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5th Circuit Interprets “Awarded For Victims” Language From Supreme Court’s Liu Decision

By on October 14, 2021 in Disgorgement
Judicial Decision

As highlighted in this prior post, in June 2020 the Supreme Court concluded in Liu v. SEC  that “a disgorgement award that does not exceed a wrongdoer’s net profits and is awarded for victims is equitable relief permissible” under 78u(d)(5) (a statutory provision  which states in pertinent part that “in any action or proceeding brought or instituted by the [SEC] under any provision of the securities laws … any Federal court may grant .. any equitable relief that may be appropriate or necessary for the benefit of investors.”

As often happens, the Supreme Court provided a general framework for lower courts to analyze an issue without specifically defining what the key terms of the framework actually means.

Recently the Fifth Circuit addressed what the term “awarded for victims” means – becoming the first court of appeals to do so since Liu was decided.

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In Resolving The Berko Enforcement Action, What About Liu?

By on June 25, 2021 in Asante Berko, Disgorgement, Uncategorized, Victims
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As highlighted in this prior post, in June 2020 the Supreme Court concluded in Liu v. SEC that “a disgorgement award that does not exceed a wrongdoer’s net profits and is awarded for victims is equitable relief permissible” under 15 USC  78u(d)(5) (a statutory provision which states in pertinent part that “in any action or proceeding brought or instituted by the Commission under any provision of the securities laws … any Federal court may grant .. any equitable relief that may be appropriate or necessary for the benefit of investors.”).

The previous post mentioned that because most SEC FCPA enforcement actions are resolved administratively – and thus subject to a different statutory provision – that Liu was technically not applicable to most SEC FCPA enforcement actions.

However, the recent FCPA settlement in SEC v. Berko (see here for the prior post) was the first SEC FCPA enforcement action filed in federal court since Liu and thus subject to the Supreme Court’s conclusion that “a disgorgement award that does not exceed a wrongdoer’s net profits and is awarded for victims is equitable relief permissible” under 15 USC  78u(d)(5).

However, as highlighted below, the SEC ignored Liu’s “and is awarded to victims” prong and encouraged the court to require Berko to nevertheless pay disgorgement which the court ordered – seemingly in violation of Liu.

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

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

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Congress Buries Expansion Of SEC Disgorgement Authority In Annual Defense Budget

By on December 21, 2020 in Disgorgement, Guest Posts, Kokesh
Capital Hill

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.

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

By 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
oecd

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).

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