Category: FCPA Statistics

Corporate FCPA Enforcement In 2015 Compared To Prior Years

Previous posts this week (see here and here) separately analyzed SEC and DOJ corporate Foreign Corrupt Practices Act enforcement in 2015.

Viewing FCPA enforcement statistics this way is useful and informative given that the DOJ and SEC are separate law enforcement agencies and different issues may arise in DOJ and SEC FCPA enforcement actions.

Accepting year-to-year FCPA statistics for what they are, the issue remains:  how best to analyze and interpret these statistics over time?

Here is how I see it through reference to another example.  In year 1, a city issues 100 speeding tickets and collects $20,000 in fines associated with those tickets.  In year 2, a city issues 90 speeding tickets, but because certain drivers were going really fast, the city collects $25,000 in fines associated with those tickets.  Was there less enforcement in year 2 compared to year 1?  Depends on what you are measuring – the number of infractions or amount of fines.

The some logic applies to year-to-year FCPA statistical data and I believe that the best way to track yearly enforcement is through the number of “core” enforcement actions.

By this measure and as highlighted below, overall corporate FCPA enforcement in 2015 was up slightly compared to 2014 and 2013 corporate enforcement even though DOJ corporate FCPA enforcement in 2015 was at its lowest level since 2006 and even though overall FCPA settlement amounts were well below historical averages.

Corporate DOJ FCPA Enforcement Actions

Corporate SEC FCPA Enforcement Actions

Corporate DOJ FCPA Enforcement Action Settlement Amounts

Corporate SEC FCPA Enforcement Action Settlement Amounts

Viewing FCPA enforcement in the aggregate (DOJ and SEC combined) is of course also useful and informative and in 2015 the DOJ and SEC combined collected approximately $139 million in 11 core corporate enforcement actions.

The below chart provides a summary of corporate FCPA enforcement data (DOJ and SEC combined) for the years 2007-2015, as well as notable circumstances that significantly skewed enforcement data statistics for particular years.

Corporate FCPA Enforcement Actions (2007-2015)

DOJ Enforcement Of The FCPA – Year In Review

This previous post highlighted facts and figures from SEC enforcement of the FCPA in 2015.

This post highlights facts and figures from corporate DOJ FCPA enforcement in 2015. (See here for a similar post from 2014, here for a similar post from 2013, here for a similar post from 2012, here for a similar post from 2011, and here from 2010).

When reviewing the statistics below, keep in mind that there were only 2 corporate FCPA enforcement actions in 2015. Thus, certain of the below statistics are largely meaningless, yet nevertheless highlighted for comparative purposes.

Settlement Amounts and Specifics

In 2015, the DOJ brought 2 corporate FCPA enforcement actions (the lowest number of corporate DOJ FCPA enforcement actions since 2006).

By comparison, in 2014, the DOJ brought 7 corporate FCPA enforcement actions; in 2013 the DOJ brought 7 corporate enforcement action; in 2012 the DOJ brought 9 corporate FCPA enforcement actions; in 2011 the DOJ brought 11 corporate enforcement actions; and in 2010 the DOJ brought 17 corporate enforcement actions.  (Note:  these figures  use the “core” approach to FCPA statistics – see here for the prior post – an approach also endorsed by the DOJ – see here).

In the 2 corporate FCPA enforcement actions from 2014, the DOJ collected approximately $24.2 million in criminal fines.

By comparison, in the 7 corporate FCPA enforcement actions from 2014, the DOJ collected approximately $1.25 billion in criminal fines (an all-time record in terms of yearly FCPA settlement amounts);  in the 7 corporate FCPA enforcement actions from 2013, the DOJ collected approximately $420 million in criminal fines; in 2012, the DOJ collected approximately $142 million in criminal fines; in 2011, the DOJ collected approximately $355 million in criminal fines ($504 million including the $149 million forfeiture in the Jeffrey Tesler individual enforcement action); and in 2010, the DOJ collected approximately $870 million in criminal fines.

Corporate DOJ FCPA enforcement in 2015 ranged from $17.1 million (Louis Berger) to $7.1 million (IAP Worldwide). Both enforcement actions were DOJ only and involved privately-held companies.

