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Corporate FCPA Enforcement In 2015 Compared To Prior Years

Previous posts this week (see here [1] and here [2]) separately analyzed SEC and DOJ corporate Foreign Corrupt Practices Act enforcement in 2015.

Viewing FCPA enforcement statistics this way is useful and informative given that the DOJ and SEC are separate law enforcement agencies and different issues may arise in DOJ and SEC FCPA enforcement actions.

Accepting year-to-year FCPA statistics for what they are, the issue remains:  how best to analyze and interpret these statistics over time?

Here is how I see it through reference to another example.  In year 1, a city issues 100 speeding tickets and collects $20,000 in fines associated with those tickets.  In year 2, a city issues 90 speeding tickets, but because certain drivers were going really fast, the city collects $25,000 in fines associated with those tickets.  Was there less enforcement in year 2 compared to year 1?  Depends on what you are measuring – the number of infractions or amount of fines.

The some logic applies to year-to-year FCPA statistical data and I believe that the best way to track yearly enforcement is through the number of “core” enforcement actions.

By this measure and as highlighted below, overall corporate FCPA enforcement in 2015 was up slightly compared to 2014 and 2013 corporate enforcement even though DOJ corporate FCPA enforcement in 2015 was at its lowest level since 2006 and even though overall FCPA settlement amounts were well below historical averages.

Corporate DOJ FCPA Enforcement Actions

Year

Core Actions

2015

2

2014

7

2013

7

2012

9

2011

11

2010

17

Corporate SEC FCPA Enforcement Actions

Year

Core Actions

2015

9

2014

7

2013

8

2012

8

2011

13

2010

19

Corporate DOJ FCPA Enforcement Action Settlement Amounts

Year

Settlement Amounts

2015

$24.2 million

2014

$1.25 billion

2013

$420 million

2012

$142 million

2011

$355 million

2010

$870 million

Corporate SEC FCPA Enforcement Action Settlement Amounts

Year

Settlement Amounts

2015

$115 million

2014

$327 million

2013

$300 million

2012

$118 million

2011

$148 million

2010

$530 million

Viewing FCPA enforcement in the aggregate (DOJ and SEC combined) is of course also useful and informative and in 2015 the DOJ and SEC combined collected approximately $139 million in 11 core corporate enforcement actions.

The below chart provides a summary of corporate FCPA enforcement data (DOJ and SEC combined) for the years 2007-2015, as well as notable circumstances that significantly skewed enforcement data statistics for particular years.

Corporate FCPA Enforcement Actions (2007-2015)

Year

Core Actions

Settlement Amounts

Of Note

2007

15

$149 million

Six enforcement actions involved Iraq   Oil for Food conduct and these enforcement actions comprised 40% of all enforcement actions and approximately 50% of the $149 million amount.

2008

10

$885 million

The $800 million Siemens enforcement action comprised approximately 90% of the $885 million amount.

2009

11

$645 million

The $579 million KBR / Halliburton   Bonny Island, Nigeria enforcement action comprised approximately 90% of the $645 million amount.

2010

21

$1.4 billion

Six enforcement actions, all resolved   on the same day, centered on various oil and gas companies use Panalpina in   Nigeria. Panalpina also resolved an enforcement action on the same day.Two   enforcement actions (Technip and Eni / Snamprogetti) involved Bonny Island   conduct. In other words, there were 14 unique corporate enforcement actions   in 2010. Of further note, the two Bonny Island enforcement actions,  Technip($338 million) and Eni/Snamprogetti ($365 million) comprised   approximately 50% of the $1.4 billion amount.

2011

16

$503 million

The $219 million JGC Corp. Bonny   Island, Nigeria enforcement action comprised approximately 44% of the $503 million amount

2012

12

$260 million

None that significantly skewed the   statistics

2013

9

$720 million

The $398 million Total enforcement  action comprised approximately 55% of the $720 million amount

2014

10

 $1.6 billion Two enforcement actions (Alstom – $772 million and Alcoa – $384 million) comprised approximately 72% of the $1.6 billion amount.

2015

11

$139 million None that significantly skewed the   statistics
  TOTALS

115

$6.37 billion