Recently Trace International released its Trace Bribery Risk Matrix.
Like other rankings of bribery and corruption, there is nothing per se wrong with the Bribery Risk Matrix. However, as stated several times on these pages (see here and here), I am not sure what these rankings really do (other than generate media coverage for the organization releasing the rankings) given that they generally restate the obvious (hence the picture of “Captain Obvious”).
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).
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.
In fiscal year 2010, the Securities and Exchange Commission created a specialized unit (one of only five in its enforcement division “dedicated to particular highly specialized and complex areas of securities law“) devoted to enforcing the FCPA.
The question arises however: does the SEC really even need a specific FCPA unit?
The below post highlights how, based on the SEC’s own enforcement statistics, FCPA enforcement actions comprise a minuscule percentage of its overall enforcement actions as well as other quantitative and qualitative factors relevant to the question posed.
Last year was a record-breaking year in terms of Foreign Corrupt Practices Act settlement amounts as the DOJ/SEC collected approximately $2.65 billion.
With this week’s record-setting $1.66 billion net FCPA settlement involving Goldman Sachs, 2020 has eclipsed 2019 as the DOJ/SEC are poised to collect $2.66 billion in FCPA settlement amounts. This amount is likely to grow with approximately two months left in 2020 as the end of the year historically is an active period for FCPA enforcement.
