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DOJ’s McFadden Makes Sense When Talking About “Declinations” And States That FCPA Investigations Should Be “Measured In Months, Not Years”

mcfadden

Yesterday, Acting Principal Deputy Assistant Attorney General Trevor McFadden deliver this speech in Washington, D.C.

Sure, like a prior recent speech, McFadden did read from the “DOJ’s FCPA script,” but to his credit he did say some important things about FCPA compliance that is refreshing to hear from the DOJ. In addition, McFadden’s statement that his “intent is for our FCPA investigations to be measured in months, not years” should be welcome news to the business community. However, the DOJ has been saying the same thing for years and a wait and see approach is most prudent. For instance, in this 2005 speech then DOJ Assistant Attorney General for the Criminal Division Christopher Wray talked about “real-time enforcement” and stated: “in other words, punishing wrongdoers promptly after they commit their crimes. Simply put, speed matters in corporate fraud investigations . The days of five-year investigations, of agreement after agreement tolling the statute of limitations-while ill-gotten gains are frittered away and investor confidence sinks-are increasingly a thing of the past.”

Moreover, as highlighted in more detail below, McFadden made sense when talking about DOJ “declinations” and his reasons for why the DOJ may not bring a Foreign Corrupt Practices Act enforcement action in an instance of FCPA scrutiny undermines the “declination” definition used by certain FCPA Inc. participants.

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Issues To Consider From The Rolls-Royce Enforcement Action

Issues

This previous post went in-depth into the $170 million Foreign Corrupt Practices Act enforcement action against U.K. based Rolls-Royce announced on January 17th. This post continues the analysis by highlighting additional issues to consider.

Unusual Aspect of the DPA

The Rolls-Royce DPA contains an unusual feature. Of the approximate $170 criminal penalty “$30 million will be paid to the Consumer Financial Fraud Fund.”

This has never happened before in an FCPA enforcement and set forth below is my e-mail exchange with the DOJ press office on this issue.

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Issues To Consider From The SQM Enforcement Action

Issues

This previous post went in-depth into the $30.5 million Foreign Corrupt Practices Act enforcement action against Sociedad Quimica y Minera de Chile S.A. (SQM) announced on January 13th.  The action focused on the Chilean chemical and mining company’s conduct with Chilean officials.

As mentioned in the original post, there was no U.S. nexus alleged other than SQM having Series B shares, a form of American Depository Shares, listed on the New York Stock Exchange and thus being required to file periodic reports with the SEC.

This post highlights additional issues to consider.

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The Gray Cloud Of FCPA Scrutiny Lasted Too Long In 2016

Gray Cloud

This recent post highlighted the origins of corporate Foreign Corrupt Practices Act enforcement actions in 2016.

Continuing with the FCPA statistical feast, this post follows the chronology of FCPA scrutiny to FCPA enforcement and highlights one of the most troubling policy issues when it comes to FCPA enforcement.

That is – FCPA scrutiny simply lasts too long. Specifically, as highlighted below, 4.25 years was the median length of time companies that resolved FCPA enforcement actions in 2016 were under scrutiny.

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Issues To Consider From The General Cable Enforcement Action

Issues

This prior post went in-depth into last week’s $75.8 million Foreign Corrupt Practices Act enforcement action against General Cable Corporation and this post continues the analysis by highlighting additional issues to consider.

Timeline

The SEC’s resolution document states that General Cable “promptly self-reported the potential FCPA violations to the Commission’s staff in January 2014.” As highlighted in this prior post, General Cable’s first mention of its FCPA scrutiny in SEC filings appears to be September 2014.

From start to finish, General Cable’s FCPA scrutiny lasted approximately three years. While three years is obviously shorter than the 4-6 years seen in certain FCPA inquiries, three years is still too long of time for FCPA scrutiny to last for a company that voluntarily disclosed and cooperated.

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