Shallow FCPA Commentary
Certain of what passes for Foreign Corrupt Practices Act commentary is shallow and lacks an appreciation of context and perspective. Another hallmark of shallow FCPA commentary is the logical fallacy post hoc ergo propter hoc (in other words, since event Y followed event X, event Y must have been caused by event X).
Shallow FCPA commentary matters because it spreads misleading information about FCPA enforcement and policy.
The latest shallow commentary was articulated in connection with the recent Credit Suisse enforcement action (see here and here for prior posts).
FCPA Flash Podcast – A Conversation With Bradley Bondi Regarding His Recent FCPA Relevant House Testimony
The FCPA Flash podcast provides in an audio format the same fresh, candid, and informed commentary about the Foreign Corrupt Practices Act and related topics as readers have come to expect from written posts on FCPA Professor.
This FCPA Flash episode is a conversation with Bradley Bondi (Cahill Gordon & Reindel LLP). As highlighted in this recent post, Bondi testified at a House hearing titled “Ensuring Effectiveness, Fairness, and Transparency in Securities Law Enforcement” that touched upon several FCPA relevant issues. In the podcast, Bondi elaborates on certain of these issues including: disgorgement and statute of limitation issues. In addition, based on his comment during the hearing that “few would consider a local police force successful in deterring crime if it announced record numbers of arrests year after year,” Bondi opines whether the FCPA is being successful in accomplishing its objectives.
The SEC’s Shrinking FCPA Jurisdiction
As stated in the DOJ/SEC issued FCPA Guidance: “SEC is responsible for civil enforcement of the FCPA over issuers and their officers, directors, employees, agents, or stockholders acting on the issuer’s behalf.”
The Guidance then states: “[A] company is an ‘issuer’ under the FCPA if it has a class of securities registered under Section 12 of the Exchange Act or is required to file periodic and other reports with SEC under Section 15(d) of the Exchange Act. In practice, this means that any company with a class of securities listed on a national securities exchange in the United States, or any company with a class of securities quoted in the over-the-counter market in the United States and required to file periodic reports with SEC, is an issuer.”
As highlighted in this post, currently there are substantially fewer issuers subject to SEC FCPA jurisdiction compared to prior decades.
SEC Potpourri
A suggestion for the SEC and excerpts from a recent speech by Steven Peikin (Co-Director, Division of Enforcement) on effective communication with the SEC.
Suggestion for the SEC
As highlighted here, the SEC recently launched SEC Action Lookup for Individuals (SALI) “that enables investors to research whether the person trying to sell them investments has a judgment or order entered against them in an enforcement action. The new tool is intended to assist the public in making informed investment decisions and avoiding financial fraud.”
A Dandy, FCPA Relevant Speech By SEC Commissioner Peirce
Recently, SEC Commissioner Hester Peirce delivered this speech. Peirce never mentioned the Foreign Corrupt Practices Act, but so much of the speech is FCPA relevant.
Indeed, Peirce touches upon topics discussed for years on FCPA Professor such as: the seeming emphasis by government of quantity of enforcement over quality of enforcement; the timing of SEC enforcement actions at the end of a fiscal year as a form of “earnings management;” how the SEC should use other avenues short of enforcement actions to address new and emerging issues (I’ve long believed that the SEC should have used a Section 21(a) Report of Investigation, rather than enforcement actions, to address internship and hiring practice issues); the importance of due process in enforcement; how enforcement agencies should not expand the law through enforcement just because they can; and how issuers and others subject to SEC enforcement settle for simple reasons of risk aversion.