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A Focus On SEC Individual Actions


This previous post highlighted various facts and figures from 2021 SEC FCPA enforcement actions against issuers.

This post focuses on SEC FCPA individual actions – both in 2021 and historically.

Like the DOJ, the SEC frequently speaks in lofty rhetoric concerning its focus on holding individuals accountable under the FCPA.

As highlighted here, in 2021 the SEC’s Chairman stated: “Accountability — whether individual or institutional — is an important part of the SEC’s enforcement agenda. We’ll use all of the tools in our toolkit to investigate wrongdoing and hold bad actors accountable …”.

As highlighted here, in 2020 the SEC’s Co-Director of Enforcement stated: “[A] critical part of our program continues to be seeking to deter wrongdoing by holding individuals accountable

As highlighted here, in 2018 the SEC’s Co-Director of Enforcement stated:

“We have also continued to focus on individual accountability by pursuing charges against individuals for misconduct in the securities markets, including registered individuals, executives at all levels of the corporate hierarchy, including CEOs, CFOs and other high-ranking executives, and gatekeepers.”

As highlighted here, in 2017 the SEC’s Co-Director of Enforcement stated:

“Of course, companies cannot engage in bribery without the actions of culpable individuals. The Enforcement Division is broadly committed to holding individuals accountable when the facts and the law support doing so. […] Individual accountability drives behavior more than corporate accountability, a point which is supported by both logic and experience. The Division of Enforcement considers individual liability in every case it investigates; it is a core principle of our enforcement program.”

Likewise, in 2016 the SEC’s Director of Enforcement stated that “pursuing individual accountability [in FCPA enforcement actions] is a critical part of deterrence.” Likewise, in 2015 the SEC’s Director of Enforcement stated:

“Holding individuals accountable for their wrongdoing is critical to effective deterrence and, therefore, the Division considers individual liability in every case. […] The Commission is committed to holding individuals accountable and I expect you will continue to see more FCPA cases against individuals.”

Likewise, in 2014 the SEC’s Director of Enforcement stated:

“I always have said that actions against individuals have the largest deterrent impact. Individual accountability is a powerful deterrent because people pay attention and alter their conduct when they personally face potential punishment. And so in the FCPA arena as well as all other areas of our enforcement efforts, we are very focused on attempting to bring cases against individuals.  […] [I]ndividual accountability is critical to FCPA enforcement — and imposing personal consequences on bad actors, including through bars and monetary sanctions, will continue to be a high priority for us.”

SEC rhetoric aside, what do the numbers actually show?

In 2021, the SEC did not bring an FCPA enforcement action against any individual. As highlighted in this prior post, the current time gap between individual SEC FCPA enforcement actions has been approximately 15 months – the longest in nearly a decade.

Since 2000, the SEC has charged or found that 86 individuals violated the FCPA.  The breakdown is as follows.

  • 2000 – 0 individuals
  • 2001 – 3 individuals
  • 2002 – 3 individuals
  • 2003 – 4 individuals
  • 2004 – 0 individuals
  • 2005 – 1 individual
  • 2006 – 8 individuals
  • 2007 – 7 individuals
  • 2008 – 5 individuals
  • 2009 – 5 individuals
  • 2010 – 7 individuals
  • 2011 – 12 individuals
  • 2012 – 4 individuals
  • 2013 – 0 individuals
  • 2014 – 2 individuals
  • 2015 –  2 individuals
  • 2016 – 8 individuals
  • 2017 – 3 individuals
  • 2018 – 3 individuals
  • 2019 – 6 individuals
  • 2020 – 3 individuals
  • 2021 – 0 individuals

Of the 75 individuals charged with civil FCPA offenses by the SEC since 2006:

  • 7 individuals were in the Siemens case;
  • 4 individuals were in the ABB case;
  • 4 individuals were in the Willbros Group case;
  • 4 individuals were in the Alliance One case;
  • 4 individuals were in the Och-Ziff case;
  • 3 individuals were in the Maygar Telekom case; and
  • 3 individuals were in the Noble Corp. case.
  • 3 individuals were in the Cognizant Technologies case.

In other words, approximately 45% of the individuals charged by the SEC with FCPA civil offenses since 2006 have been in just 8 core actions.

Considering that there has been 168 corporate SEC FCPA enforcement actions since 2006, this is a rather remarkable statistic.  Of the 168 corporate SEC FCPA enforcement actions, 135 (approximately 80%) have not resulted in any related SEC charges against company employees.

This is an interesting figure given that between 1977 and 2004, 61% of SEC corporate FCPA enforcement actions did indeed result in related charges against company employees.

In other words, for most of the FCPA’s history the majority of corporate SEC FCPA enforcement resulted in related individual accountability, but in the SEC’s modern FCPA enforcement program, the vast majority of corporate SEC FCPA enforcement actions have not resulted in related individual accountability despite the SEC’s rhetoric.

It is also interesting to analyze the 33 instances since 2006 where an SEC corporate FCPA enforcement action resulted in related charges against company employees.   With the exception of Baker Hughes, Siemens, KBR/Halliburton, Magyar Telekom, Och-Ziff, General Cable, Panasonic, Goldman and Herbalife the corporate SEC FCPA enforcement actions resulting in related charges against company employees occurred in what can only be described as relatively minor (at least from a settlement amount perspective) corporate enforcement actions.

