SEC FCPA Enforcement – 2020 Year In Review
Foreign Corrupt Practices Act enforcement, it’s 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 and recently an SEC Commissioner stated that anti-corruption policy is not within the SEC’s area of expertise nor further to the SEC’s mission).
This post goes in-depth into various facts and figures relevant to SEC FCPA enforcement in 2020.
Acting SEC Chair Roisman Has Made Several Notable Recent Statements Relevant To The FCPA
The SEC recently announced that Elad Roisman, an SEC commissioner since 2018, has been designated as Acting Chairman of the SEC.
While Roisman’s tenure is likely to be short (due to the upcoming change in Administrations), it is nevertheless interesting to note that the Acting Chair of the SEC has made some notable recent statements relevant to the Foreign Corrupt Practices Act.
For instance, as highlighted in this prior post Roisman has objected to various aspects of several corporate FCPA enforcement actions.
Acting Deputy Ass’t AG Zink Talks Data, Cooperation, And Coordination
Recently, Acting Deputy Assistant Attorney General Robert Zink delivered this virtual speech in which he talked about: (i) the DOJ’s use of data; and (ii) cooperation and coordination including the DOJ’s so-called “anti-piling” policy.
Zink also stated that “it’s important that the [DOJ Criminal] Division is held accountable by the public for its work—both good and bad.” Duly noted.
Regarding Those “Obey-The-Law” Injunctions ….
Today’s post is from Russ Ryan (King & Spalding).
As readers of this blog well know, SEC settlements in FCPA cases are most often memorialized by settled administrative orders that, among other things, require the respondent to pay monetary sanctions and to cease and desist from committing or causing future violations of the statutes and rules charged. On occasion, however, the SEC instead files a settled FCPA case in federal court, as is its choice. Indeed, when individual FCPA defendants refuse to settle – corporations nearly always settle – the SEC typically sues them in federal court rather than in an administrative proceeding.
When the SEC proceeds in federal court, it invariably demands – in addition to monetary sanctions – that the court issue a time-unlimited “obey-the-law” injunction that forever prohibits the defendant from violating the statutes and rules charged in the complaint. Those who settle invariably agree to these injunctions, and courts generally issue them with little or no independent scrutiny of the evidence (if any) that purports to prove their necessity.
SEC Commissioners Peirce And Roisman Hit Internal Controls Home Run
For years, these pages have highlighted off-the-rails enforcement of the Foreign Corrupt Practices Act’s books and records and internal controls provisions (see here, here, here, here, here, here, here and here among other posts).
Among other things, the prior posts have discussed FCPA legislative history, the FCPA’s statutory text, SEC v. World-Wide Coin Investments (believed to be the only judicial decision to directly address the substance of the books and records and internal controls provisions) and prior FCPA enforcement agency guidance – all in an effort to highlight the difficulty of reconciling existing legal authority and even enforcement agency guidance with certain FCPA books and records and internal controls enforcement theories in recent years.
Last week, SEC Commissioners Hester Peirce and Elad Roisman issued this statement to explain why they voted against the SEC’s recent settled action against Andeavor LLC (see here in which the company agreed to pay $20 million). As highlighted below, Commissioners Peirce and Roisman discussed the same concepts and cited the same authority which have been highlighted on these pages for years and in the process hit an internal controls home run.