In the 1 corporate FCPA enforcement actions where an analysis was possible, the DOJ agreed to a criminal fine at the minimum range suggested by the sentencing guidelines.

[Note – the IAP Worldwide enforcement action was resolved via an NPA and the DOJ does not set forth a guidelines range in NPAs]

Corporate vs. Individual Prosecutions

Of the 2 corporate DOJ enforcement actions in 2015, 2 (100%) resulted in related DOJ prosecutions of company employees. Notwithstanding this 2015 statistic, as highlighted in this prior post, approximately 75% of DOJ corporate enforcement actions since 2008 have not (at least yet) resulted in any DOJ charges against company employees.

The DOJ announced 8 individual FCPA enforcement actions in 2015 (Harder, Rama, Hirsch/McClung, Garcia, Condrey and Rincon / Shiera) in 6 core actions.

Stay tuned for future posts specifically about DOJ and SEC individual FCPA enforcement actions in 2015.

NPAs / DPAs

In 2015, 2 of the 2 (100%) DOJ corporate enforcement actions were resolved via an NPA (IAP Worldwide) or a DPA (Louis Berger).

By way of comparison, in 2014, 5 of the 7 (71%) DOJ corporate enforcement actions included an NPA or DPA; in 2013, 100% of corporate DOJ enforcement actions involved either an NPA or DPA; in 2012 100% of corporate DOJ enforcement actions involved either an NPA or a DPA;  in 2011 82% of corporate DOJ enforcement actions involved either an NPA or DPA; and in 2010 94% of corporate DOJ enforcement actions involved either an NPA or DPA.

Since 2010, approximately 85% of corporate DOJ enforcement actions have involved either an NPA or DPA.

Voluntary Disclosures

Of the 2 DOJ corporate enforcement actions in 2015, 1 enforcement action (50%) was the result of a corporate voluntary disclosure.

[Note – the Louis Berger DPA states as follows:  “after the government had made [the company] … aware of a False Claim Act investigation, [the company] conducted an internal investigation, discovered potential FCPA violations, and voluntarily self-reported to the [DOJ] the misconduct.” The origin of the IAP Worldwide action is unclear as the NPA makes no mention of voluntary disclosure or other potential origins of the action.]

By way of comparison, of the 7 corporate DOJ FCPA enforcement actions in 2014, 2 enforcement actions (29%) were the result of corporate voluntary disclosures; in 2013 57% of corporate FCPA enforcement actions were the result of corporate voluntary disclosures or the direct result of a related voluntary disclosure; in 2012, 78% of corporate FCPA enforcement actions were the result of corporate voluntary disclosures or casually related to previous corporate voluntary disclosures; in 2011, 73% of corporate FCPA enforcement actions were the result of corporate voluntary disclosures.

Monitors

Of the 2 corporate DOJ FCPA enforcement actions in 2015, 1 (50%) enforcement action (Louis Berger) resulted in a corporate monitor.

By way of comparison, of the 7 corporate DOJ FCPA enforcement actions in 2014, 1 (14%) resulted in a corporate monitor; of the 7 corporate DOJ FCPA enforcement actions in 2013, 4 enforcement actions (57%) involved a monitor; of the 9 corporate DOJ FCPA enforcement actions in 2012, 3 enforcement actions (33%) involved a monitor; of the 11 corporate DOJ FCPA enforcement actions in 2011, 1 enforcement action (9%) involved a corporate monitor; of the 17 corporate DOJ enforcement actions in 2010, 7 enforcement actions (41%) involved a corporate monitor.

This remainder of this post provides an overview of corporate DOJ FCPA enforcement in 2015.

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Louis Berger Int’l.  (July 17th)

See here for the prior post

Charges:  Conspiracy to violate the FCPA’s anti-bribery provisions

Resolution Vehicle:  DPA

Guidelines Range:  $17.1 million – $34.2 million

Penalty:  $17.1 million.

