Compliance Hot Spots: Major US Firms Picked Up PPP Loans | New & Notable FARA Filings | Which Firm Turned Down Jeff Sessions | Who Got the Work | Akin Gump's New Hires
Welcome to Compliance Hot Spots, and good evening from Washington. We've got some new reporting on the firms that got PPP loans, and check out new and notable FARA registrations. Scroll down for major white-collar and regulatory headlines, and Who Got the Work. Thanks for reading!
July 07, 2020 at 09:00 PM
11 minute read
Good evening, and welcome back to Compliance Hot Spots, our weekly snapshot of white-collar enforcement, regulatory and news and trends. Thanks for reading, and we'd love your feedback. Contact C. Ryan Barber in Washington at [email protected] and at 202-828-0315. Follow @cryanbarber.
Major US Firms Picked Up PPP Loans
Thousands of law firms received loans under the federal government's coronavirus stimulus package, turning to the relief funds to dull the impact of a pandemic that has ravaged the economy.
Among the recipients were firms closely-tied to the Trump administration, including Harder LLP, which has sued media companies on the president's behalf and recently went to court to block the release of a damning book by his niece. Since January 2019, the Trump campaign has paid Harder LLP more than $3 million. The firm received a loan of between $150,000 to $350,000 under the Payroll Protection Program, saying the funding would help it retain 10 jobs.
White House Counsel Pat Cipollone's old firm Stein Mitchell Beato & Missner obtained PPP relief, as did the California-based tax firm Hochman Salkin Toscher Perez, at which IRS Commissioner Charles Rettig was previously a name partner.
At least 45 firms in the Am Law 200—among the highest-grossing firms in the country—reported obtaining PPP loans, ALM reported Monday. More than 1,500 law firms across the country obtained more than $1 million in relief, according to a searchable database designed by The Washington Post.
Also on the list of loan recipients were a host of plaintiffs firms and three of the country's top whistleblower firms.
Labaton Sucharow LLP received a loan of between $2 million and $5 million, saying the funding would help save 149 jobs. A partner at the firm, Jordan Thomas, represented the whistleblowers who in 2018 shared the largest bounty ever issued by the Securities and Exchange Commission: an $83 million award for information that led to a settlement with Bank of America Corp's Merrill Lynch.
Two other firms, Phillips & Cohen and Katz, Marshall & Banks, each received loans of between $350,000 and $1 million. In 2014, Phillips & Cohen partner Erika Kelton secured a more than $32 million bounty for a foreign whistleblower, in what was then a record-setting award from the SEC.
Katz, Marshall & Banks has been wrapped up in some of the biggest civil rights and whistleblower matters in recent years. The firm represented Christine Blasey Ford in connection with her sexual assault allegations against now-Justice Brett Kavanaugh during his confirmation proceedings. And the firm was more recently representing an ousted HHS scientist who resisted the use of unproven malaria drugs to combat the spread of COVID-19.
More reading on PPP loans…
>> "More than two dozen Washington lobbying, public affairs and consulting firms received loans from the federal government to help them weather the pandemic, according to data released on Monday by the Small Business Administration," Politico reported.
>> "A number of private-equity firms received millions of dollars in loans from a taxpayer-backed program despite being told they weren't allowed to access the money, an analysis of U.S. Small Business Administration data shows," WSJ reported.
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New & Notable in FARA: Steptoe's UK Advocacy
A team from Steptoe & Johnson LLP is now advising the HM Treasury, the U.K.'s economic and finance ministry, according to a recent disclosure. The Steptoe team said it will assist the HM Treasury about how to engage with the United States amid a U.S. Trade Representative investigation of digital service taxes that have been adopted, or are being considered, in various countries.
"President Trump is concerned that many of our trading partners are adopting tax schemes designed to unfairly target our companies," USTR Robert Lighthizer said in a statement in June announcing the investigation. "We are prepared to take all appropriate action to defend our businesses and workers against any such discrimination."
Phil West (above), chairman of Steptoe, is billing at $1,700 hourly, the new filing stated. "I bill in one-hour increments, although I do not generally bill time to a client for a given day if my services for that client during that day consist of only a brief phone call, consultation, or the like," West wrote.
New Steptoe partner Jeff Weiss, who joined the firm in March as co-leader of the international trade policy team, is billing at $1,300 hourly, according to Steptoe's filings. Weiss, who will be a leading attorney on the U.K. contract, spent more than 15 years "in senior legal, policy, diplomatic, negotiation, and political roles in the US government across three administrations," the firm said in announcing his arrival.
Other Steptoe lawyers on the work include: Robert Rizzi, a tax partner; John Cobb, a tax associate; Luke Tillman, a trade associate; Elizabeth Burks, managing director of the firm's government affairs and public policy team; and Kate Jensen, a government affairs associate.
