An Open Invitation To The DOJ And SEC To Refute These Numbers

As highlighted in this prior post, at a recent American Bar Association event Kara Brockmeyer (Chief of the SEC’s FCPA Unit) and Patrick Stokes (Chief of the DOJ’s FCPA Unit) spoke on a panel titled “DOJ-SEC FCPA Update:  Trends and Significant Developments.”

Towards the end of the panel, after hearing Brockmeyer and Stokes carry forward enforcement agency rhetoric concerning individual prosecutions, I asked the following general question.

The DOJ and SEC frequently talk about individual FCPA enforcement actions and indeed recognize the importance of individual enforcement in maximizing deterrence.  However, the reality is that since 2008 approximately 80% of corporate FCPA enforcement actions lack any related enforcement action against company employees.  Indeed, the SEC has not brought an individual FCPA enforcement action in nearly 2.5 years.  Is one possible explanation for these statistics – that corporate FCPA enforcement actions do not necessarily represent provable FCPA violations?

Both Brockmeyer and Stokes strongly disagreed with my statistics and called them false, wrong, deeply flawed, etc.

Stokes also seemed to hint at FCPA enforcement that is not public (see this prior post regarding apparent secret FCPA enforcement) as well as FCPA charges that are currently under seal and thus not yet publicly known.  The later point is obviously valid as the public can only keep FCPA enforcement statistics based on information currently in the public domain.

In other respects however, Stokes merely did what former DOJ Deputy Assistant Attorney General Denis McInerney did when I highlighted the same general statistics at a public conference in May 2013 (see here); in other words Stokes talked about the small minority of cases in which a corporate employee has indeed been charged in connection with a corporate FCPA enforcement action.

In addition, Stokes also mentioned a number of instances in which the DOJ has charged individuals with FCPA charges. This of course is true, but as highlighted in prior posts here and most recently here, it must be noted that the DOJ appears to follow a clear “clustering” approach in charging individuals.  For instance (with statistics calculated through the end of 2013,  53% of the individuals charged by the DOJ with FCPA criminal offenses since 2008 have been in just four cases and 75% of the individuals charged by the DOJ since 2008 have been in just nine cases.  In other words, just a few cases (such as 22 individuals in the failed Africa Sting case, 9 individuals in the Haiti Teleco case, 8 individuals in the Control Components case, 8 individuals in the Siemens case – and most recently 6 individuals in the April 2014 Indian mining license case) account for the substantial bulk of individual FCPA charges.

For approximately two years (see prior posts here and here) I have been keeping the below statistics.

I now “show my work” and the below data is based on public information found on the DOJ and SEC’s websites (see here and here).

I invite the DOJ and SEC to refute these numbers and commit to publishing any response the DOJ and SEC sends to me.  I can be e-mailed at fcpaprofessor@gmail.com

For starters, the easiest statistic is the fact that the SEC has not brought an individual FCPA enforcement action in approximately 2.5 years.  As clearly evidenced from the SEC’s FCPA website, the last individual FCPA action was in April 2012 against Garth Peterson.

The next statistic is that since 2008, the SEC has brought 68 corporate FCPA enforcement actions.  As highlighted by the below chart, 12 of these actions have resulted in a related enforcement action against a company employee.  Thus, 82% of corporate SEC FCPA enforcement actions since 2008 have not resulted in any related enforcement action against a company employee.

SEC

The next statistic is that since 2008, the DOJ has brought 63 corporate FCPA enforcement actions.  As highlighted by the below chart, 16 of these actions have resulted in a related enforcement action against a company employee.  Thus, 75% of corporate FCPA enforcement actions since 2008 have not resulted in any related enforcement action against a company employee.

DOJ