White Collar Litigation

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Three developments since October 1 extend the buildout of DOJ’s fraud enforcement infrastructure that we covered in our prior post on the Fraud Division’s Priorities Memo and Strike Force expansion. First, Assistant Attorney General Colin M. McDonald of the National Fraud Enforcement Division (the Fraud Division) issued Directive 26-12, a memorandum on the Division’s corporate enforcement priorities (Corporate Enforcement Memo). Second, the U.S. Attorney’s Office for the Eastern District of Pennsylvania (EDPA) announced the creation of an Interagency Fraud Task Force (IFTF) combining the Fraud Division with 14 other federal agencies. Third, on October 7, AAG McDonald issued Directive 26-13, directing a comprehensive, all-tools approach across charging, asset recovery, cooperation, pretrial detention, and sentencing. Together, these developments continue DOJ’s effort to formalize both the substantive standards it will apply to fraud cases and the interagency infrastructure used to identify them.

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On September 30, 2026, the United States Court of Appeals for the Third Circuit revived a putative securities fraud class action against Ocugen, Inc., a small, publicly traded pharmaceutical company, holding that a stock’s rapid price recovery after a corrective disclosure cannot, on its own, prove that an earlier misstatement was immaterial. In re Ocugen, Inc. Securities Litigation, No. 25-2653 (3d Cir. Sept. 30, 2026). The decision abrogates what the court itself labeled the “Oran-Burlington rule,” a line of Third Circuit precedent stretching back nearly 30 years. For practitioners defending or bringing Section 10(b) claims in Pennsylvania, New Jersey, or Delaware federal courts, the ruling removes a familiar tool from the motion-to-dismiss toolkit and replaces it with a more fact-intensive materiality inquiry.

On September 30, 2026, the University of Missouri-Kansas City School of Law hosted the inaugural Heartland Government Enforcement & Investigations Conference. The day-long program brought together federal prosecutors, judges, state regulators, in-house counsel, and private practitioners across seven substantive sessions spanning DOJ enforcement priorities, federal sentencing and discovery practice, healthcare fraud, legal ethics and artificial intelligence, state antitrust enforcement, internal investigations, and securities and commodities regulation. Below is a summary of each session.

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Executive Summary

On September 18, 2026, the Department of Justice (DOJ) announced two substantial revisions to the Justice Manual that will materially affect False Claims Act (FCA) enforcement and defense strategy:

  • Guidance Documents: DOJ will no longer treat sub-regulatory guidance (CMS manuals, FDA interpretive memos, etc.) as creating independently enforceable legal obligations in FCA cases. The government must prove violations of statutes, regulations, or contracts.
  • Qui Tam Dismissals: DOJ will more actively consider dismissing qui tam cases in which DOJ declines to intervene, both at the time of declination and as the litigation proceeds. (Under the Supreme Court’s Polansky standard, reviewing courts are likely to grant these motions in all but extraordinary circumstances.)

As we move into the last months of 2026, the contours of white-collar enforcement differ in some notable ways from those that defined 2025. The Department of Justice (DOJ) has undergone structural shifts and reorganizations, new task forces have reached early milestones, and enforcement tools that had seen less use have reemerged. Below are six developments worth watching.

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This summer, defense contractors have received two very different signals about federal cybersecurity compliance. On one front, the Department of Justice (DOJ) is continuing to pursue False Claims Act (FCA) liability for contractors that misrepresent their cybersecurity posture—now with two settlements in quick succession targeting noncompliance with NIST SP 800-171 requirements. On the other, the newly renamed Department of War suspended the next phase of the Cybersecurity Maturity Model Certification (CMMC) program. Neither development changes the baseline obligations contractors already have, but together they illustrate how fluid—and consequential—this space remains.

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For the past year, the regulatory fight over prediction markets has been waged primarily between two camps: the U.S. Commodity Futures Trading Commission (CFTC), which asserts exclusive federal jurisdiction over event contracts as regulated derivatives, and a growing number of states that characterize sports-linked event contracts as unlicensed sports betting. Recent developments have added a new dimension that operators and their distribution partners should be tracking closely. In recent weeks, a major U.S. city and thousands of individual consumers have raised legal claims that do not depend on resolving the federal-preemption question. Baltimore has sued Kalshi and Polymarket under its municipal consumer protection ordinance, the New York City Council has launched an investigation into the industry’s marketing practices, and a wave of consolidated consumer class actions is advancing through federal court.

Each of these actions proceeds on legal theories that are largely independent of the CFTC’s exclusive-jurisdiction dispute—and each raises distinct strategic considerations for the companies involved.

gavel on a money

The U.S. Department of Justice (DOJ) continues to treat Paycheck Protection Program (PPP) loan fraud as an enforcement priority. As we have noted in prior updates covering both criminal and civil enforcement, the pace of new cases has not slowed. Below is an overview of significant PPP-related civil enforcement actions from late 2025 through July 2026. In the coming days, we will post a second blog with an update on criminal enforcement.

Judge's gavel on table in office

On June 4, 2026, The United States Court of Appeals for the Fourth Circuit issued a decision affirming the dismissal of a False Claims Act (FCA) suit for failure to meet Rule 9(b)’s pleading requirements—i.e., failing to state with “particularity the circumstances constituting fraud or mistake.” The decision marks an important victory for FCA defendants faced with vague or imprecise allegations of wrongdoing.