A conflict is brewing between Richard Cordray, left, and Donald Trump over the future of the Consumer Financial Protection Bureau.
A conflict is brewing between Richard Cordray, left, and Donald Trump over the future of the Consumer Financial Protection Bureau. (Photos: ALM/Shutterstock.com)

The Consumer Financial Protection Bureau faced a new test after a major appeals court ruling struck down the Obama agency’s power scheme. A dispute about an exploding coffee machine revealed tension over the scope of product-safety fines. And a top U.S. Justice Department lawyer offered an apology to prosecutors after some choice words about lack of oversight in some U.S. attorney offices.

Here’s a roundup of some of the top regulatory and compliance stories of 2016.

Donald Trump’s Richard Cordray Problem

Four weeks before Election Day, a three-judge panel of the U.S. Court of Appeals for the D.C. Circuit struck down the Consumer Financial Protection Bureau’s structure as vesting too much power in the hands of the director without insufficient oversight from the White House. The decision, which said the president must have the power to fire the CFPB director at will, not just for cause, was a significant blow to the consumer agency.

As Donald Trump prepares to take office, a showdown between the White House and Cordray is taking shape. The CFPB is fighting the D.C. Circuit’s ruling—and Cordray’s term doesn’t expire until 2018.

Big Law Firms Reveal Rates in Pitches for Herbalife Monitor

As lawyers jockeyed for the lucrative job of overseeing Herbalife Ltd.’s compliance with a $200 million settlement with the Federal Trade Commission, top firms gave a rare glimpse into their billing rates and revealed their strategies for winning coveted independent-auditor contracts.

Among some of the highest hourly rates reported in the FTC filings: The $1,250 per-hour tab for former U.S. Sen. Joseph Lieberman, senior counsel to the New York office of Kasowitz, Benson, Torres & Friedman.

Some Federal Cases ‘Shouldn’t Be Filed,’ Head of DOJ Criminal Division Says

The head of the U.S. Justice Department’s Criminal Division, in unscripted remarks in Washington, acknowledged that some U.S. attorney offices lack the depth and oversight to properly determine whether to bring charges.

Some cases, Leslie Caldwell said in remarks at a Federalist Society event, just shouldn’t be filed. “There are districts where oversight is not what it should be, the experience level is not what it should be,” Caldwell said.

She later apologized for the remarks. Caldwell said in a letter to prosecutors: “I love the Department of Justice and deeply respect our values, the work we do, and the way we do it, both in the U.S. Attorney’s Offices and at Main Justice. That by my own remarks I suggested otherwise pains me deeply. I made a mistake, and I am sorry.”

‘Made in the USA’? Maybe Not, According to the FTC

President-elect Donald Trump’s rhetoric turned U.S. manufacturing into a flashpoint in this year’s presidential race. That rhetoric, in turn, brought scrutiny of his own manufacturing: News reports noted that certain items in his clothing line are made in China and other countries and that even his campaign hats, although stitched in Los Angeles, may include imported fabric.

Disputes over “Made in the USA” are not new, but records show the Federal Trade Commission in recent years stepped up enforcement of misleading “Made in the USA” claims.

Inside the ‘Messy Brew’ of Product Safety Penalties

From 2011 to 2012, Mr. Coffee faced what some call a “messy brew” problem: The brewing chamber on one of its single­-serve machines was occasionally popping open and spraying hot water and coffee grounds at customers. The company received reports of burn injuries but, according to the Consumer Product Safety Commission, was too late reporting the problem to federal regulators.

So it paid the price, reaching a $4.5 million settlement that revealed a growing divide at the consumer agency over what basis exists for fining companies a certain dollar amount—and whether some penalties are too high.

Judge ‘Mystified’ How Unredacted Order in CFPB Case Was Publicly Posted

A judge wanted federal regulators and the law firm Venable to conduct internal investigations into how secret details from a court document became available on a legal research website, revealing the identity of a company that fought for months to remain anonymous in a suit against the Consumer Financial Protection Bureau. But the court itself ultimately owned up to the error. Here’s how it all happened.

SEC Hits Company that Used Severance Agreements to Bar Whistleblower Awards

When the U.S. Securities and Exchange Commission’s new whistleblower protections took effect in 2011, lawyers in the white-collar defense bar wondered about a potential workaround: Using separation agreements to require a departing employee to waive the right to any award.

The thinking went that such contract language, while not expressly standing between a tipster and the SEC, would take away the carrot for contacting a federal agency. But it was unclear how securities regulators would receive that contract language.

The SEC removed any suspense in August, reaching a $265,000 settlement with an Atlanta-based building-products distributor charged with unlawfully requiring outgoing employees to waive their right to any whistleblower bounty.

Judge Calls Cigna Request For Permission to Object to Anthem ‘Extraordinary’

When she adopted the antitrust case over Anthem Inc.’s proposed $54 billion acquisition of Cigna Corp., the first order of business for U.S. District Judge Amy Berman Jackson in Washington was setting a starting date for the trial. She was immediately struck by the “bizarre situation” of accommodating a deal that Cigna appeared to no longer desire.

That was only the beginning of her astonishment with two merger partners who haven’t been getting along. Jackson is expected to issue a ruling soon on the merger.

Ex-Federal Prosecutor Reinstated, Gets $805K and Back Pay

Nearly seven years to the day after he was fired, a former federal prosecutor in Cleveland reached a settlement in January with the U.S. Justice Department in which he will receive full back pay, an additional $805,000 and an assignment as a work-from-home pardon attorney through May 2017.

The former prosecutor, identified as “John Doe” in court papers, was fired in January 2009 after the Justice Department determined he was no longer eligible for a security clearance. In the years leading up to his firing, the prosecutor said he had raised concerns about the department’s conduct and faced escalating retaliation.