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Enforcement Edge
March 1, 2023

Say It Ain’t So! ABA Panel Spotlights White Collar Crime Enforcement in the Heartland

Enforcement Edge: Shining Light on Government Enforcement

This morning’s ABA White Collar Crime Conference kicked off with a lively panel discussion on current white collar enforcement issues in the Midwest. Led by our very own Valarie Hays, the head of Arnold & Porter’s Chicago White Collar practice, the panel included Uma Amuluru, Boeing’s Chief Compliance Officer, as well as several esteemed white collar lawyers from the heartland.

Given the fast-paced and ever-changing nature of the white collar landscape, the panel covered multiple topics, leaving us with some Midwestern nuggets to take back from Miami:

  • Workplace Culture Investigations: White collar professionals are seeing a continuing and growing trend of high-profile workplace culture investigations in both the Midwest and across the entire U.S., including government investigations. As an example, the panel discussed the Activision Blizzard case. In February, the company agreed to pay a fine of $35 million to settle a charge that it failed to maintain adequate controls to ensure that the company could assess whether its disclosures pertaining to workplace culture were adequate. The discussion also delved into the culture investigation recently conducted at Virginia Military Institute and the challenges involved in distinguishing between isolated incidents of misconduct and a pattern of misconduct that indicates there is a broader culture issue at play. The panel also discussed how organizations could be more proactive about setting Diversity, Equity & Inclusion (DEI) goals and then communicating steps taken toward those goals to ensure accountability, as well as integrating sensitivity trainings and encouraging reporting (through, for example, the use of dedicated hotlines) and transparency. One key take away was how important it is for companies to bring in outside counsel in workplace culture investigations, as many company employees are too close to the situation to be truly objective.
  • ESG: Environmental Social Governance (ESG) is more salient for white collar crime professionals than ever before and is becoming integrated into the investigations process. Given the SEC’s and DOJ’s recent focus on ESG impact in workplace culture investigations, the panel discussed the growing prevalence of greenwashing investigations. While they discussed some similarities between the types of red flags and governance issues seen in typical investigations, the panel explained that there are clear nuances to be aware of when handling greenwashing investigations. The panelists also went over one such example: with greenwashing investigations, there is an even stronger focus on prevention, which can look like integrating the proactive collection of views on the environment into company policy (through culture surveys, etc.) and other methods specifically tailored to the particular risks that organizations may face.
  • Companies’ Cooperation With Law Enforcement: In September 2022, the DOJ updated its Corporate Criminal Enforcement Policies, reiterating its expectation that compliance programs are adequately resourced and that companies take a data-driven approach to ensuring the effectiveness of their compliance programs. Uma Amuluru discussed how she factors these developments into the execution of Boeing’s compliance program, highlighting that the use of compliance metrics and benchmarks are critical. Amuluru explained the importance of having outside counsel review and pressure test compliance programs to ensure the program is justifiable, working as needed, and defensible if an issue were to arise with DOJ. Amuluru also weighed in on the DOJ’s recent trend of requiring executives to certify at the end of a reporting period that their compliance programs meet the requirements set forth in settlement agreements between their companies and the DOJ. The panel also weighed the various strategies for navigating the current dynamic regulatory environment, including by owning the uncertainty in the environment and proactively reaching out to the government to discuss potential issues, particularly in the cyber space and sanctions areas.

We’ll continue to keep you posted right here on Enforcement Edge as we learn more from the ABA White Collar Institute’s panels and keynotes of esteemed professionals. Stay tuned.

© Arnold & Porter Kaye Scholer LLP 2023 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.