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Although the business community lauded the arrival of new crowdfunding laws, the enforcement community has had a different take on them. As stated in 2017 by then Deputy Attorney General Rod Rosenstein: “The potential downside of crowdfunding is that it occurs outside the watchful eye of a regulated banking and financial industry. Unregulated websites therefore provide a platform for criminals to defraud potential investors.”
In 2012, President Obama signed into law the Jumpstart Our Business Startups Act (the JOBS Act), the stated purpose of which was to provide easier and simpler routes for small businesses to access capital markets without all the regulatory burdens imposed by the SEC on larger companies. In 2015, President Obama signed into law the Fixing America’s Surface Transportation Act (the FAST Act), to further ease small business’s access to capital formation. Another proposed refinement of the JOBS Act, JOBS Act 3.0, has been stalled in Congress but under the current regime, there are still plenty of potential regulatory and enforcement landmines of which both issuers and intermediaries, such as funding portals and platform hosts, need to be aware.
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By Steve Sozio, Rebecca Martin, Rajeev Muttreja and Mark Rotatori
With the federal government appropriating more than $2 trillion for businesses affected by the COVID-19 pandemic, plaintiffs’ lawyers, regulators and politicians have trumpeted the search for whistleblowers — many of whom will try to cash in on perceived fraud in the funding programs created by the CARES Act and other enactments.
By Carolyn H. Kendall
Compliance Programs Offer Companies an Opportunity to Mitigate Risk
This article outlines the principles of corporate criminal liability, including the factors prosecutors consider when making charging decisions, and the potentially available sanctions in light of applicable U.S. Sentencing Guidelines, and offers strategies for minimizing risk, including lessons from recent criminal enforcement actions.
By Daniel R. Alonso, Preston Burton and Meredith Leeson
IGs have been part of the federal landscape for more than 40 years, so why all the fuss now? The answer is that they are a key element of the government’s built-in mechanisms for protecting the nation’s public treasury, and a relief package of this scope strongly indicates that the IGs and the new oversight bodies will spend many years scrutinizing funds spent under it.
By Christopher M. Ferguson
This article discusses what tools the government has for pursuing seemingly undeserving PPP borrowers, the obstacles to bringing such cases, and the factors that may influence the government’s decision in pursuing criminal or civil cases.