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SEC Commissioner Hester Peirce On “Reasonableness Pants” And “Secret Law”

Peirce

This site is a big fan of SEC Commissioner Hester Peirce and this post highlights two recent speeches she delivered. Neither of the speeches are FCPA specific, but both are indeed FCPA relevant.

In this speech, titled “Reasonableness Pants,” Peirce stated: “A strong enforcement program requires us—to draw from the admonition a judge recently gave to us in a matter before her—to “put on [our] reasonableness pants.” The SEC ought always to wear reasonableness pants, and I would like to talk today about what those reasonableness pants look like on a regulator.”

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Deputy Assistant Attorney General Matthew Miner On ….

miner

Recently Deputy Assistant Attorney General Matthew Miner delivered this speech at an American Bar Association event in Prague.

During the speech, Miner touched upon international cooperation; the DOJ’s so-called “no piling on” policy; the DOJ’s “Evaluation of Corporate Compliance Programs” guidance document; gathering evidence in foreign countries; voluntary disclosure, cooperation and so-called declinations; and enforcement actions against foreign companies.

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Principal Deputy Associate Attorney General – “Subregulatory Guidance Isn’t Law – It’s Just Paper”

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This previous post discussing the DOJ’s recent release of a non-binding guidance document titled “The Evaluation of Corporate Compliance Programs” (ECCP) noted that the ECCP is not a legal document that establishes liability for non-compliance. In other words, if compliance professionals and others strive to have a compliance program that exceeds statutory requirements that is great, but it is not legally required. (See also this recent FCPA Flash podcast episode discussing related concepts as well as here).

Earlier this week new Principal Deputy Associate Attorney General Claire McCusker Murray (pictured) delivered this speech in which she touches upon similar issues and made the spot-on observation that “subregulatory guidance isn’t law – it’s just paper.”

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Things That Caught My Eye In The DOJ’s Evaluation Of Corporate Compliance Programs Guidance Document

caughteye

This prior post went in-depth into the DOJ’s recently released “Evaluation of Corporate Compliance Programs” (ECCP) guidance document. This post continues the analysis by highlighting additional issues in the ECCP that caught my eye

For starters, there is nothing “wrong” with the ECCP per se. In fact, it is a nicely written and organized document. Substantively however, the ECCP uses the word “effective” 49 times, but there is no legal requirement that business organizations have “effective” compliance programs.

If a business organization wants to exceed the statutory standards set forth in the FCPA’s internal controls provisions (“controls sufficient to provide reasonable assurances” that certain objective are met) that is great! However, the legal and policy concern with the ECCP is that in an official U.S. government document the DOJ says it is going to base decisions about prosecutions and form of resolutions, monetary penalties, and compliance obligations in corporate criminal resolutions on specific factors, most of which, are not even found in any law passed by Congress.

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DOJ Releases “The Evaluation Of Corporate Compliance Programs” Guidance Document

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Earlier this week, the DOJ Criminal Division released this guidance document titled “The Evaluation of Corporate Compliance Programs” (ECCP).

The latest version of the guidance document which “sets forth topics that the Criminal Division has frequently found relevant in evaluating a corporate compliance” is likely to generate a substantial amount of coverage. However, there is little new substantive information in the document compared to the DOJ’s February 2017 release of its Evaluation of Corporate Compliance Programs (see here for the prior post) and in fact there was little new information in the February 2017 document as it cited to sources long in the public domain). Indeed, the ECCP contains a spot-on footnote which states that many of the topics discussed appear in other resources long in the public domain.

While the ECCP is not Foreign Corrupt Practices Act specific, it is FCPA relevant. Nevertheless, the policy issue raised with the ECCP (as well as other forms of DOJ guidance) is what should happen if a business organization acts consistent with the factors, but an employee nevertheless exposes the entity to legal liability. Consistent with the FCPA-like laws of many peer countries, this should be relevant as a matter of law and not merely in the opaque, inconsistent, and unpredictable world of DOJ decision making. (See here).

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