International Regulatory Enforcement (PHIRE)

Déjà-vu All Over Again: Government Enforcement in Response to Economic Crises

May 06, 2020

Michael L. Spafford, Daren F. Stanaway, Michael S. Wise & Noah Pinegar

With the dust from enforcement actions stemming from the post-2008 recession beginning to settle, COVID-19 (“Coronavirus”) has thrust the world into an uncertain economic future. Companies must confront the obvious public health implications of COVID-19, as well as pandemic-induced shocks to supply chains, demand conditions, and business operations. Many will debate the similarities and differences between 2008 and 2020, but one similarity is apparent and inescapable: a crisis requiring trillions of dollars of government stimulus invites significant regulatory oversight and enforcement scrutiny. This oversight and scrutiny will look not only for the causes of the crisis, but also reactions thereto, by both public and private actors. Company actions, including those viewed as necessary to respond to the crisis, will be evaluated by government investigators in hindsight with a rearview mirror after the crisis has subsided and in the light of subsequent events and perceived consequences not known at the time of the crisis. If the past is prologue, the following areas will draw the most governmental interest and may require extra diligence.

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