Disgorgement Archives - FCPA Professor

FCPA Flash Podcast – A Conversation With Jane Shvets Regarding 2020 FCPA Developments

By Mike Koehler on February 11, 2021 in Beam Inc., Disgorgement, DOJ, DOJ “Piling On” Policy, FCPA Flash, Statute of Limitations

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 Jane Shvets (Debevoise & Plimpton). Recently, the firm released it always informative FCPA Update and during the podcast Shvets talks about: (i) FCPA relevant portions of the recently enacted National Defense Authorization Act for Fiscal Year 2021; (ii) whether the DOJ’s “anti-piling” policy is indeed true in practice; (iii) the unusual Beam enforcement action and what it says about FCPA enforcement; and (iv) what the future may hold for FCPA enforcement.

Congress Buries Expansion Of SEC Disgorgement Authority In Annual Defense Budget

By Mike Koehler on December 21, 2020 in Disgorgement, Guest Posts, Kokesh

A guest post from Gibson Dunn attorneys Barry Goldsmith, Helgi Walker, M. Jonathan Seibald, and Brian Richman.

On December 11, 2020, Congress fulfilled its constitutional obligation “to provide for the common defense,”[1] passing for the 60th consecutive year the National Defense Authorization Act (“NDAA”), H.R. 6395. Buried on page 1,238 of this $740.5 billion military spending bill is an amendment to the Securities Exchange Act of 1934. That amendment gives the Securities and Exchange Commission, for the first time in its history, explicit statutory authority to seek disgorgement in federal district court. It also doubles the current statute of limitations for disgorgement claims in certain classes of cases. The amendment appears to be a direct response to recent Supreme Court decisions limiting the SEC’s authority.

Observations From The OECD’s Phase 4 U.S. Review Report

By Mike Koehler on November 19, 2020 in Affirmative Defense – Promotional Expenses, Deferred Prosecution Agreements, Disgorgement, Enforcement Agency Policy, Facilitating Payments, FCPA Statistics, Individual Enforcement Action, Industry Sweeps, Kokesh, Non-Prosecution Agreement, Obtain or Retain Business, OECD, Origins of FCPA Actions, Statute of Limitations, Voluntary Disclosure, Whistleblowers, Yates Memo

Recently, the OECD released its Phase 4 review of the United State’s implementation of the OECD Anti-Bribery Convention … in effect a review of the FCPA, its enforcement, and related issues.

The first question one needs to ask themselves is whether they care what “experts from Argentina and the United Kingdom” (as stated by the OECD “the report and its recommendations reflect the findings of experts from Argentina and the United Kingdom”) think about the U.S. Foreign Corrupt Practices Act, U.S. law enforcement (DOJ and SEC) policies and practices, and U.S. jurisprudence.

In any event, the Phase 4 Report “explores issues such as detection, enforcement, corporate liability, and international cooperation, as well as covering unresolved issues from prior reports.” (See here for a 2010 post summarizing the OECD’s Phase 3 review).

Top 20 SEC Disgorgement Amounts

By Mike Koehler on November 11, 2020 in Disgorgement, FCPA Statistics

The Foreign Corrupt Practices Act contains specific penalty provisions for both violations of the anti-bribery and books and records and internal control provisions. However, in the FCPA’s modern era there has been a dramatic shift by the SEC away from the FCPA’s statutory penalties in most corporate enforcement action towards disgorgement.

The 2004 FCPA enforcement action against ABB is believed to be the first FCPA enforcement in which the SEC sought a disgorgement remedy and since then the SEC has secured approximately $4.9 billion in disgorgement (and associated pre-judgment interest) in approximately 140 corporate enforcement actions. Set forth below is the current top 20 list of SEC disgorgement amounts.

Issues To Consider From The Herbalife Enforcement Action

By Mike Koehler on September 1, 2020 in Disgorgement, Gray Cloud, Herbalife, Internal Controls, Root Causes

This prior post went in-depth into the recent $123 million Foreign Corrupt Practices Act enforcement action against Herbalife and this post highlights additional issues to consider.

Timeline

As highlighted in this post, Herbalife disclosed its FCPA scrutiny in early 2017. Thus, from start to finish, its scrutiny lasted more than 3.5 years. I’ve said it many times, and will continue saying it until the cows come home, if the DOJ/SEC wants their FCPA enforcement programs to be viewed as credible and effective they must resolve instances of FCPA scrutiny much quicker.

This is particularly true in the Herbalife matter given that the conduct focused on a single country as well as the following language from the enforcement agencies.

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FCPA Flash Podcast – A Conversation With Jane Shvets Regarding 2020 FCPA Developments

Congress Buries Expansion Of SEC Disgorgement Authority In Annual Defense Budget

Observations From The OECD’s Phase 4 U.S. Review Report

Top 20 SEC Disgorgement Amounts

Issues To Consider From The Herbalife Enforcement Action

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