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Top 20 SEC Disgorgement Amounts

Disgorgement

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.

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Issues To Consider From The Herbalife Enforcement Action

Issues

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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Issues To Consider From The World Acceptance Corp. Enforcement Action

Issues

This prior post went in-depth into the SEC’s recent $21.7 million Foreign Corrupt Practices Act enforcement action against World Acceptance Corp. (WAC) and this post highlights additional issues to consider.

Timeline

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

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Justice Thomas Provides A Disgorgement History Lesson And Asks An Important Question

justicethomas

Yesterday’s post highlighted the Supreme Court’s decision in Liu v. SEC in which the court held that for purposes of 15 USC 78u(d)(5) (concerning SEC actions in federal court) 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).

The decision was 8-1 as Justice Clarence Thomas dissented.

As discussed below, in his dissent Justice Thomas provided a disgorgement history lesson and asked an important question with Foreign Corrupt Practices Act implications.

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