Who Got the Work
>> Reed Smith partner A. Scott Bolden (above), who leads the firm's Washington office, is counsel to Elevate Credit Inc. in a consumer enforcement action brought by D.C. Attorney General Karl Racine's office. Elevate's lawyers last week removed the case from D.C. Superior Court to the federal trial court. The Reed Smith team also includes Maria Earley, James Martin and Travis Sabalewski.
>> Steptoe & Johnson LLP partner Michael Edney, chair of the firm's regulatory litigation practice, successfully argued for the Cigar Association for America Inc. in the U.S. Court of Appeals for the D.C. Circuit. The appeals court on Tuesday ruled for Edney's client in a case challenging FDA warning labels on cigars and pipe tobacco. The agency's failure to account for how the warning would affect the number of smokers violated the Tobacco Control Act and the Administrative Procedure Act, D.C. Circuit Judge Gregory Katsas wrote for the unanimous panel. Justice Department lawyer Lindsey Powell argued for the agency. Edney joined Steptoe last year from Norton Rose Fulbright, where he had been head of the white-collar defense group.
>> Covington & Burling vice chair Lanny Breuer was on the team counseling Alexion Pharmaceuticals Inc. in a US Securities and Exchange Commission enforcement action. "Alexion agreed to pay more than $21 million to resolve charges that it violated the books and records and internal accounting controls provisions of the Foreign Corrupt Practices Act," the agency said. Alexion did not admit or deny the SEC's findings. The SEC's Christina McGill and Brittany Hamelers conducted the investigation, which was supervised by Timothy England and Melissa Hodgman. The Covington team for Alexion also included partners Steve Fagell, Patrick Phelan and Gerald Hodgkins.
>> Cleary Gottlieb Steen & Hamilton partner David Gelfand advised Alimentation Couche-Tard Inc. and CrossAmerica Partners LP in a new FTC antitrust settlement. The companies did not admit liability. FTC lawyers Maribeth Petrizzi, Jeffery Dahnke and Kenneth Libby appeared for the agency. Gelfand was a deputy assistant attorney general for litigation in the DOJ's antitrust division from 2013 to 2016.
>> Jenner & Block partner Howard Symons in Washington registered to lobby for T-Mobile on various issues associated with covid-19. Symons joined the firm from the Federal Communications Commission, where he served as general counsel from 2016 to 2017.
Compliance Reading Corner
The Fall of Jeff Sessions, and What Came After. "According to three people familiar with the matter, shortly after leaving the Justice Department, [Jeff] Sessions entered talks to join the law firm Maynard Cooper & Gale, which was founded in Birmingham, Ala. With a longtime friend of Sessions's pulling for him on the inside, the deal seemed all but done. But ultimately, the firm's leadership decided against bringing him in, the news of which was broken to Sessions over dinner at Charlie Palmer's in Washington. 'People at Maynard obviously respect Jeff,' said one person with direct knowledge of the decision, speaking on the condition of anonymity. 'But I don't think, given the manner in which he left' the Justice Department, 'he could make the business case for how the work would follow.'" [NYT]
Federal Prosecutors Discussed 'Burying' Evidence In Troubled New York Case. "Federal prosecutors under scrutiny for failing to turn over favorable evidence to a defendant told a judge they didn't act in bad faith, even as they disclosed internal emails in which they discussed whether they might try to 'bury' a document they were giving to defense lawyers in a stack of other papers." [NPR] Read the government's filing last week in SDNY; prosecutors announced a new training effort on discovery obligations.
Deutsche Bank Slammed With $150M Fine Over Ties to Jeffrey Epstein. "New York regulators fined Deutsche Bank $150 million Tuesday and slammed the lender for 'mistakes and sloppiness' in its relationship with accused sex-trafficker Jeffrey Epstein. Authorities said Deutsche Bank's 'significant compliance failures' allowed Epstein to conduct hundreds of transactions totaling millions of dollars that should have prompted additional scrutiny." [CNN] The New York Times has more here, and Law.com here. Read the consent order.
Senior DOJ Official Pushes Back Against Former Top Aide's Testimony. "The top antitrust official at the Justice Department has pushed back on eyebrow-raising testimony his former chief of staff delivered to Congress last week––and, in the process, alluded to how flummoxed department attorneys were with an unusually thorny legal issue: marijuana mergers. The pushback comes in a letter that Makan Delrahim (at left), the head of the Justice Department's Antitrust Division, sent on Wednesday to the top Republican and Democrat on the House Judiciary Committee. In the letter, Delrahim said John Elias's testimony was 'misleading and lacks critical facts.'" [Politico]
The 2020 FCPA Resource Guide Update: A Window into Today's Enforcement of the FCPA. "The Second Edition is a welcome update to the guide, given the volume of corporate resolutions, case law developments, and policy announcements over the last eight years. While significant questions remain—some of which will ultimately be decided in court—the updated Guide nonetheless provides key insight into current FCPA enforcement practice and thinking at DOJ and the SEC and will serve as an invaluable resource for years to come," lawyers from Kaplan Hecker & Fink LLP said. [NYU Compliance & Enforcement] Corporate Counsel has more here.
