A US District Court for the Central District of California judge recently granted a stay and certified two questions for interlocutory appeal in a relator's False Claims Act suit. The case involved allegations that one of the defendants had perpetrated an upcoding scheme whereby it trained its doctors to describe medical conditions with language that would support increasing the severity levels of diagnosis-related groups that the defendant reported to Medicare, leading to inflated Medicare reimbursements.
The Financial Industry Regulatory Authority recently censured and fined a Florida-based broker-dealer, including for failing to reasonably supervise sales of complex securities such as structured products and leveraged, inverse and inverse-leveraged exchange-traded funds. This case illustrates the need for broker-dealers to establish and enforce proper surveillance systems and written procedures to ensure the suitability of their sale recommendations.
Division of Corporate Finance staff recently issued a new Staff Legal Bulletin 14K on shareholder proposals and the 'ordinary business' exclusion. The new bulletin contains an enhanced reminder that it has not been approved by the Securities and Exchange Commission and, like all staff guidance, has no legal force or effect, does not alter or amend applicable law and creates no new or additional obligations for any person.
New York Governor Andrew Cuomo recently signed into law a pair of bills establishing new requirements for businesses that process certain personal information relating to New York residents. The changes include expanding the scope of information covered by New York's data breach notification law. Businesses maintaining the private information of New York residents will now be required to develop reasonable safeguards within their organisation as part of a new reasonable security requirement.
In January 2019 the US Department of Homeland Security passed a rule that amended the regulations governing the H-1B cap-subject selection process. One of the biggest changes requires employers seeking to file an H-1B cap-subject petition to register the foreign national with the US Citizenship and Immigration Services online electronic registration system. This article sets out some of the items to be aware of with respect to the online electronic registration system for the upcoming H-1B cap season.
As a further step towards the implementation of its security-based swap regime, the Securities and Exchange Commission (SEC) has adopted a number of long-awaited capital, margin and segregation requirements for security-based swap dealers and major security-based swap participants. The SEC's final rules address one of the key remaining questions required to implement the security-based swap regime: which capital and margin requirements will apply to non-bank dealers?
The US Department of Transportation (DOT) has issued a notice of proposed rulemaking to amend its regulations governing situations in which an aircraft remains on the airport tarmac without an opportunity for passengers to deplane for an extended period. Specifically, it proposes to change the departure delay exemption, carrier reporting requirements and record retention requirements, among others. Comments on the notice of proposed rulemaking must be filed with the DOT by 24 December 2019.
The North American Securities Administrators Association recently issued a report that provided a warning as to the risks of leveraged or inverse exchange-traded funds. The report urges broker-dealers to tailor their supervisory procedures if they allow exchange-traded fund (ETF) transactions in these products. Among other things, the report concludes that broker-dealers should carefully consider whether to permit purchases of leveraged or inverse ETFs in retail customer accounts.
The US Department of Justice (DOJ) has issued a new guidance memorandum entitled "Evaluating a Business Organisation's Inability to Pay a Criminal Fine or Criminal Monetary Penalty". This memorandum aims to provide greater clarity, transparency and uniformity as to how the DOJ's Criminal Division evaluates companies' claims that they cannot pay a proposed criminal fine or monetary penalty.
Thus far, biosimilar uptake has been low in the United States, with market shares for most biosimilars under 10%. Given the cost-saving potential, trying to increase biosimilar uptake has been high on Congress's agenda and there are many bills pending before it dealing with issues from a variety of angles. But will they actually help to bring biosimilars to market more quickly?
The California attorney general recently released proposed regulations to implement certain provisions of the California Consumer Privacy Act (CCPA). The attorney general also released a notice of proposed rulemaking and an initial statement of reasons that provide drafting insights and outline considerations that will likely continue to guide the rulemaking process. The proposed regulations provide clarifications for businesses and consumers in five key CCPA areas, including privacy notice requirements.
The US International Trade Commission (ITC) recently began accepting petitions as part of the 2019 Miscellaneous Tariff Bill process. Under this process, a member of the public may request that Congress temporarily eliminate or reduce duty on an imported article for three years. Petitions are due no later than 10 December 2019 at 5:15pm Eastern Standard Time via the ITC online portal.
The Federal Aviation Administration (FAA) has begun the process of amending its regulations to require that flight attendants at US airlines receive a rest period of at least 10 consecutive hours between periods of duty lasting 14 hours or less. Under the FAA's current regulations, a flight attendant who is scheduled for a duty period of 14 hours or less must be given a scheduled rest period of at least nine consecutive hours. Comments on the advance notice are due by 12 November 2019.
In a legislative environment charitably described as challenging, the fact that the Senate recently passed cybersecurity legislation by unanimous consent is noteworthy and highlights the bipartisan nature of this issue. The bill requires the newly-formed Department of Homeland Security teams to provide assistance to public and private entities, on request, to prepare for and respond to cyber-related incidents, including (among other things) restoring services after a cyber incident.
The Bureau of Industry and Security (BIS) announced another major policy change towards Cuba by further restricting the Cuban government's access to items subject to BIS's Export Administration Regulations. This new rule will have a significant impact on exporters and re-exporters currently using certain licence exceptions to export to Cuba that export non-US origin products with US-origin content to Cuba and lease commercial aircraft to Cuban state-owned airlines.
California's governor recently signed a bill designed to enhance antitrust scrutiny of patent settlements between branded and generic pharmaceutical companies. The bill follows the California attorney general's nearly $70 million settlement in Summer 2019 with several pharmaceutical companies based on patent settlements that the attorney general claimed violated the Cartwright Act and is yet another example of diverging interpretations between federal and state antitrust laws.
The Treasury Department, on behalf of the full Committee on Foreign Investment in the United States (CFIUS), recently released the long-awaited comprehensive draft regulations to implement the Foreign Investment Risk Review Modernisation Act. The regulations will significantly expand CFIUS's jurisdiction to cover a wider range of transactions, likely resulting in a dramatic spike in CFIUS reviews in 2020 and beyond.
The Supreme Court recently denied Domino's Pizza's request to review the Ninth Circuit's decision that Domino's must make its website accessible to persons with visual impairments under the Americans with Disabilities Act. Given that any business with a website may be targeted by website accessibility claims, companies must take preventative measures, including adopting website accessibility policies and updating their websites to meet trending website accessibility and lawsuit deterrence standards.
In a recent report, Intelligize examined data from a survey of 171 compliance specialists at public companies to examine how public company compliance officials are adapting their own corporate disclosure and processes to comply with this new regime. Among the issues considered were the impact of 'dry runs', changes to company disclosures and changes in controls.
The US State Department recently solicited feedback on its draft US Government Guidance for the Export of Hardware, Software and Technology with Surveillance Capabilities and/or Parts/Know-How. The draft guidance aims to provide insight to exporters on the considerations to weigh prior to exporting items with intended and unintended surveillance capabilities and could foreshadow new export controls and a US State Department review.