Disclosure:  The DPA states: “after the government had made [the company] … aware of a False Claim Act investigation, [the company] conducted an internal investigation, discovered potential FCPA violations, and voluntarily self-reported to the [DOJ] the misconduct”

Monitor:  Yes

Individuals Charged:  Yes

IAP Worldwide Services Inc.  (June 16th)

See here for the prior post

Charges:  Not applicable.

Resolution Vehicle:  NPA

Guidelines Range:  None set forth in the NPA.

Penalty:  $7.1 million.

Disclosure:  Unclear, the NPA makes no mention of voluntary disclosure or other potential origins of the action.

Monitor:  No

Individuals Charged:  Yes

SEC Enforcement Of The FCPA – Year In Review

This is the first of several posts regarding FCPA 2015 enforcement statistics and issues to be published on FCPA Professor this month.

Yearly FCPA enforcement statistics are interesting, particularly when compared to prior years, but any yearly statistic contains an arbitrary cutoff date and is thus of marginal value.

Moreover, statistics are calculated against the universe of enforcement activity in any given year and in 2015 there were 9 corporate SEC enforcement actions and just 2 corporate DOJ enforcement actions. With such low denominators, yearly enforcement statistics are of further marginal value.

With such limitations in mind, let the 2015 FCPA enforcement statistics begin.

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Foreign Corrupt Practices Act enforcement, it is not just about the DOJ.

Granted, as a civil enforcement agency the SEC’s sticks are less sharp than the DOJ’s, but the SEC also claims a significant piece of the FCPA enforcement pie (query whether it should – but that is a subject for another day – for instance as discussed in “The Story of the Foreign Corrupt Practices Act” the SEC wanted no part in enforcing the FCPA’s anti-bribery provisions).

Today’s post is a year in review of SEC FCPA Enforcement.  (See here for a similar post for 2014; here for a similar post for 2013; here for a similar post for 2012; here for a similar post for 2011; and here for a similar post for 2010).

Stay tuned for a similar post on DOJ FCPA enforcement in 2015.

As highlighted below, four statistics stand out from corporate SEC FCPA enforcement in 2015:

(i) unlike in prior years where several SEC corporate enforcement actions also had a DOJ component, each SEC corporate enforcement action in 2015 was a “stand-alone” action;

(ii) compared to prior years, civil penalties comprised a much larger percentage of SEC settlement amounts;

(iii) consistent with prior years, SEC enforcement was largely corporate only as only 2 of the 9 corporate enforcement actions also resulted in related enforcement actions against company employees; and

(iv) compared to prior years, a lower percentage of corporate enforcement actions were the result of voluntary disclosures, but rather originated from pro-active FCPA investigations.

Settlement Amounts and Specifics

In 2015, the SEC collected approximately $114.8 million in 9 corporate FCPA enforcement actions.

By comparison, in 2014 the SEC collected approximately $327 million in 7 corporate FCPA enforcement actions; in 2013 the SEC collected approximately $300 million in 8 corporate enforcement actions; in 2012 the SEC collected approximately $118 million in 8 corporate FCPA enforcement actions; in 2011 the SEC collected approximately $148 million in 13 corporate FCPA enforcement actions; and in 2010, the SEC collected approximately $530 million in 19 corporate FCPA enforcement actions.

The range of SEC FCPA enforcement actions in 2015 was, on the high end, $25 million (BHP Billiton), and on the low end, $75,000 (Hyperdynamics). The median settlement amount was approximately $14.7 million.

All SEC corporate FCPA enforcement actions in 2015 were SEC only – a noticeable difference from prior years in which many SEC corporate FCPA enforcement actions also involved a DOJ component.

Of the 9 corporate enforcement actions from 2015, 7 enforcement actions (78%) were administrative actions, 1 enforcement action (PBSJ) was a deferred prosecution agreement and 1 enforcement action (Hitachi) was a settled civil complaint filed in federal court.

In other words, there was no judicial scrutiny of 89% of SEC FCPA enforcement actions from 2015. By comparison, in 2014 there was no judicial scrutiny of 86% of SEC FCPA enforcement actions and in 2013 there was no judicial scrutiny of 50% of SEC FCPA enforcement actions.