Banks Face Increasing Compliance Risks, OCC Says "The coronavirus pandemic has forced some financial institutions to reduce staff or reassign personnel at a time when applications for government relief programs are flooding in, heightening banks' compliance risks, the Office of the Comptroller of the Currency said." [WSJ]
Notable Moves & More
>> Akin Gump Strauss Hauer & Feld announced this week two new hires to its international trade and white-collar teams, my colleague Samanta Stokes reports. Matthew Nicely, formerly at Hughes Hubbard & Reed, rejoined Akin Gump on Tuesday as a partner in the firm's international trade practice in Washington. His hire comes a day after the addition of Katherine Goldstein (at left), former assistant U.S. attorney for the Southern District of New York and chief of its securities and commodities fraud task force. Goldstein joined from Milbank.
>> Mayer Brown said it has hired Andrew Olmem from the Trump White House, where he served as deputy director of the National Economic Council. Olmem will be a partner in the firm's public policy, regulatory and political law practice in Washington. Olmem was a Venable partner before he joined the Trump administration in 2017. But his legal career started at Mayer Brown years ago.
>> "President Donald Trump's former Treasury under secretary for terrorism and financial intelligence, Sigal Mandelker (at left), has revealed her first project since leaving Trump's Treasury and joining venture firm Ribbit Capital earlier this year. In addition to joining the expanded $49 million Series B in cryptocurrency investigation startup Chainalysis, Mandelker will work on the startup's board of advisors," Forbes reports. Mandelker is a former Proskauer Rose partner and clerk to Justice Clarence Thomas.
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Who Got The Work
J. Brugh Lower of Gibbons has entered an appearance for industrial equipment supplier Devco Corporation in a pending trademark infringement lawsuit. The suit, accusing the defendant of selling knock-off Graco products, was filed Dec. 18 in New Jersey District Court by Rivkin Radler on behalf of Graco Inc. and Graco Minnesota. The case, assigned to U.S. District Judge Zahid N. Quraishi, is 3:24-cv-11294, Graco Inc. et al v. Devco Corporation.
Who Got The Work
Rebecca Maller-Stein and Kent A. Yalowitz of Arnold & Porter Kaye Scholer have entered their appearances for Hanaco Venture Capital and its executives, Lior Prosor and David Frankel, in a pending securities lawsuit. The action, filed on Dec. 24 in New York Southern District Court by Zell, Aron & Co. on behalf of Goldeneye Advisors, accuses the defendants of negligently and fraudulently managing the plaintiff's $1 million investment. The case, assigned to U.S. District Judge Vernon S. Broderick, is 1:24-cv-09918, Goldeneye Advisors, LLC v. Hanaco Venture Capital, Ltd. et al.
Who Got The Work
Attorneys from A&O Shearman has stepped in as defense counsel for Toronto-Dominion Bank and other defendants in a pending securities class action. The suit, filed Dec. 11 in New York Southern District Court by Bleichmar Fonti & Auld, accuses the defendants of concealing the bank's 'pervasive' deficiencies in regards to its compliance with the Bank Secrecy Act and the quality of its anti-money laundering controls. The case, assigned to U.S. District Judge Arun Subramanian, is 1:24-cv-09445, Gonzalez v. The Toronto-Dominion Bank et al.
Who Got The Work
Crown Castle International, a Pennsylvania company providing shared communications infrastructure, has turned to Luke D. Wolf of Gordon Rees Scully Mansukhani to fend off a pending breach-of-contract lawsuit. The court action, filed Nov. 25 in Michigan Eastern District Court by Hooper Hathaway PC on behalf of The Town Residences LLC, accuses Crown Castle of failing to transfer approximately $30,000 in utility payments from T-Mobile in breach of a roof-top lease and assignment agreement. The case, assigned to U.S. District Judge Susan K. Declercq, is 2:24-cv-13131, The Town Residences LLC v. T-Mobile US, Inc. et al.
Who Got The Work
Wilfred P. Coronato and Daniel M. Schwartz of McCarter & English have stepped in as defense counsel to Electrolux Home Products Inc. in a pending product liability lawsuit. The court action, filed Nov. 26 in New York Eastern District Court by Poulos Lopiccolo PC and Nagel Rice LLP on behalf of David Stern, alleges that the defendant's refrigerators’ drawers and shelving repeatedly break and fall apart within months after purchase. The case, assigned to U.S. District Judge Joan M. Azrack, is 2:24-cv-08204, Stern v. Electrolux Home Products, Inc.
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