USA Trends and Developments Contributed by: Steven Molo, Robert Kry, Megan Cunniff Church and Walter Hawes, MoloLamken
New Administration Shifts Priorities in Fraud- Related Enforcement Elections in the United States often entail policy shifts and new enforcement priorities. As each new administration comes into office, it articu - lates new objectives, adjusts resource allocation and replaces the political leaders of administra - tive agencies with new personnel tasked with implementing the incoming President’s policy objectives. In fraud-related enforcement, those changes have traditionally played a muted role. Across different administrations from both major politi - cal parties, civil and criminal enforcement have typically remained relatively constant. While shifts in priorities have occurred – sometimes in line with political priorities – they ordinarily manifest themselves through the initiation of new cases, the shifting of government resources to counter new issues, or refocusing on issues the new administration believes were previously underenforced or overlooked. It is rare to see the pipeline of existing cases and investigations dismantled. And rarer still to see past, closed cases re-examined. The new Trump administration marks a depar - ture from that practice. In his first days in office, President Donald J. Trump initiated a drastic reordering of numerous agencies central to fraud-related enforcement in the United States, including the Department of Justice (DOJ), the Securities and Exchange Commission (SEC), and the Commodity Futures Trading Commis - sion (CFTC). In sweeping reforms, President Trump and his incoming leadership team dep - rioritised large swaths of enforcement, called for remedial action to address purportedly inap - propriate past actions, and laid the groundwork for new frameworks to govern significant areas moving forward. Those directives reflect a sub -
stantial shift in policy and will play a large role in shaping fraud-related enforcement over the coming year. Deprioritising Enforcement of the Foreign Corrupt Practices Act The most express realignment of priorities relates to the Foreign Corrupt Practices Act (FCPA), which imposes civil and criminal penal - ties for bribery of foreign officials. Within days of coming into office, President Trump issued an Executive Order effectively halting the vast majority of FCPA enforcement for the coming year. Despite strong FCPA enforcement during President Trump’s first term – in line with broader historical trends – the Executive Order criticises prior FCPA enforcement as “overexpansive and unpredictable” , and as responsible for creat - ing an uneven playing field for US companies by prohibiting them from engaging in practices common among international competitors. It orders “pause” in FCPA enforcement for 180 days, starting on 10 February 2025, during which time the Attorney General – the cabinet- level official in charge of the DOJ – shall “cease initiation” of any new FCPA investigations or enforcement actions with limited exceptions, review existing investigations and enforcement actions, and issue updated guidance regarding FCPA enforcement. The Order permits the Attor - ney General to extend that review period for an additional 180 days if necessary. After revised guidelines are issued, the Attorney General must take or recommend “remedial measures with respect to inappropriate past FCPA investiga - tions and enforcement actions” . The severity of that shift in FCPA enforcement is significant. For decades, the FCPA has been enforced by a specific unit of federal prosecu - tors within the DOJ, who work with other federal prosecutors and attorneys at the SEC to litigate
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