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”
March 24, 2017
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).
March 24, 2017
Netherlands-based ING NV, a company with shares listed on the New York Stock Exchange, recently disclosed:
“ING Bank is the subject of criminal investigations by Dutch authorities regarding various requirements related to the on-boarding of clients, money laundering and corrupt practices. ING Groep has also received related information requests from U.S. authorities. ING Groep and ING Bank are cooperating with such ongoing investigations and requests. It is currently not feasible to determine how the ongoing investigations and requests may be resolved or the timing of any such resolution, nor to estimate reliably the possible timing, scope or amounts of any resulting fines, penalties and/or other outcome, which could be significant.”
March 23, 2017
The Foreign Corrupt Practices Act specifically authorizes the DOJ to civilly (not just criminally) enforce the statute against non-issuers.
Indeed, between 1991 and 2001 approximately 35% of all DOJ corporate FCPA enforcement actions were civil actions. However, the last time the DOJ invoked this express statutory remedy was in 2001 and the question is posed: why has the DOJ stopped civilly enforcing the FCPA?
Make sure to read to the end of the post to hear the DOJ’s non-responsive answer to this question.
Perhaps instead of creating new ways to enforce the FCPA not even mentioned in the statute (such as non-prosecution agreements, deferred prosecution agreements and most recently declinations with disgorgements) the DOJ should go back to enforcing the FCPA in ways expressly authorized by Congress.
Once Upon A Time, The DOJ Did Specifically Identify “Foreign Officials” And Rep. Ros-Lehtinen Is Miffed That It Doesn’t Now
March 22, 2017
There are several material differences between how the DOJ enforces the Foreign Corrupt Practices Act in the modern era compared to the past.
For instances, as highlighted in this previous post, in the modern era the vast majority of corporate FCPA enforcement actions do not result in related individual charges against company employees. Between 1977 – 2004, the exact opposite was true – most corporate FCPA enforcement actions did result in related individual charges.
For most of the FCPA’s history, the DOJ either charged a business organization suspected of FCPA violations with an offense or did not charge the organization. In the modern era, the DOJ has created a buffet of options (non-prosecution agreements, deferred prosecution agreements) and added “declinations with disgorgements” to the buffet line in September 2016 (see here for the prior post).
As highlighted in this post, for many years the DOJ specifically identified “foreign officials” implicated in an FCPA enforcement action. However, in the modern era of FCPA enforcement the DOJ does not and Rep. Ileana Ros-Lehtinen (R-FL)(pictured) is rightfully miffed.
March 21, 2017
The FCPA Flash podcast provides in an audio format the same fresh, candid, and informed commentary about the Foreign Corrupt Practices Act and related topics as readers have come to expect from written posts on FCPA Professor.
This FCPA Flash episode is a conversation with Jay Darden (Paul Hastings and former Assistant Chief of the DOJ’s Fraud Section). In the episode, Darden discusses what FCPA practitioners need to understand about being a DOJ FCPA attorney and along the same lines what DOJ FCPA enforcement attorneys need to understand about being an FCPA practitioner. Darden also provides a list of things he would change about the FCPA or FCPA enforcement and comments on recent FCPA enforcement actions concerning internship and hiring practices.
FCPA Flash is sponsored by Kroll. Kroll is trusted by companies and compliance officers worldwide to help prevent, detect, and remediate FCPA challenges with scalable, end-to-end compliance solutions: from high-volume third party screening and automated monitoring, to risk-based due diligence, to complex investigations and monitorships.