COVID-19 Coronavirus: White Collar, Compliance and Investigations


On 31 October 2020, the UK Government’s Coronavirus Job Retention Scheme will come to an end. It is estimated that between £1.75 billion and £3.5 billion may have been claimed fraudulently or in error by employers under the Scheme. Companies who have claimed under the Scheme should review their processes and records and conduct an audit review to ensure that no claims have been made in error, and identify any potential fraudulent claims.

Read our guidance: The UK Government Furlough Scheme: Time to Reconcile (UK) - October 2, 2020

The UK Financial Conduct Authority has reinforced its expectations on market conduct during the COVID-19 pandemic. This article provides practical guidance that market participants can take to ensure they meet these expectations in the current environment concerning the use of inside information and mitigate the risks of market abuse.

Read our guidance: FCA Reinforces Market Abuse and Conduct Expectations (UK) - June 30, 2020

In the short term, the FCA will dedicate its resources to combatting the myriad of issues that are and inevitably will be caused by COVID-19. Firms can expect continued scrutiny in respect of the regulatory areas set out in the article below and where failings are found, enforcement action may be likely to follow. It would be prudent for firms to assess how well they are performing in each of these areas.

Read our guidance: FCA Enforcement Risk: The Year Ahead (UK) - May 7, 2020

Corporates and asset managers will need to update their financial crime risk assessments as a result of COVID-19 and take particular preventative steps to mitigate the risk of related misconduct. Companies bidding for EU funded work should take particular care to ensure that the business-specific risks of operating in the current environment are identified and incorporated into their compliance and mitigation steps.

Read our guidance: European Anti-Fraud Office Remains Active During COVID-19 Crisis and Targets Increase in Investigation and Prosecution of EU Fraud (Europe) - May 1, 2020

The history of FCA enforcement following government spending in response to a crisis, along with the oversight mechanisms built into the CARES Act, suggests a surge in FCA investigations and enforcement is likely. While there is an understandable focus on current problems, it is important to keep in mind the potential for costly investigations and lawsuits down the road, particularly given the intense scrutiny CARES Act expenditures will eventually receive.

Read our guidance: Government Stimulus Spending Likely to Lead to False Claims Act Investigations and Enforcement Actions (U.S.) - April 24, 2020

The Interim Charging Protocol is a practical measure by the Crown Prosecution Service (CPS) to streamline and prioritize charging decisions during the crisis. This article considers the implications on COVID-19-related financial crime, the role and approach taken by other major UK law enforcement agencies and how businesses may respond to the increased risk of fraudulent or other criminal conduct in the current circumstances.

Read our guidance: Financial Crime and the CPS Interim Charging Protocol (UK) - April 20, 2020

The funds appropriated in the CARES Act far exceed those appropriated to support the Troubled Asset Relief Program (TARP) which was established in 2008. If the Special Inspector General of TARP's activities over the past decade are any indication, the Special Inspector General of Pandemic Recovery is likely to pursue fraud investigations aggressively and refer matters to the Department of Justice for criminal prosecution.

Read our guidance: Special Inspector General for Pandemic Recovery Likely to Pursue Investigations Aggressively (U.S.) - April 2, 2020

As the impacts of the COVID-19 pandemic on the global economy are surfacing, liquidity risks are increasingly prevalent. Hong Kong's prudential regulator has adopted measures to ensure that banks are properly prepared for such risks. At the same time, fund managers are also reminded of their obligations to manage the liquidity of funds given the present volatility of the local and international markets.

Read our guidance: Liquidity Issues in Hong Kong (Hong Kong) – April 2, 2020

In times of tremendous stress and financial turmoil, sometimes criminal wrongdoing and other malfeasance surfaces. Companies that are confronted with evidence of potential wrongdoing, either a policy violation or a legal or regulatory violation, should continue adhering to best practices, even if that means making needed adjustments to normal protocols.

Read our guidance: COVID-19 New Realities: Considerations for Conducting an Internal Investigation During the Coronavirus Outbreak (U.S.) - April 2, 2020

Financial regulators around the world are closely monitoring the situation and many have published information for firms focused on maintaining market integrity and providing guidance on the challenges currently facing firms. While the situation continues to evolve, firms are reminded of the continuing need to comply with their regulatory and compliance obligations.

Read our guidance: Regulatory Impact – Focus on Global Market Abuse Risks (Global) - March 31, 2020

The aviation and transportation industry is facing one of its biggest ever challenges as it finds itself in the eye of the COVID-19 coronavirus regulatory and economic storm. While the challenges facing many transport operators are significant, there are also unprecedented opportunities for agile and well-advised operators to take advantage of lower costs and regulatory relief.

Read our guidance: Running on Empty: A 10-Point Plan for the Aviation and Transportation Industry as It Meets the Challenges and Opportunities Presented by the COVID-19 Coronavirus Crisis (Global) - March 31, 2020

In response to the unprecedented spread of the COVID-19 virus, over 70 states, counties and cities in the last two weeks have issued orders directing certain businesses limit or stop their physical business operations. Businesses that violate shutdown orders may be subject to an array of penalties, which may include fines, citations, suspension of business or other licenses, equitable relief or even criminal penalties.

Read our guidance: Key Considerations for Businesses Facing Potential Shutdown Orders (U.S.) - March 26, 2020

Compliance professionals should consider the best defense to be a pre-emptive offense, which includes not just assessing this risk now, in the midst of the crisis, but taking steps to limit their exploitation.

Read our guidance: Anti-Corruption Considerations (U.S. and UK) – March 13, 2020

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