SKV Partner Dane Ball has compiled a list of a few white-collar and investigations issues that companies are facing due to COVID-19, and resources suggesting first steps that in-house lawyers should take to address them.
- Insider trading and public disclosures. Covid-19 presents challenges to public companies that have a duty to publicly disseminate accurate and reliable information. At the same time, the pandemic increases public companies’ susceptibility to insider trading, or the appearance of such trading, by company insiders. The SEC has warned of both risks, and has given its view of simple steps companies should take to address them: https://www.sec.gov/corpfin/coronavirus-covid-19
- Antitrust risks. Covid-19 has increased interaction between companies of all types and not only their clients, customers, and vendors—but at times even their competitors. The pandemic thus raises unique antitrust issues, including the possibility that common-sense reactions in these uncertain times implicate antitrust rules and regulations. DOJ and the Federal Trade Commission have jointly raised these issues, and have given some guidance: https://www.ftc.gov/system/files/documents/public_statements/1569593/statement_on_coronavirus_ftc-doj_3-24-20.pdf
- Price Gouging and hoarding. Covid-19 has put enforcement agencies on high-alert, as is typical during many emergencies, but for services and goods not previously considered in this context and which are now “essential.” The U.S. Attorney General has raised this issue in a letter to all U.S. Attorneys: https://www.justice.gov/file/1262776/download
- Cybersecurity threats. Covid-19 has increased cybersecurity threats of all kinds for companies working remotely for the first time or at unprecedented levels. The Department of Homeland Security and the Cybersecurity and Infrastructure Security Agency have warned of these risks and outlined various steps companies should take: https://www.dhs.gov/coronavirus/cybersecurity-and-critical-infrastructure
- Stimulus, bank loans, tax issues, and money laundering. If history guides, post-Covid-19 enforcement by DOJ, IRS, and related agencies will apply 20-20 hindsight to companies’ actions during the pandemic. There will be extra scrutiny of loans and financial transactions—whether ordinary or in response to the CARES Act stimulus, for example—and companies should keep this in mind as they act quickly to respond to business and financial disruptions. In sum, unless a business is non-operational, enforcement-related risks will continue if not increase, but with the added risk that agencies will subsequently scrutinize actions with hindsight and with less leniency. One of my former firms, Skadden Arps, has written a helpful article on this: https://www.skadden.com/insights/publications/2020/03/impact-of-covid19-on-white-collar-enforcement
- Internal Investigations. Finally, all the above lead to questions like: Can a company conduct an internal investigation during this pandemic? When? How? Another of my former firms, Quinn Emanuel, has written a helpful article on this: https://www.quinnemanuel.com/media/1420068/client-alert-us-outlook-top-questions-about-criminal-and-internal-in.pdf