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Friday Roundup

Roundup

Clayton responds, from the dockets, Bitkower to FCPA Inc., and a student writing competition. It’s all here in the Friday roundup.

Clayton Responds

This previous post highlighted the FCPA portion of the recent confirmation hearing of SEC Chair nominee Jay Clayton. In follow-up written questions, Senator Sherrod Brown (D-OH) asked: “The Foreign Corrupt Practices Act (FCPA) forbids U.S. companies and their subsidiaries from paying foreign government officials to obtain or retain business. What is your specific plan for enforcement of the FCPA.”

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Additional Data Points Relevant To Brockmeyer’s Tenure As SEC FCPA Unit Chief

brockmeyer

Earlier this week, the SEC announced that its FCPA Unit Chief, Kara Brockmeyer, will soon be leaving.

Similar to prior DOJ/SEC press releases upon FCPA enforcement attorneys leaving the government, the SEC’s release largely defines Brockmeyer’s tenure in terms of quantity of enforcement actions brought and settlement amounts secured. (See here for a prior post discussing this dynamic). The vast majority of this FCPA enforcement, because of the prominence of SEC administrative actions as well as NPAs and DPAs, occurred in the absence of any judicial scrutiny.

This post highlights additional data points relevant to Brockmeyer’s tenure as SEC FCPA Unit Chief, a position she assumed in September 2011 after the SEC’s first formal FCPA Unit Chief Cheryl Scarboro departed (see here for the prior post).

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SEC Chair Nominee Clayton – Because Of Exposure To FCPA And Related Laws “There Are Some Jurisdictions Where In The Vast Majority Of The Cases It May Make Sense Just Not To Participate”

Sullivan & Cromwell partner Jay Clayton testifies before the Senate Committee on Banking, Housing, and Urban Affairs during his confirmation hearing to become the next Chairman of the U.S. Securities and Exchange Commission in Washington.  March 23, 2017.

The flawed New Yorker article about the Trump Organization and its potential FCPA liability (see prior posts here and here as well as additional commentary here) continues to percolate.

During yesterday’s Senate Committee on Banking, Housing and Urban Affairs hearing on Jay Clayton’s nomination to head the SEC, the below exchange took place between Senator Sherrod Brown (D-Ohio) and Clayton.

It was the only Foreign Corrupt Practices Act related question posed to Clayton during the hearing. (See this prior post for coverage of a report titled“The FCPA and its Impact on International Business Transactions – Should Anything Be Done to Minimize the Consequences of the U.S.’s Unique Position on Combating Offshore Corruption?” by the Clayton-chaired International Business Transactions Committee of the Association of the Bar of the City of New York).

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Civil Monetary Penalties In SEC FCPA Enforcement Actions

SEC

This recent speech by Acting SEC Chairman Michael Piwowar received some coverage based on the following sentence from the speech: “I am generally comfortable with assessing civil monetary penalties in Foreign Corrupt Practices Act cases.”

It’s unclear what Piwowar really meant by this statement.

As highlighted below, approximately 40% of SEC corporate FCPA enforcement actions since 2010 have included civil monetary penalties even if such penalties have traditionally been a very minor component of overall settlement amounts because of the dominance of disgorgement and prejudgment interest.

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Further To The SEC’s Inconsistent Approach To Enforcing The FCPA’s Books And Records And Internal Controls Provisions

inconistent

As highlighted in previous posts on this subject (here and here), a basic rule of law principle is consistency.

In other words, the same legal violation ought to be sanctioned in the same way. When the same legal violation is sanctioned in materially different ways, trust and confidence in law enforcement is diminished.

However, there sure does seem to be a lack of consistency between how the SEC resolves Foreign Corrupt Practices Act books and records and internal controls violations.

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