Due Diligence

News & Analysis as of

Angels in Limbo: Congress and SEC Consider Regulatory Changes with Potential for Profound Effects on Start-Up Investments

Three events occurred during 2013 that have the potential to significantly affect angel investment around the country: (1) the Securities and Exchange Commission (“SEC”) lifted the prohibition on general solicitation for...more

Rating Agency Developments

On September 19, Fitch released its criteria for analyzing large loans within single-borrower or multiborrower U.S. CMBS transactions. On September 17, DBRS released its methodology for rating U.S. structured finance...more

17 Red Flags for Potential International-Sanctions Violations

Recent events in Ukraine and the Middle East have expanded sanctions placed by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) against certain foreign financial institutions and individuals. This...more

Outrageous Opinions in Registration Statements

In Omnicare, Inc. v. Laborers District Council Construction Industry Pension Fund, No. 13-435, the respondents fired back at the petitioners in a brief filed with the Supreme Court, posing a simple question: “Whether...more

The Global Anti-Corruption Perspective - Q3 2014

TOP 10 TIPS FOR COUNTERING SMALL BRIBES - The issue of so-called facilitation payment’ and other small bribes is a thorn in the side of many international businesses. Not only is it difficult to do business in many...more

Protecting Trade Secrets During Business Collaboration [Video]

Businesses are increasingly working together to develop new products and services. With that collaboration is the risk that precious trade secrets will be lost. Attorney Christopher Larus sits down with Seth Northrop to...more

More Than Due Diligence: Never-Ending Due Diligence

Due diligence of third parties can drive you crazy. You know you are in trouble when you start babbling to yourself and others about red flags, more red flags, and even more red flags. You can start thinking that the movie,...more

Charitable contributions and the FCPA – 6 simple steps to help ensure your company is giving responsibly

As part of the growing culture of corporate social responsibility, many companies seek to give back to the communities in which they conduct business. But when the charitable giving takes place outside the United States,...more

Why this may be the time to buy or sell a hotel management company A hot trend and five key issues

One of the hottest trends right now is buying (or selling) independent hotel management companies. The demand is coming from all directions – existing management companies, investment funds and foreign buyers. Existing...more

More Than Due Diligence: Never-Ending Due Diligence

Due diligence of third parties can drive you crazy. You know you are in trouble when you start babbling to yourself and others about red flags, more red flags, and even more red flags....more

Customer Due Diligence and Beneficial Ownership

Compliance officers face lots of challenges when conducting third-party due diligence. One issue that frequently arises is determining who exactly owns a potential agent or distributor. ...more

Orrick's Financial Industry Week in Review

Council of EU Presidency Compromise Proposal on Benchmark Regulation - On September 10, the Presidency of the Council of the EU published its first compromise proposal (dated September 9, 2014) relating to the European...more

Does Your Company’s “Inadequate Compliance Program” Violate Securities Laws?

In a recent matter before the SEC, settlement of an FCPA claim with Smith & Wesson has raised some worrisome new issues for compliance officers. This settlement is noteworthy for two reasons: 1. Small and mid-sized...more

Third Parties and the Red Flags You Don’t See

Recently, I was reading a White Paper by Dun and Bradstreet titled “Anti-Bribery and Corruption Compliance for Third Parties: Is an off the shelf product enough?”. As the D&B paper points out, “the risks of insufficient...more

SEC Adopts Final Rules Relating to NRSROs and Third-Party Due Diligence Reports

On August 27, 2014, the SEC adopted a number of new rules and amendments designed to improve the quality of credit ratings and increase credit rating agency accountability in accordance with the Dodd-Frank Act. The...more

New Rules for Third-Party Due Diligence Reports for Asset-Backed Securities

On August 27, 2014, the Securities and Exchange Commission (the “SEC”) adopted final rules (the “Final Rules”) implementing, among other things, provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of...more

When to Walk Away from an Agent or Distributor (Part IV of IV)

An effective due diligence screening program should include instances when a company decides not to engage an agent or distributor. It is hard to persuade the business side of this fact but success does not necessarily flow...more

FinCEN's Busy August Yields Noteworthy Anti-Money Laundering Developments

August was a busy month for the U.S. Department of the Treasury's Financial Crimes Enforcement Network (FinCEN). Among other initiatives, FinCEN issued its long-awaited proposed regulations on customer due diligence (CDD)...more

How due diligence plays a role in anti-corruption compliance

With the increasing frequency and expanding scope of enforcement globally, organizations need to devote plenty of attention to anti-corruption due-diligence of third-parties that they engage. The value of due diligence is...more

The New Focus on Agent and Distributor Monitoring (Part I of IV)

The field of due diligence has quickly filled up. If you look at the industry and company practices ten years ago, you will quickly realize that the world has changed. (Like the R.E.M. song: It’s the end of the world … and...more

OFAC Makes Important Update to Ownership/Control Guidance

On August 13, 2014, the Office of Foreign Assets Control (OFAC) issued new guidance on ownership/control for determining blocked parties. This represented the first significant update on this topic since February 14, 2008,...more

Buying an FCPA Violation Mergers and Acquisition Risks [Video]

FCPA risks are significant when companies acquire other companies. The Justice Department and the SEC have imposed "successor" liability on companies for past bribery violations committed by an acquired company. Pre-closing...more

SEC Adopts Rules For Credit Rating Agencies

At an open meeting this morning, the SEC adopted, by a vote of three to two, rule amendments and new rules to implement provisions of Dodd-Frank applicable to credit rating agencies registered as nationally recognized...more

FinCEN Proposes More Extensive Customer Due Diligence Obligations

As part of the U.S. Treasury Department’s ongoing efforts to combat all forms of illicit financial activity, from terrorist financing and sanctions evasion to more traditional financial crimes (including money laundering,...more

Anti-Corruption Due Diligence Practical Steps to Protect Your Company from Third Party Risks [Video]

Almost every FCPA enforcement action involves misconduct by third party agents and distributors. The Justice Department and the SEC have emphasized the importance of companies conducing appropriate due diligence. In the...more

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