Top 20 SEC Disgorgement Amounts
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.
Since then, the SEC has secured approximately $5.1 billion in disgorgement (and associated pre-judgment interest) in approximately 150 corporate enforcement actions. Set forth below is the current top 20 list of SEC disgorgement amounts.
The Percentage Of SEC FCPA Enforcement Actions That Also Involve A DOJ Component
The only category of actor that both the DOJ and SEC can bring a Foreign Corrupt Practices Act enforcement action against are “issuers” (the 78dd-1 portion of the FCPA).
The other two categories of actors covered by the FCPA, “domestic concerns” (78dd-2) and “persons other than issuers or domestic concerns” (78dd-3) are only subject to DOJ FCPA enforcement actions.
This post analyzes the percentage of SEC FCPA enforcement that also involve a DOJ component.
Before highlighting the yearly and aggregate statistics, it is not surprising that the DOJ does not join every issuer FCPA enforcement action brought by the SEC. Even though the DOJ and SEC are almost never put in a position to prove an FCPA violation against an issuer, theoretically the DOJ’s burden of proof is a very high beyond a reasonable doubt whereas the SEC’s civil burden of proof is merely a preponderance of the evidence.
The Largest FCPA Enforcement Actions Involving Healthcare Related Companies
In large part due to the expansive FCPA enforcement theory that physicians, lab personnel and others associated with most foreign healthcare systems are “foreign officials” under the FCPA (first brought to the FCPA context in 2002 – see here for the prior post), healthcare related companies have resolved numerous FCPA enforcement actions.
This post highlights the twenty largest FCPA enforcement actions (as measured by settlement amount) involving healthcare related companies (broadly speaking pharmaceutical, medical device, life sciences, and diagnostic companies as well as those selling health related products).
As indicated by the below list, the top three enforcement actions involve foreign companies.
The Largest Civil Monetary Penalties In Corporate FCPA Enforcement Actions
Disgorgement and prejudgment interest comprise the bulk of SEC recovery in corporate FCPA enforcement actions (typically 90% or so of overall recovery in most years).
However, in approximately 40% of corporate FCPA enforcement actions since 2010 the SEC has assessed a civil monetary penalty.
It is often a mystery (or at least not reasonably transparent) why most corporate FCPA enforcement actions by the SEC do not include a civil penalty, but some do.
In addition, it is often a mystery (or at least not reasonably transparent) how the civil penalties are actually calculated.
FCPA Blogs Makes Four False Statements In One Post
As has been highlighted more than once on this website, the FCPA Blog is a frequent source of FCPA misinformation and rubbish.
In this post, the FCPA Blog makes four false statements in one post.
The FCPA Blog asserts:
“From 2016 through 2020, 83 companies paid about $16.8 billion to resolve FCPA enforcement actions.”
This is false.