The Gap In SEC Individual FCPA Enforcement Actions Is Now 4 Years
One reason to take FCPA enforcement agency rhetoric with a grain of salt is because it is warranted.
For instance, the FCPA enforcement agencies often talk about the importance of x and how they are committed to x, but in reality rarely do x.
Case in point is SEC individual FCPA enforcement actions.
Is The SEC Finished With NPAs And DPAs?
In early 2010, the SEC (see here) announced a series of measures “to further strengthen its enforcement program by encouraging greater cooperation from individuals and companies in the agency’s investigations and enforcement actions.”
The SEC’s then Director of Enforcement called the measures “a potential game-changer for the Division of Enforcement.”
Among the measures the SEC adopted was use of deferred prosecution agreements and non-prosecution agreements – resolution vehicles the SEC described as “tools [that] have been regularly and successfully used by the Justice Department in its criminal investigations and prosecutions” (which of course was and still remains a debatable point).
However, as highlighted below, since this “game-changing” moment at the SEC nearly 15 years ago, the agency has only used a DPA twice to resolve an issuer FCPA enforcement action and an NPA three times. Moreover, the SEC’s last use of an NPA or DPA to resolve an issuer FCPA enforcement was in mid-2016.
Zero Individual FCPA Actions During Grewal’s Tenure
The SEC recently announced that Gurbir Grewal (Director of the Division of Enforcement) will depart the SEC on October 11, 2024.
The SEC release touts various enforcement figures during Grewal’s tenure (which began in July 2021) such as “During Mr. Grewal’s tenure, the Division of Enforcement recommended, and the Commission authorized, more than 2,400 enforcement matters resulting in orders for more than $20 billion in disgorgement, prejudgment interest, and civil penalties, more than 340 industry bars against individuals, more than $1 billion in awards to whistleblowers, and the return of billions of dollars to harmed investors.”
But one meaningful enforcement figure is not mentioned.
Largest SEC Only FCPA Enforcement Actions
So-called “issuers” under the Foreign Corrupt Practices Act (that is generally companies with shares traded on a U.S. exchange or otherwise with reporting obligations to the Securities and Exchange Commission) are subject to both Securities and Exchange Commission and Department of Justice FCPA enforcement.
However, many FCPA enforcement actions against issuers are SEC only and lack a DOJ component. Although FCPA enforcement agencies rarely have to “prove” an FCPA violation against issuers (rather issuers typically resolve an enforcement action through a resolution vehicle not subjected to any meaningful judicial scrutiny), theoretically the DOJ in a criminal action has a much higher burden of proof (beyond a reasonable doubt) compared to the SEC in a civil action (preponderance of the evidence).
Regardless of the reasons for SEC enforcement actions against issuers that lack a DOJ component, set forth below are the 25 largest SEC only FCPA enforcement actions.
The Gap In SEC Individual FCPA Enforcement Actions Is Approaching 4 Years
One reason to take FCPA enforcement agency rhetoric with a grain of salt is because it is warranted.
For instance, the FCPA enforcement agencies often talk about the importance of x and how they are committed to x, but in reality rarely do x.
Case in point is SEC individual FCPA enforcement actions.