In 2015, the SEC collected approximately $45.2 million in disgorgement and prejudgment interest in enforcement actions that did not charge anti-bribery violations. This is noteworthy because many question, and rightfully so, whether disgorgement is an appropriate remedy in cases that do not charge FCPA anti-bribery violations.  See here for a prior post on so-called “no-charged bribery disgorgement” cases.

By way of comparison, in 2014 the SEC collected approximately $104 million in disgorgement and prejudgment interest in no-charged bribery disgorgement cases; in 2013, the SEC collected approximately $208 million in disgorgement and prejudgment interest in no-charged bribery disgorgement cases; in 2012, the SEC collected approximately $57.4 million in disgorgement and prejudgment interest in no-charged bribery disgorgement cases; and in 2011 the SEC collected approximately $51 million in disgorgement and prejudgment interest in n0-charged bribery disgorgement cases.

The $114.8 million the SEC collected in 2015 FCPA enforcement actions breaks down as follows:

$56.2 million in a civil penalties (Bristol-Myers, Hyperdynamics, Hitachi, BNY Mellon, Mead Johnson, BHP Billiton, FLIR Systems, and PBSJ); and

$58.6 million in disgorgement and prejudgment interest.

This division (only 51% of SEC FCPA settlement amounts in 2015 consisted of disgorgement and prejudgment interest) is noteworthy because in 2014 99% of SEC FCPA settlement amounts in 2014 consisted of disgorgement and prejudgment interest; in 2013 98% of SEC FCPA settlement amounts consisted of disgorgement and prejudgment interest; in 2012 86% of SEC FCPA settlement amounts consisted of disgorgement and prejudgment interest; in 2011, disgorgement and prejudgment interest comprised 94% of SEC FCPA enforcement settlement amounts; and in 2010, disgorgement and prejudgment interest comprised 96% of SEC FCPA enforcement settlement amounts.

If one tries to analyze why some SEC FCPA enforcement actions in 2015 included a civil penalty, disgorgement and prejudgment interest (PBSJ, FLIR Systems, BNY Mellon, Mead Johnson and Bristol-Myers), whereas other enforcement actions included only disgorgement and prejudgment interest (Goodyear), whereas other enforcement actions included only a civil penalty (BHP Billiton, Hyperdynamics, and Hitachi) good luck and please enlighten us all with your insight.

Corporate vs. Individual Actions

Of the 9 corporate SEC FCPA enforcement actions from 2015, 2 (22%) (PBSJ and FLIR Systems) have involved, at present, related SEC charges against company employees.

By way of comparison, in 2014 of the 7 corporate SEC FCPA enforcement actions from 2014, 0 (0%) have involved, at present, related SEC charges against company employees; in 2013 of the 8 SEC corporate FCPA enforcement actions 0 (0%) have involved, at present, related SEC charges against company employees; in 2012, 0 of the 8 corporate (0%) FCPA actions involved related SEC charges against company employees; in 2011, 2 of the 13 (15%) corporate SEC FCPA enforcement actions involved related SEC charges against company employees; in 2010, 3 of the 19 (15%) corporate SEC FCPA enforcement actions involved related SEC charges against company employees.

Voluntary Disclosures

Of the 9 corporate SEC FCPA enforcement actions from 2015, 3 enforcement actions (33%) (PBSJ, Goodyear, and FLIR Systems) were the result of corporate voluntary disclosures. 5 enforcement actions (BHP Billiton, Hyperdynamics, BNY Mellon, Mead Johnson and Bristol-Myers) would appear to be the result of pro-active SEC investigations (i.e. issuance of subpoenas, industry sweeps). The origin of 1 enforcement action (Hitachi) is not specified in the resolution documents.

In  terms of voluntary disclosure, by way of comparison of the 7 corporate SEC FCPA enforcement actions from 2014, 4 enforcement actions (57%) were the result of corporate voluntary disclosures; of the 8 corporate SEC FCPA enforcement actions in 2013, 3 enforcement actions (38%) were the result of corporate voluntary disclosures; in 2012 of the 8 corporate SEC FCPA enforcement actions 4 (50%) were the result of corporate voluntary disclosures; and in 2011 of the 13 corporate SEC FCPA enforcement actions 11 (85%) were the result of corporate voluntary disclosures.

