Category Archives: COVID-19/ Coronavirus

Theft of Federal Funds Highlights Expanding Cyber Threat from Foreign Actors

by John P. Carlin, Jeh Charles Johnson, Jeannie S. Rhee, Steven C. Herzog, and David Kessler

Photos of the authors

From Left to Right: John P. Carlin, Jeh Charles Johnson, Jeannie S. Rhee, Steven C. Herzog, and David Kessler

The Secret Service has reported that APT41, a hacking organization, stole roughly $20 million in federal COVID-19 relief funds by obtaining access to the computer systems of a number of U.S. states beginning in mid-2020.[1]  According to the Secret Service, APT41 is a “Chinese state-sponsored, cyberthreat group that is highly adept at conducting espionage missions and financial crimes for personal gain.”[2]  While experts are uncertain regarding whether the breach by APT41 was ordered by the PRC government or merely tolerated, the Secret Service announcement marks the first public confirmation by a federal agency of a state-affiliated hacking group breaching U.S. cyber defenses to steal federal funds. According to the government, the hackers obtained unemployment insurance funds and Small Business Administration loans from more than a dozen states.[3]  The true scope of the breach remains unclear, with officials speculating that government networks in all 50 states were likely targeted.[4]  The Secret Service has further linked the APT41 intrusion to the organization’s broader efforts to access and interrogate state networks.[5]

Continue reading →

The Status of DOJ Enforcement of PPP Fraud

by Sabrina Solow

A year into his presidency, President Biden’s Department of Justice continues vigorously to prosecute perpetrators of Paycheck Protection Program (PPP) fraud. Biden’s DOJ has not shied away from prosecuting individuals for PPP fraud and in recent months has issued several PPP fraud Press Releases.

Continue reading →

Returning to the Future of Work: Considerations for the Virtual Board Room in the ‘Post’-Pandemic Era

by Jeffrey D. Karpf and Fernando A. Martinez

Almost two years into the COVID-19 pandemic, it is clear that the corporate workplace has changed for good. As the world continues to reopen and companies return to the office, what we are returning to is not business as usual, but a new future of work – a future characterized by a shift from the traditional workplace to remote and hybrid models that provide opportunities to work in effective and efficient ways from anywhere. Companies are faced with challenges as they return to the office and are finding they need to adapt to remain competitive, attract talent and stay prepared for future crises. Boards of directors of public companies should play an important role in defining what this future looks like and ensuring companies are set up for success.

Continue reading →

Spotlight on Boards

by Martin Lipton, Steven Rosenblum, Karessa Cain, and Hannah Clark 

The ever-evolving challenges facing corporate boards prompt periodic updates to a snapshot of what is expected from the board of directors of a public company—not just the legal rules, or the principles published by institutional investors and various corporate and investor associations, but also the aspirational “best practices” that have come to have equivalent influence on board and company behavior. The ongoing coronavirus pandemic and resulting economic and social turbulence, combined with the wide embrace of ESG, stakeholder governance and sustainable long-term investment strategies, are propelling a decisive inflection point in the responsibilities of boards of directors. The 2016 and 2020 statements of corporate purpose by the World Economic Forum and the 2019 embrace of stakeholder capitalism by the Business Roundtable, together with current statements of policy by most of the leading corporations, institutional investors, asset managers and their organizations, as well as governments and regulators in and outside the United States, lead us to summarize the purpose of the corporation:

Continue reading →

The House Oversight Committee Investigative Agenda for the Next Two Years Highlights Likely Private Sector Targets for Congressional Investigations

by Robert Kelner, Brian Smith, Angelle Baugh, Brendan Parets, Perrin Cooke, Bill Sokolove, and Darcy Slayton

On May 21, the House Committee on Oversight and Reform’s “Oversight Plan” was published, after being submitted for publication by Committee Chairwoman Carolyn Maloney (D-NY) over a month ago. The Oversight Plan outlines the “topics designated for investigation, evaluation, and review” by the Committee over the next two years. The Oversight Plan provides a very useful roadmap of the Committee’s investigative priorities and should be seen as a fair warning to the industries and companies identified in the plan.

