COVID-related securities claims continue to rattle the marketplace. On December 7, a leading plaintiffs firm announced an investigation on behalf of shareholders of The Cheesecake Factory Inc., just days after the SEC announced it was settling charges against the company for making misleading disclosures about the impact of the COVID-19 pandemic on its business operations and financial condition. The SEC’s action was its first charging a public company for actions tied to the worldwide pandemic.
Attorney General Eric Holder and Principal Deputy Assistant Attorney General for the Criminal Division Marshall Miller have sent the message that the Department of Justice is looking to hold individuals responsible for corporate crime.
Holder, speaking at New York University, announced that the department is currently investigating the conduct of individuals at certain financial institutions and “expect[s] to bring charges in the coming months.” Holder also called on Congress to provide more robust incentives for whistleblowers under the Financial Institutions Reform, Recovery, and Enforcement Act (“FIRREA”), and suggested a reward commensurate with that provided under the False Claims Act (up to 30% of the sanction imposed) to induce employees to come forward with information.