These actions are:  Schnitzer Steel, Immucor, Electronic Data Systems, Faro Technologies, Willbros Group, Nature’s Sunshine Products, United Industrial Corp., Pride Int’l., Noble Corp., Alliance One, Innospec, Watts Water, PBSJ and FLIR Systems, SAP, PTC, Nordion, Analogic, and LAN Airlines, Halliburton, SQM, Cognizant and Westport Fuel.

Set forth below is a complete list of SEC corporate FCPA enforcement actions since 2006 and whether the corporate enforcement action resulted in any related individual charges. Beginning in October 2014, I publicly invited the SEC to refute these numbers and support its individual accountability rhetoric after the SEC’s then FCPA Unit chief publicly stated that my numbers were false, wrong, deeply flawed, etc. (see here). The SEC has not responded and the invitation still stands.

2006 Schnitzer Steel Yes
2006 Statoil No
2006 Oil States Int’l No
2006 Tyco No
2007 Lucent Tech. No
2007 Akzo Nobel No
2007 Chevron No
2007 Ingersoll-Rand No
2007 York No
2007 Immucor Yes
2007 Bristow Group No
2007 Electronic Data Systems Yes
2007 Textron No
2007 Delta & Pine No
2007 Baker Hughes Yes
2007 Dow Chemical No
2007 El Paso No
2008 Fiat No
2008 Siemens Yes
2008 Con-Way No
2008 Faro Yes
2008 Willbros Yes
2008 AB Volvo No
2008 Flowserve No
2008 Westinghouse Air Brake No
2009 UTStarcom No
2009 AGCO No
2009 Nature’s Sunshine Yes
2009 Helmerich & Payne No
2009 Avery Dennison No
2009 United Industrial Corp. Yes
2009 Novo Nordisk No
2009 ITT Corp. No
2009 KBR/Halliburton Yes
2010 Alcate-Lucent No
2010 RAE Systems No
2010 Panalpina No
2010 Pride Int’l Yes
2010 Tidewater No
2010 Transocean No
2010 GlobalSantaFe No
2010 Noble Corp. Yes
2010 Royal Dutch Shell No
2010 ABB No
2010 Alliance One Yes
2010 Universal No
2010 GE/Ionics No
2010 Eni/Snamprogetti No
2010 Veraz Networks No
2010 Technip No
2010 Daimler No
2010 Innospec Yes
2010 Natco No
2011 Magyar Telekom Yes
2011 Aon No
2011 Watts Water Yes
2011 Diageo No
2011 Armor Holdings No
2011 Tenaris No
2011 Rockwell No
2011 Johnson & Johnson No
2011 Comverse No
2011 Ball Corp. No
2011 IBM No
2011 Tyson No
2011 Maxwell Tech. No
2012 Eli Lilly No
2012 Allianz No
2012 Tyco No
2012 Oracle No
2012 Pfizer No
2012 Orthofix No
2012 Biomet No
2012 Smith & Nephew No
2013 Philips No
2013 Parker Drilling No
2013 Ralph Lauren No
2013 Total No
2013 Diebold No
2013 Stryker No
2013 Weatherford Int’l No
2013 ADM No
2014 Alcoa No
2014 HP No
2014 Smith & Wesson No
2014 Layne Christensen No
2014 Bio-Rad No
2014 Bruker No
2014 Avon No
2015 PBSJ Yes
2015 Goodyear No
2015 FLIR Sytems Yes
2015 BHP Billiton No
2015 Mead Johnson No
2015 BNY Mellon No
2015 Hitachi No
2015 Hyperdynamics No
2015 Bristol-Myers Squibb No
2016 SAP Yes
2016 SciClone No
2016 PTC Yes
2016 VimpelCom No
2016 Qualcomm No
2016 Nordion Yes
2016 Novartis No
2016 Las Vegas Sands No
2016 Nortek No
2016 Akamai Technologies No
2016 Analogic Yes
2016 LAN Airlines Yes
2016 Johnson Controls No
2016 AstraZeneca No
2016 Key Energy No
2016 Nu Skin No
2016 AbInBev No
2016 Och-Ziff Yes
2016 GlaxoSmithKline No
2016 Embraer No
2016 JPMorgan No
2016 Braskem No
2016 Teva Pharma No
2016 General Cable Yes
2017 Mondelez Int’l No
2017 Zimmer Biomet No
2017 SQM Yes
2017 Orthofix Int’l No
2017 Halliburton Yes
2017 Telia No
2017 Alere No
2018 Elbit Imaging No
2018 Kinross Gold No
2018 Dun & Bradstreet No
2018 Panasonic Yes
2018 Legg Mason No
2018 Beam No
2018 Credit Suisse No
2018 Sanofi No
2018 United Technologies No
2018 Petrobras No
2018 Stryker No
2018 Vantage Drilling No
2018 Eletrobras No
2018 Polycom No
2019 Cognizant Yes
2019 MTS No
2019 Fresenius No
2019 Telefonica Brasil No
2019 Walmart No
2019 TechnipFMC No
2019 Microsoft No
2019 Deutsche Bank No
2019 Juniper Networks No
2019 Quad Graphics No
2019 Barclays No
2019 Westport Fuel Systems Yes
2019 Ericsson No
2020 Cardinal Health No
2020 Eni No
2020 Novartis No
2020 Alexion No
2020 World Acceptance No
2020 Herbalife Yes
2020 J&F Yes
2020 Goldman Yes
2021 Deutsche Bank No
2021 Amec Foster Wheeler No
2021 WPP No
2021 Credit Suisse No

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