The Committee’s Oversight Plan is required by the House Rules. Under House Rule X, Clause 2, each standing committee of the House is required to submit an oversight plan to the Oversight Committee. The Oversight Committee then reviews the plans and reports to the full House on each committee’s plan and the Oversight Committee’s recommendations for coordinating oversight activities. The 2021 Oversight Plan included the Oversight Committee’s compilation that, along with its own plan, included the oversight plans of all other House committees. The nearly 300-page compilation generally indicated an interest in oversight of the coronavirus crisis, health care, economic prosperity and infrastructure investments, and climate change and the environment.

Continue reading →

Cybersecurity Oversight and Defense – A Board and Management Imperative

by John F. Savarese, Sarah K. Eddy, Sabastian V. Niles, and Jeohn Salone Favors 

This past weekend, criminal ransomware cyberattacks drove the shutdown of one of America’s largest pipelines for refined gasoline, diesel fuel, and jet fuel as a precautionary means of containing the impact of the breach, highlighting the vulnerability of the nation’s energy infrastructure. Recent reports indicate that more than two dozen other company victims across a range of industries were targeted by these ransomware attacks, with worse damage blocked thanks to close and rapid coordination between federal authorities and private sector partners to identify and swiftly shut down servers being used in the attack. Earlier this month, a California- based regional hospital operator had to take healthcare IT systems offline following a cyberattack, significantly disrupting care, forcing medical personnel to use back-up paper records and raising concerns about vulnerabilities in the healthcare system as the nation continues to battle the Covid-19 pandemic.

Continue reading →

Life Sciences Companies Face Heightened Insider Trading Risks and Scrutiny

by Anne E. Railton and Courtney D. Orazio

Insider trading has long been a key enforcement priority for the U.S. Securities and Exchange Commission (SEC) and the U.S. Department of Justice (DOJ).  The COVID-19 pandemic has caused market volatility not seen in decades, creating heightened concerns about insider trading that have only sharpened this focus.  Life sciences companies—including biotechnology, pharmaceutical, medical device, and healthcare product and services businesses—are likely to be particular subjects of scrutiny.  Already frequent targets of SEC and DOJ focus even before the pandemic, many life sciences companies on the frontlines of fighting COVID-19 have been privy to a regular stream of material COVID-related, market-moving information.  The ongoing opportunities for breakthroughs in responding to the pandemic create opportunities for lucrative trading, too—and regulators and prosecutors have taken notice.  Life sciences companies, along with their executives and directors, have already—and will continue to—face scrutiny arising out of event-driven trading issues relating to COVID-19 diagnostics, treatments, and vaccines. 

Continue reading →

Five Key Federal Grants Compliance Tips as COVID-19 Comes More Under Control

by David B. Robbins, David W. DeBruin, Rebecca Fate, Emily A. Merrifield, and Andrew J. Plague

Colleges and universities have grappled with many challenging issues throughout the COVID-19 crisis, but federally sponsored research has generally provided stable and (comparatively) uncomplicated revenue- and work-streams through this period. In some cases, federal grants were easier to obtain and comply with as additional funding came available through the CARES Act and federal guidance reduced certain compliance requirements. Ongoing compliance efforts may have suffered as a result. As the economy creeps back toward normal, compliance takes on added importance once again.

Continue reading →

Three Key Takeaways from the DOJ Fraud Section’s 2020 Annual Report

by Andrew Weissmann and Tali R. Leinwand

Last week, the Fraud Section, part of the U.S. Department of Justice’s (DOJ’s) Criminal Division, released its annual year-in-review report.[1] In this post, we highlight three key takeaways from the 2020 report.

Continue reading →

New York State Department of Financial Services (“DFS”) Uses New Powers to Investigate Alleged Price Spikes in COVID-19 Medicines, Where Targeted Pharma Manufacturers Are Not DFS Licensees

by Matthew Levine

Continuing its focus on consumer protection enforcement, the New York State Department of Financial Services (“DFS”) recently announced an investigation into alleged price spikes for six drugs connected to treatments of COVID-19 medical conditions.[1]  According to DFS, its newly-formed Office of Pharmacy Benefits (“OPB”) commenced the investigations under Insurance Law § 111 into what it characterizes as “anomalously large spikes” in the prices of the six drugs, occurring since the onset of the COVID-19 pandemic.  These medications are Ascor, Budesonide, Dexonto, Mytesi, Duramorph and Chloroquine phosphate, each of which has some actual or claimed therapeutic use for COVID-19 conditions.

Continue reading →