has signed up to lobby for Apple Inc. on “issues related to privacy and encryption, intellectual property and copyright, and competition; educate Members of Congress about supply chain protocols.” The lobbying team includes Heather Podesta, founder and CEO of the firm and a former Blank Romepartner; Anne MacMillan, a former policy advisor to Rep. Nancy Pelosi; and Eric Rosen, a former federal prosecutor in California.

>> “Amazon's cloud services business recently hired one of President Donald Trump's campaign bundlers, Jeff Miller, to lobby on its behalf, according to a recently posted disclosure form,” CNBC reports. Miller will advise on “issues related to cybersecurity and technology.

Compliance Reading Room

>> Freshman Democrat Katie Porter IS Stirring Up Trouble for Trump. Porter, above, has “emerged as a viral star when it comes to how banks and the government treat the working poor and puncturing Trump's claims about the economy.” [CNN]

>> Sanctions Shift Sparks Boon for Big—and Little—Law. “Law firms big and small are benefiting from a surge in sanctions-related defense and advisory work as the U.S. regime grows more complex and enforcement gets tougher under the Trump administration. Driving demand are recent changes to nearly two-dozen sanctions programs—including Cuba, Venezuela and Iran—and a greater threat of both civil and criminal penalties. Companies, especially those with cross-border operations, are flooding law offices with requests for help.” [Bloomberg Law]

>> Five Compliance Lessons from Walmart's FCPA Settlement. First on the list: “An anti-corruption compliance program on paper is meaningless without controls.” [Compliance Week]

>> EPA's Watchdog Is Scrutinizing Ethics Practices of Agency's Former Air Policy Chief. “The EPA's inspector general is looking at [Bill] Wehrum's interactions with his former law firm as well as several of its clients, who rank among the nation's major emitters of greenhouse gases linked to climate change, according to two individuals who spoke on the condition of anonymity due to the sensitivity of the matter.” [The Washington Post] The New York Times has more here. Wehrum formerly was a partner at the predecessor firm Hunton & Williams and head of the firm's administrative law group.

>> NY Judge Grants DOJ Motion to Toss False Claims Case, Ducking Debate Over Proper Test. “Despite objections from the whistleblower, a physician and former investment fund executive named John Borzilleri, that DOJ failed to investigate his allegations, Judge Furman decided that the government was not obliged to continue to sink resources into a case it considered hopeless. His ruling is the latest win for the DOJ in its recent campaign to cull FCA whistleblower suits.” [Reuters] Read the decision here.

Notable Moves & Announcements

• Deutsche Bank has hired attorney Stefan Simon to join its management board Aug. 1 to take charge of the bank's legal and regulatory affairs during a time of turmoil and rebuilding. Simon replaces Sylvie Matherat, the former chief regulatory officer, my colleague Sue Reisinger reports at Law.com. Simon, formerly a partner at Germany-based Flick Gocke Schaumburg, joined Deutsche's external supervisory board three years ago and chaired its integrity committee.

• Rizwan Qureshi (at left) is embarking on his third tour at Reed Smith, this time as a partner in Washington, my colleague Ryan Lovelace reports. Michael Lowell, co-leader of Reed Smith's global regulatory enforcement practice, said in a statement: “Our government investigations team recently has been exceptionally busy with a number of high-profile matters.” Qureshi declined to say which other firms and companies he considered joining, but said his prosecutorial experience meant he had several opportunities in private practice and in-house.

• Baker McKenzie has brought on two longtime DLA Piper partners in Los Angeles, Perrie Weiner and Edward Totino. Weiner will serve as the partner in charge of Baker McKenzie's Los Angeles office and chair of the firm's North America securities litigation group. Totino is joining as a partner in the same practice.

• Morgan Lewis has hired white-collar and False Claims Act litigators Douglas Baruch and Jennifer Wollenberg as partners in Washington. They arrive from Fried, Frank, Harris, Shriver & Jacobson, where Baruch led the FCA and Financial Institutions Reform, Recovery, and Enforcement Act practice.

• Joseph Tuso has departed Stabilis Capital Management to return to familiar surroundings at Reed Smith, where he worked for a decade earlier in his career, my colleague Patrick Bantz reports. Tuso joins Adam Solowsky, who last week became a member of Reed Smith's financial industry group after leaving his position as managing director and managing counsel at Bank of New York Mellon.

• Baker Hostetler has hired Marc Schildkraut, most recently of Cooley, as an antitrust partner in the firm's Washington office. Schildkraut was previously an assistant director in the Federal Trade Commission's competition bureau.