This remainder of this post provides an overview of SEC FCPA enforcement in 2015.

Bristol-Myers Squibb (October 5th)

See here and here for prior posts

Charges:   None. Administrative cease and desist order finding violations of the FCPA’s books and records and internal controls provisions

Settlement:  $14.7 million ($11.4 million in disgorgement, prejudgment interest of $500,000, and a civil penalty of $2.75 million)

Disclosure: According to the company’s disclosures, its FCPA scrutiny began in 2006 when the SEC informed the company that it had begun a formal inquiry into the activities of certain of the company’s subsidiaries and its employees and agents. In March 2012, the company received a subpoena from the SEC issued in connection with its investigation under the FCPA, primarily relating to sales and marketing practices in various countries.

Individuals Charged:  No

Related DOJ Enforcement Action:  No.

Hyperdynamics (Sept. 29th)

See here for the prior post

Charges:   None. Administrative cease and desist order finding violations of the FCPA’s books and records and internal controls provisions

Settlement:  $75,000 civil penalty.

Disclosure: According to the company’s disclosure –  ”the SEC had issued a subpoena to Hyperdynamics concerning possible violations of the FCPA”

Individuals Charged:  No

Related DOJ Enforcement Action:  No.

Hitachi  (Sept. 28th)

See here and here for prior posts

Charges:   Settled civil complaint charging FCPA books and records and internal controls violations.

Settlement:  $19 million civil penalty.

Disclosure:   Not specified in the resolution documents.

Individuals Charged:  No

Related DOJ Enforcement Action:  No.

BNY Mellon (August 18th)

See here and here for prior posts.

Charges:   None.  Administrative cease and desist order finding violations of the FCPA’s anti-bribery and internal control provisions.

Settlement:  $14.8 million ($8.3 million in disgorgement, $1.5 million in prejudgment interest, and a $5 million penalty).

Disclosure:   Unclear from the resolution documents (perhaps the industry sweep of the financial services industry)

Individuals Charged:  No.

Related DOJ Enforcement Action:  No.

Mead Johnson (July 28th)

See here and here for prior posts.

Charges:   None.  Administrative cease and desist order finding violations of the FCPA’s books and records and internal controls provisions.

Settlement:  Approximately $12 million ($7.77 million in disgorgement, $1.26 million in prejudgment interest, and a $3 million penalty).

Disclosure:  The resolution documents state: “In 2011, Mead Johnson received an allegation of possible violations of the FCPA in connection with the Distributor Allowance in China. In response, Mead Johnson conducted an internal investigation, but failed to find evidence that Distributor Allowance funds were being used to make improper payments to HCPs. Thereafter, Mead Johnson China discontinued Distributor Allowance funding to reduce the likelihood of improper payments to HCPs, and discontinued all practices related to compensating HCPs by 2013. Mead Johnson did not initially self-report the 2011 allegation of potential FCPA violations and did not thereafter promptly disclose the existence of this allegation in response to the Commission’s inquiry into this matter.

Individuals Charged:  No.

Related DOJ Enforcement Action:  No.

BHP Billiton (May 20)

See here, here and here for prior posts.

Charges:   None.  Administrative cease and desist order finding violations of the FCPA’s books and records and internal control provisions.

Settlement:  $25 million civil penalty.

Disclosure:   The company disclosed that it received information requests from the SEC in August 2009.

Individuals Charged:  No

Related DOJ Enforcement Action:  No.

FLIR Systems (April 8th)

See here and here for prior posts.

Charges:   None.  Administrative cease and desist order finding violations of the FCPA’s anti-bribery, books and records and internal control provisions.

Settlement:  Approximately $9.5 million (disgorgement of $7,534,000, prejudgment interest of $970,584 and a penalty of $1 million).

Disclosure:   Voluntary disclosure.

Individuals Charged:  Yes in November 2014 (see here for the prior post).

