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SEC Commissioner Calls The SEC’s Approach To Corporate Penalties “Fundamentally Flawed”

Crenshaw

In the FCPA’s modern era of enforcement, the bulk of SEC settlement amounts consist of disgorgement and prejudgment interest (See here). Stated differently (and although there have been a few notable exceptions), civil penalties are not a major feature of most corporate SEC Foreign Corrupt Practices Act enforcement actions.

Even so, SEC civil penalties can be FCPA relevant and it is thus interesting to note that SEC Commissioner Caroline Crenshaw (appointed by President Trump and sworn into office in August 2020) recently stated that the SEC’s historical practice of placing emphasis on factors beyond the actual misconduct when imposing corporate penalties is “fundamentally flawed.”

In this recent speech before the Council of Institutional Investors , Crenshaw began by stating how an SEC decision made 15 years (see here) “has taken us off course.”

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The Biggest Loser In The Beam Enforcement Action Is FCPA Enforcement

biggestloser

For years, the DOJ has encouraged business organizations to voluntarily disclose Foreign Corrupt Practices Act issues.

For years, the DOJ has talked about transparency, consistency and predictability when it comes to FCPA enforcement. For instance, as highlighted in this prior post, in 2018 the DOJ’s Principal Deputy Assistant Attorney General gave a speech in which he stated that the DOJ recognizes “the need for better defined ‘rules of the road’ in corporate enforcement” and that the DOJ “has taken affirmative steps to make our prevailing ‘rules of the road’ as plain and predictable as possible.” Numerous other DOJ speeches or policy statements could also be cited.

This post highlighted the DOJ’s recent $19.6 million enforcement action against Beam Suntory – a highly unusual development given that the SEC previously brought a related enforcement action against the company approximately 2.5 years ago concerning the same core conduct. As highlighted in the prior post and below, several other aspects of the DOJ enforcement action were also unusual.

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FCPA Enforcement Officials Address COVID-19 Related Questions

Soapbox

Earlier this week, Daniel Kahn (Sentior Deputy Chief, DOJ Criminal Division – Fraud Section) and Charles Cain (SEC FCPA Unit Chief) participated in this webinar.

During the webinar, Kahn and Cain addressed a variety questions related to their respective enforcement agencies relative to the COVID-19 crisis.

Set forth below are the issues addressed and their responses.

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FCPA Flash Podcast – A Conversation With Philip Urofsky Regarding 2019 FCPA Developments

FCPA Flash

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 podcast episode is a conversation with Philip Urofsky (Shearman & Sterling and former DOJ FCPA prosecutor). Recently, the firm issued it always information “Recent Trends and Patterns in Enforcement of the FCPA” and during the podcast Urofsky talks about: (i) whether the government has continued to advance expansive FCPA enforcement theories; (ii) the government’s expectations surrounding cooperation including whether the government could be more specific; and (iii) new players in the anti-corruption enforcement world.

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The DOJ’s Latest Voluntary Disclosure Guidance Is Absurd

absurd

Yet again, see here for a prior post, the Department of Justice recently revised its Foreign Corrupt Practices Act Corporate Enforcement Policy (CEP) – originally released in November 2017. (See here for the current version).

As highlighted below, while two of the three revisions make sense, the revision concerning voluntary disclosure is absurd.

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