A Collection Of Peirce’s Greatest Hits
This site has been a big fan of SEC Commissioner Hester Peirce.
Peirce is soon to leave her position and this prior post titled “Peirce Out” highlighted a speech by the same name she delivered in which criticized various aspects of SEC enforcement – including as to the Foreign Corrupt Practices Act.
This post collects Peirce’s greatest hits.
For starters, throughout her tenure, Peirce has objected (in whole or in part) to the majority of corporate FCPA enforcement actions she has voted on while on the Commission. (See here, here, here, here, and here).
“Peirce Out”
This site has been a big fan of SEC Commissioner Hester Peirce.
She is soon to leave her position and a future post will highlight some of her “greatest hits” as an SEC Commissioner including her frequent criticisms of various aspects of FCPA enforcement.
Recently, Peirce delivered this speech titled “Peirce Out” in which she continued to criticize various aspects of SEC enforcement – including as to the FCPA.
Peirce stated:
A Look Back At World-Wide Coin
SEC v. World-Wide Coin Investments, Ltd., 567 F. Supp. 724 (N.D. Ga. 1983) is one of just a few judicial decisions to substantively interpret the FCPA’s books and records and internal controls provisions.
The key language from World-Wide Coin, in the words of Judge Robert Vining, was as follows.
The definition of accounting controls does comprehend reasonable, but not absolute, assurances that the objectives expressed in it will be accomplished by the system. The concept of “reasonable assurances” contained in [internal control provisions] recognizes that the costs of internal controls should not exceed the benefits expected to be derived. It does not appear that either the SEC or Congress, which adopted the SEC’s recommendations, intended that the statute should require that each affected issuer install a fail-safe accounting control system at all costs. It appears that Congress was fully cognizant of the cost-effective considerations which confront companies as they consider the institution of accounting controls and of the subjective elements which may lead reasonable individuals to arrive at different conclusions. Congress has demanded only that judgment be exercised in applying the standard of reasonableness. […] It is also true that the internal accounting controls provisions contemplate the financial principle of proportionality—what is material to a small company is not necessarily material to a large company.
The remainder of this post summarizes the facts and holding of World-Wide Coin.
Seventh Circuit Orders New Trial In Non-FCPA, FCPA Enforcement Action And Orders That Individuals Be Released From Prison
This site has long followed the criminal prosecution of four former Commonwealth Edison (“ComEd”) executives and associates based on allegations of attempting to influence and rewarding the former Speaker of the Illinois House of Representatives in order to assist with the passage of legislation favorable to the electric utility company.
Bribery of a state politician is not ordinarily the type of conduct that results in Foreign Corrupt Practices Act issues.
However, ComEd (a majority-owned indirect subsidiary of Exelon Corp) was an issuer (as was Exelon) and the FCPA has always been a law much broader than its name suggests because of the FCPA’s books and records and internal controls provisions.
Strip Club Issuer Charged With Bribing Tax Official With Lap Dances (Among Other Things)
RCI Hospitality Holdings Inc. is a publicly traded Texas corporation with shares traded on the NASDAQ exchange. Through its subsidiaries, RCI owns and operates more than 60 strip clubs and restaurants throughout the U.S. including
three located in New York.
As an issuer, RCI is subject to the FCPA including the books and records and internal controls provisions.
The books and records provisions generally require issuers to “make and keep books, records, and accounts, which, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the issuer.”