Related DOJ Enforcement Action:  No.

Goodyear (Feb. 24th)

See here, here and here for prior posts.

Charges:  None.  Administrative cease and desist order finding violations of FCPA’s books and records and internal controls provisions.

Settlement:  $16,228,065 (disgorgement of $14,122,525 and prejudgment interest of $2,105,540).

Disclosure: Voluntary disclosure.

Individuals Charged:  No

Related DOJ Enforcement Action: No

PBSJ (Jan. 22nd)

See here for a prior post.

Charges: Violations of the FCPA’s anti-bribery, books and records, and internal controls provisions.

Settlement:  The charges were resolved via a deferred prosecution agreement in which the company agreed to pay approximately $3.4 million (disgorgement and interest of $3,032,875 and a penalty of $375,000).

Disclosure: Voluntary Disclosure

Individuals Charged:  Yes (see below).

Related DOJ Enforcement Action:  No.

SEC Enforcement (Individual)

The SEC brought two FCPA enforcement actions against individuals in 2015.  The enforcement actions are summarized below.

Vicente Garcia (August 12th)

See here for the prior post

Charges: None.  Administrative cease and desist order finding violations of the FCPA’s anti-bribery provisions and internal controls provisions.

Settlement:  Garcia consented to the entry of the cease-and-desist order and agreed to pay disgorgement of $85,965, which is the total amount of kickbacks he received, plus prejudgment interest of $6,430 for a total of $92,395.

Employer Charged:  Garcia was the former head of Latin America sales for SAP, but at present the company has not been charged

Related DOJ Enforcement Action:  Yes

Walid Hatoum (January 22nd)

See here for the prior post

Charges: None.  Administrative cease and desist order finding violations of the FCPA’s anti-bribery, internal controls, and books and records provisions.

Settlement:  Hatoum consented to the entry of the cease-and-desist order and agreed to pay a $50,000 civil penalty.

Employer Charged:  Yes, Hatoum was a former President of PBSJ lnt’l and PBSJ also resolved an FCPA enforcement action on the same day.

Related DOJ Enforcement Action:  No.

Potpourri

Individual FCPA Charges

Reuters reports:

“Two men including an oil equipment supply firm executive have been arrested on charges related to an alleged scheme to corruptly secure energy contracts from Venezuela’s state-owned energy company, the U.S. Justice Department said Sunday. Roberto Rincon, the president of Texas-based Tradequip Services & Marine, was arrested on Wednesday in Houston on charges including that he violated the Foreign Corrupt Practices Act and engaged in money laundering, a Justice Department spokesman said. A second defendant, Abraham Jose Shiera Bastidas of Coral Gables, Florida, was arrested on Wednesday in Miami on the same charges plus one count, said the Justice Department spokesman, Peter Carr. The charges relate to what the Justice Department called a fraudulent and corrupt scheme to secure energy contracts from Petroleos de Venezuela S.A. (PDVSA), Venezuela’s state-owned energy company. Lawyers for Rincon, 55, and Shiera, 52, could not be identified on Sunday. Further details on the case were not immediately available. No charging documents have been made public yet. It was also not clear if case related to Tradequip, which describes itself as an oil field supply company. The firm on its website lists PDVSA as a client, and it is registered on Venezuela’s national contractors registry. Tradequip did not respond to a call and email seeking comment. PDVSA did not respond to a request for comment.”

See here for the criminal indictment.

Sweet Group

A follow-up to a U.K. SFO enforcement action previously announced in early December (see here).

Last Friday, the SFO announced:

“Sweett Group PLC has … pleaded guilty at Southwark Crown Court to an offence under Section 7 of the Bribery Act 2010 regarding conduct in the Middle East. The Serious Fraud Office charged Sweett Group PLC earlier this month, having opened an investigation on 14th July 2014 into the company in relation to its activities in the UAE and elsewhere. Sweett Group PLC will be sentenced on 12th February 2016 at Southwark Crown Court.”

