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).
SEC Rescinds Long-Standing Settlement Policy
The SEC’s long-standing “neither admit nor deny” settlement policy has been the focus of posts on this site for approximately 15 years.
Yesterday, the SEC rescinded the policy.
The SEC release states:
“The Securities and Exchange Commission today rescinded a policy, codified in Rule 202.5(e) of its informal rules of procedures, stating that when it chooses to settle an enforcement action in which a sanction is imposed, it will not settle unless the defendant or respondent also agrees not to publicly deny the allegations in the complaint or administrative order. Rescinding Rule 202.5(e) aligns the Commission with the overwhelming majority of federal agencies that do not have a similar rule and gives the Commission more flexibility in settling enforcement actions, which conserves resources, provides certainty, and potentially expedites the return of money to injured investors. The recission recognizes that the effect on the public interest from such denials may be minimal and that the policy itself may have created an incorrect impression that the Commission is trying to shield itself from criticism.”
New Director Of The SEC’s Division Of Enforcement Speaks
David Woodcock (the new Director of the SEC’s Division of Enforcement) recently delivered this speech.
Woodcock stated that his goals are “to return the enforcement program back to basics” with an “emphasis on quality over quantity.”
Whether Woodcock’s speech was relevant to the Foreign Corrupt Practices Act (part of the securities laws after all) is your call.
Off the rails FCPA enforcement by the SEC has been highlighted on these pages for years.
“Broken Windows Securities Enforcement”
At a recent conference, SEC Commissioner Mark Uyeda offered remarks on the “effectiveness of the broken windows policy in the securities enforcement context.”
As Uyeda explained, “the broken windows hypothesis, as described in a seminal article published in The Atlantic by James Q. Wilson and George Kelling, posits that visible signs of disorder, when left unaddressed, create an environment that encourages more serious crime.”
Uyeda then commented on a paper titled “Broken Windows Securities Enforcement” and stated:
The SEC And FCPA Enforcement
It has been a while since the last SEC FCPA enforcement action in December 2024.
What is interesting though, is that the SEC never wanted any part in enforcing the FCPA’s anti-bribery provisions.
This post rewinds the clock back to the mid-1970’s when Congress held numerous hearings about the so-called foreign corporate payments problem resulting in the FCPA becoming law in 1977.
As told in the “The Story of the Foreign Corrupt Practices Act,” the SEC played a prominent role during Congress’s multi-year investigation, deliberation, and consideration of the foreign corporate payments problem.
Yet, the SEC’s role was also the most curious as the Commission was a reluctant actor in Congress’s quest for a new and direct legislative remedy to the problem.