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The Top Ten List Of Corporate FCPA Settlements

top ten

Everybody, it seems, likes “Top Ten” lists.

This post highlights the top ten corporate FCPA settlements of all-time.

It seems odd saying this, but the list (unlike other lists) only includes enforcement actions where the corporate defendant was charged with or found to be in violation of the FCPA’s provisions (not other laws). In addition, the list highlights net FCPA settlement amounts actually secured by U.S. law enforcement after consistently accounting for (unlike other lists) certain credits or deductions in several enforcement actions involving foreign companies.

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Trace’s Bribery Risk Matrix Restates The Obvious

captain obvious

Recently Trace International, which calls itself “the world’s leading anti-bribery standard setting organization,” released its Trace Bribery Risk Matrix.

Like other rankings of bribery and corruption, there is nothing per se wrong with the Bribery Risk Matrix. However, as stated several times on these pages (see here and here), I am not sure what these rankings really do (other than generate media coverage for the organization releasing the rankings) given that they generally restate the obvious (hence the picture of “Captain Obvious”).

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An FCPA Enforcement Action Against A U.S. Company Is More Than Twice As Likely To Originate From A Voluntary Disclosure Compared To An FCPA Enforcement Action Against A Non-U.S. Company

Statistical Analysis

At last week’s FCPA Institute – Boston (attended by a diverse group of professionals from leading companies and firms from around the world) a participant asked about any differences between the percentage of U.S. company Foreign Corrupt Practices Act enforcement actions that originate with a voluntary disclosure vs. FCPA enforcement actions against non-U.S. companies that originate with a voluntary disclosure.

I responded that U.S. company enforcement actions were much more likely to result from voluntary disclosures compared to non-U.S. company enforcement actions, but promised to provide the actual numbers and they are set forth below (courtesy of FCPAnalytics).

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The Percentage Of SEC FCPA Enforcement Actions That Also Involve A DOJ Component

percentage

In this recent Corporate Crime Reporter interview, former SEC FCPA Unit Chief Kara Brockmeyer was asked: “are you noticing since you left the SEC a shift to the Justice Department not joining the SEC as much on FCPA cases?”

Borckmeyer responded: “When you are at the government for a long period of time, you see the pendulum swing back and forth. Yes, we are in a period, particularly in the FCPA area, where we saw the Department of Justice step away from a number of cases that were SEC only FCPA enforcement actions. There was a period of time where the Department was on every case that the SEC brought in the FCPA area. Now, the Department seems to be picking their battles on where they want to expend their resources.”

What do the numbers actually show? As highlighted below, between 2010 and 2014 the DOJ was involved in approximately 70% of SEC enforcement actions. Between 2015 to the present, the DOJ was involved in approximately 40% of SEC enforcement actions. [Keep in mind that the universe of enforcement actions (i.e. the denominator) is not that large and each enforcement action comprises approximately 2% of the total]

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Do We Really Need C = T – O To Tell Us Things We Already Likely Know?

scratchhead

I recently came across Risk Advisory’s Corruption Challenges Index. In perhaps a dig at Transparency International’s Corruption Perception Index (see here for a recent post) Risk Advisory states:

“We’ve looked at a number of factors above and beyond the simple perceived local corruption threat, to give a more nuanced and balanced evaluation of where the real challenges of negotiating corruption risks lie. These factors include such things as levels of FCPA enforcement action and local industry risks, as well as how information flows affect a company’s ability to understand who exactly it’s dealing with; how media reporting can be slanted according to the publisher, for example, or the willingness of people to talk openly about the likelihood and frequency of requests for bribes.”

Sounds fairly sophisticated – or nuanced – shall I say; however my response to the Corruption Challenges Index is the same as my response to the Corruption Perceptions Index: does the compliance community really need surveys or formulas (such as C = T – O read more below) to tell us things we already likely know. (See here for the prior post).

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