Trump Administration

The SEC Enforcement Division 2017 Annual Report: Continued Focus on Individual Wrongdoers and Enhanced Protections for the “Main Street” Investor

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Almost a year into the new administration, the U.S. Securities and Exchange Commission’s Division of Enforcement released its annual report last week, providing a recap of the SEC’s enforcement results over the past 12 months, as well as some insight into its direction for the coming year. Overall, the report suggests that the SEC will increase its focus on addressing harm to “Main Street” investors and that pursuing individuals will continue to be the rule, not the exception.

During fiscal year 2017, the SEC pursued 754 enforcement actions, 446 of which were “stand-alone” actions (as opposed to “follow-on” actions which seek to bar executives from practicing before the Commission or to deregister public companies). This represents a drop from the prior year in which the SEC pursued 784 enforcement actions, 464 of which were stand-alone actions. The bulk of the Division’s 446 stand-alone actions in FY 2017 focused on issuer advisory issues, issuer reporting, auditing and accounting, securities offerings, and insider trading—all areas that saw a relatively similar number of cases in FY 2016. Actions involving public finance abuse represented the only significant decrease in the number of cases versus the prior year. In FY 2016, the SEC brought nearly 100 public finance abuse actions compared to fewer than 20 in FY 2017. READ MORE →

Sudan Now Open for Business, but Risks Remain

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On October 12, 2017, the United States made permanent its lifting of a longtime general embargo on trade and investment with Sudan. As a result, U.S. individuals and companies are now generally free to engage in transactions involving Sudan, the Government of Sudan or many formerly sanctioned Sudanese persons without a license from the Department of the Treasury’s Office of Foreign Assets Control (OFAC). While this presents opportunities for new business in Sudan, any U.S. person considering business relating to Sudan should be aware of the legal restrictions that remain in place and the risks associated with such an undertaking.

Background

For almost two decades, Executive Orders (EOs) by Presidents Bill Clinton (EO 13067) and George W. Bush (EO 13412), along with the Sudanese Sanctions Regulations (SSR), have generally prevented U.S. persons from conducting transactions involving the Government of Sudan or certain sanctioned Sudanese persons, importing goods or services of Sudanese origin, exporting any goods or services to Sudan, or performing any contract “in support of an industrial, commercial, public utility, or governmental project in Sudan,” among other things. This trade and investment embargo was prompted by findings that the Government of Sudan was engaged in support for international terrorism, efforts to destabilize its neighboring countries, and myriad human rights violations.

On January 13, 2017, President Obama issued EO 13761, which observed that the dangerous and unstable situation in Sudan that had prompted sanctions by his predecessors “has been altered by Sudan’s positive actions over the past 6 months.” In particular, the order praised Sudan for “a marked reduction in offensive military activity, culminating in a pledge to maintain a cessation of hostilities in conflict areas in Sudan, and steps toward the improvement of humanitarian access throughout Sudan, as well as cooperation with the United States on addressing regional conflicts and the threat of terrorism.” The order, which was one of President Obama’s final acts in office, called for a conditional return of U.S. trade and investment transactions with Sudan with permanent revocation of sanctions after a six-month monitoring period and approval by certain U.S. agencies. Consistent with this order, OFAC issued a temporary general license on January 17, 2017, authorizing transactions that were previously prohibited by the aforementioned sanctions. As it turns out, the January 17 general license marked the end of the main set of sanctions against Sudan. READ MORE →