DOJ’s Civil Rights Fraud Initiative Raises False Claims Act Risks for Healthcare and Life Sciences Companies

In a Reuters article, Sidley partners Jaime Jones, Kristin Graham Koehler and Boyd Greene examine how the U.S. Department of Justice’s Civil Rights Fraud Initiative could create new False Claims Act (FCA) exposure for healthcare and life sciences companies that receive federal funding or contract with the federal government. The initiative seeks to use the FCA to pursue organizations that allegedly violate federal civil rights laws while certifying compliance with contractual, grant or funding requirements.

President Trump Issues Executive Order to Enhance Customs Enforcement

President Trump’s June 3, 2026 Executive Order on customs enforcement signals a significant expansion of the Administration’s America First Trade Policy beyond tariffs and trade remedies. The order directs the Department of Homeland Security and U.S. Customs and Border Protection (CBP) to undertake a broad range of reforms aimed at strengthening customs enforcement, including heightened importer vetting, increased bond requirements, expanded supply-chain disclosure obligations, and stricter penalties for noncompliance. The order also focuses on nonresident importers of record, imposing new restrictions that could affect foreign companies that have long relied on established import structures and procedures to access the U.S. market. Because many of the contemplated changes can be implemented through CBP rulemaking and guidance rather than legislation, importers should expect significant regulatory developments over the coming months. Companies that import goods into the United States should begin assessing the potential impact on their customs compliance programs, supply chains, and import operations.

Prediction Markets and Insider Trading: Why Organizations Should Update Compliance Policies Now

As prediction markets expand to cover corporate, regulatory, and geopolitical events, organizations face new compliance risks when employees, directors, or other insiders possess nonpublic information that could affect the value of event contracts.

In this post, we examine the first insider trading case involving prediction markets, discuss the government’s position that existing insider trading and antifraud principles apply to these markets, and outline practical steps organizations can take to strengthen their governance frameworks. We also explore why existing insider trading, confidentiality, and code of conduct policies may be insufficient and provide recommendations for updating policies, training, and compliance controls to address this emerging risk area.

Read our analysis of the evolving regulatory landscape and the measures organizations should consider to mitigate legal, reputational, and compliance risks associated with prediction market activity.

New Clarity Emerges on DOJ’s Fraud Enforcement Reorganization

In remarks delivered on June 3, 2026, at the American Conference Institute’s Global Anti-Corruption, Ethics & Compliance Conference in New York City, Assistant Attorney General A. Tysen Duva, the head of the U.S. Department of Justice’s (“DOJ”) Criminal Division, provided the clearest public indication to date of how DOJ intends to divide fraud enforcement responsibilities between the Criminal Division’s Fraud Section and the newly created National Fraud Enforcement Division (“NFED”).

Under the emerging structure, NFED will focus on government program fraud, i.e., criminal offenses involving public payers and public systems, including taxpayer-funded programs, while the Criminal Division’s Fraud Section will remain focused on private-sector market, consumer, and corporate fraud matters—a traditional strength of the Unit previously known as Market Integrity & Major Frauds, which will remain part of the Criminal Division. Duva further emphasized that the Fraud Section will be focusing on securities and major financial fraud schemes, global fraud, and prediction markets, and is actively looking to further build capacity by hiring talented lawyers.

The remarks largely confirm earlier expectations that DOJ would eventually provide greater clarity regarding the respective roles of the Criminal Division and NFED following NFED’s creation. We examine what Duva’s comments reveal about DOJ’s enforcement priorities, staffing changes, and the implications for future enforcement activity.

Supreme Court Rules for SEC on Disgorgement Awards

In a win for the U.S. Securities and Exchange Commission (“SEC”), the U.S. Supreme Court ruled today in Sripetch v. SEC, No. 25-466 (June 4, 2026) that an SEC disgorgement award does not require proof of pecuniary loss by investors. The case involved the new statutory disgorgement remedy (in Exchange Act Section 21(d)(7)) that Congress added in 2021, following the Supreme Court’s decisions in Kokesh and Liu, which together curtailed the SEC’s disgorgement remedy by subjecting it to statutory time limits and equitable constraints.

The practical result is that the SEC will have a somewhat easier time obtaining disgorgement awards in future enforcement cases. But the Supreme Court’s decision explicitly left open a number of interesting questions: whether the equitable constraints identified in Liu apply to the new statutory disgorgement remedy (the Court assumed here that they do), whether disgorgement is available when it is infeasible to distribute funds to investors, and whether the Seventh Amendment jury trial right under Jarkesy is implicated by the disgorgement remedy. How the SEC pursues disgorgement awards going forward may implicate all those questions and lead to future litigation. We’ll be watching closely.

DOJ Signals Increasing Scrutiny of Vertically Integrated Healthcare Companies

On May 19, 2026, Nicole Sarrine, Deputy Assistant Attorney General (DAAG) for Civil Conduct in the U.S. Department of Justice (DOJ) Antitrust Division, signaled increasing suspicion of vertically integrated companies in the healthcare sector in remarks delivered at the Transparency Rising 2026 National Forum.[1] (more…)

U.S. Attorney’s Office in Chicago Announces Reforms For Grand Jury Proceedings

On May 27, 2026, the United States Attorney’s Office for the Northern District of Illinois announced that it had implemented internal reforms concerning the Office’s practices and disclosures related to grand juries. The announcement followed the recent discovery of extensive prosecutorial misconduct before a grand jury resulting in dismissal with prejudice of the high-profile “Broadview Six” prosecutions. While the details of the reforms remain unclear, the announcement reflects a recognition that change was needed to address past practices and may provide an opportunity for criminal defendants to seek grand jury disclosures and relief if misconduct is uncovered.

CFTC Division of Enforcement Issues New Cooperation Policy

The CFTC’s Division of Enforcement has issued a significant new policy on cooperation that reshapes how self-reporting, cooperation, and remediation will affect enforcement outcomes. The May 19, 2026 Staff Advisory replaces prior guidance and, for the first time, creates a defined framework for when the Division may decline to recommend an enforcement action altogether.

The policy establishes detailed criteria for declinations, including prompt voluntary self-reporting, full cooperation, timely remediation, and restitution or disgorgement, while also introducing structured penalty reduction tiers of up to 75% for parties that cooperate even if they do not qualify for a declination. At the same time, the guidance raises the stakes on timing, requiring parties to report misconduct “at the earliest possible opportunity.”

The new internal guidance provides important insight into how the Division intends to exercise prosecutorial discretion and will have significant implications for firms evaluating potential misconduct, internal investigations, and disclosure decisions. Read the full Sidley post for a detailed analysis of the policy’s requirements, cooperation credit framework, and practical considerations for market participants. The CFTC press release can be found here.

(more…)

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Yuet Ming Tham

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Daniel C. Craig

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Alexandria Daugherty

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Geeta Malhotra

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Michael D. Mann

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Ian McGinley

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Karen A. Popp

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Kevin Rubino

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Frank R. Volpe

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Marisa S. West

Washington, D.C.
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Angela M. Xenakis

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