The only publicly available document at this point states:

“Between 1 December 2012 and 1 December 2015 Sweet Group PLC, being a relevant commercial organisation, failed to prevent the bribing of Khaled Al Badie by an associated person, namely Cyril Sweet International Limited, their servants and agents, which said bribing was intended to obtain or retain business, and/or an advantage in the conduct of business, for Sweet Group PLC, namely securing and retaining a contract with Al Ain Ahia Insurance Company for project management and cost consulting services in relation to the building of a hotel in Dubai, contrary to Section 7(1) of the Bribery Act 2010.”

The Sweet Group action closely follows the Standard Bank failure to prevent bribery enforcement action (see here for prior posts) and represents the second instance under the Bribery Act of a business organization being held accountable for “failure to prevent”foreign bribery.

Global Fraud Survey

According to Kroll’s annual Global Fraud survey (a survey of 768 senior executives worldwide from a broad range of industries and functions from January through March 2015):

11% of companies have been affected by corruption and bribery during the past 12 months (the 6th highest type of fraud on the list) and 40% of companies describe themselves as highly or moderately vulnerable to this type of fraud (the 5th highest on the list).

Corruption and bribery were the highest among companies in India, Russia and China.

How Many Foreign Companies Are Issuers Under The FCPA?

The Foreign Corrupt Practices Act does not just apply to U.S. companies.

Rather, foreign companies that are listed on a U.S. stock exchange or otherwise required to file periodic reports with the SEC are “issuers” and thus subject to the FCPA’s books and records and internal controls provisions as well as the anti-bribery provisions under the dd-1 prong of the statute to the extent the “mails or any means or instrumentality of interstate commerce” are used in furtherance of a bribery scheme.

In addition, any foreign company or national can be subject to the FCPA’s anti-bribery provisions under the dd-3 prong of the statute which requires that “while in the territory of the United States” corrupt use of the mails or any means or instrumentality of interstate commerce or any other act in furtherance of a bribery scheme.

Against this backdrop, one might wonder how many foreign companies are issuers under the FCPA?

Each year, the SEC’s Division of Corporation Finance releases a chart titled “Number of Foreign Companies Registered and Reporting with the U.S. Securities and Exchange Commission.” Set forth below are the total number of foreign issuers for each of the past five years.

Total Number of Foreign Issuers

2014 – 912

2013 – 940

2012 – 946

2011 – 965

2010 – 970

As the above figures highlight, each year for the past five years there have fewer foreign issuers in the U.S.

I am not suggesting a direct casual relationship between this fact and the new era of FCPA enforcement (declared in 2010 and during which several foreign issuers have resolved FCPA enforcement actions). Indeed, a company determining where to list its securities will consider numerous factors not just whether a listing will expose the company to a certain law.

Nevertheless, it is interesting to note (as highlighted in this prior post) that certain foreign companies such as Siemens, Daimler and Magyar Telekom deslisted their U.S. securities after resolving FCPA enforcement actions.

Foreign Issuers Based on Country of Incorporation

The SEC’s data also lists foreign issuers based on the country of incorporation and for each of the past five years Canada, the Cayman Islands, and Israel have been 1, 2 and 3 in terms of the country of incorporation of foreign issuers.

The percentage of foreign issuers from Canada has ranged between 30-35% over the past five years.

The percentage of foreign issuers from the Cayman Islands has ranged between 13-14% over the past five years.

The percentage of foreign issuers from Israel has ranged between between 7-9% over the past five years.

What is interesting about these figures is that despite accounting for between 30-35% of foreign issuers in any given year, there has never been an FCPA enforcement action against an issuer from Canada. That may change in the near future as the following Canadian issuers have all disclosed FCPA scrutiny: Kinross Gold Corp, Nordion, and Brookfield Asset Management.

In terms of the Cayman Islands, the following issuers incorporated there all resolved FCPA enforcement actions in connection with the 2010 CustomsGate enforcement action concerning alleged conduct in Nigeria: Transocean, Noble Corp. and GlobalSantaFe.

In terms of Israel, there has never been an FCPA enforcement action against an issuer from Israel, but this too may change in the near future as Teva Pharmaceuticals has disclosed FCPA scrutiny.