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Issues To Consider From The Analogic Enforcement Action

Issues

This previous post went in-depth regarding last week’s $14.9 million Foreign Corrupt Practices Act enforcement action against Analogic Corp. and a related entity.

This post continues the analysis by highlighting various issues to consider.

Sparse Allegations

Rarely has an SEC enforcement action against an issuer contained such few allegations against, well, the issuer.

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The SEC Frequently Alleges Or Finds Only Books And Records And Internal Controls Violations In FCPA Enforcement Actions

SEC

This recent post highlighted critical commentary regarding the recent BHP Billiton enforcement action.

One theme from much of the commentary was that the BHP action was somehow unique in charging (or finding as the case may be since it was an SEC administrative action) books and records and internal controls violations in the absence of anti-bribery violations.

More broadly, some FCPA commentators have suggested (here and here) that the SEC is placing a new emphasis on internal controls in the absence of anti-bribery violations.

However, the enforcement approach in BHP Billiton was hardly unique and more broadly the SEC has long charged or found books and records and internal controls violation in the absence of anti-bribery violations or findings.

Set forth below are numerous instances over the past five years in which the SEC has alleged or found only books and records and internal controls violations in Foreign Corrupt Practices Act enforcement actions.  (All actions can be found on the SEC’s FCPA website).

2014

Avon
Bruker
HP

In other words 3 of 7 (43%) corporate SEC FCPA enforcement actions in 2014 did not allege or find anti-bribery violations.

2013

ADM
Stryker
Philips Electronics

In other words, 3 of 8 (38%) corporate SEC FCPA enforcement actions did not allege or find anti-bribery violations.

2012

Allianz
Oracle
Pfizer
Orthofix

In other words, 4 of 8 (50%) corporate SEC FCPA enforcement actions did not allege of find anti-bribery violations.

2011

Aon
Watts Water
Diageo
Comverse
Rockwell Automation
Ball Corp
IBM
Tenaris

In other words 8 of 13 (62%) corporate SEC FCPA enforcement actions did not allege or find anti-bribery violations.

2010

Natco
Veraz Networks
General Electric

In other words, 3 of 19 (16%) corporate SEC FCPA enforcement actions did not allege or find anti-bribery violations.  (Note 2010 enforcement statistics are impacted by the 7 related Panalpina enforcement actions.  If one counts these related actions as one, 3 of 12 (25%) corporate SEC FCPA enforcement actions did not allege or find anti-bribery violations).

So prominent is SEC FCPA enforcement actions without anti-bribery violations or findings that the term non-bribery charged disgorgement has been part of the FCPA vocabulary for years.  (See here).

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