I recently saw that Richard Grime has retired. (See here).
As described in his law firm bio: “Prior to joining Gibson Dunn, Mr. Grime spent over nine years in the Division of Enforcement at the Securities and Exchange Commission in Washington, DC. In his last four years at the Commission he was an Assistant Director. While at the SEC, Mr. Grime supervised the filing of over 70 enforcement actions covering a wide range of the Commission’s activities. These included a series of FCPA cases, numerous accounting fraud cases involving retail, technology and financial services companies, regulated entity cases involving broker-dealers, transfer agents and investment advisers, along with multiple insider trading and Ponzi-scheme enforcement actions.”
Unlike many prior FCPA enforcement officials who leave to private practice and then offer bland commentary on FCPA issues, Grime was candid and often sharp in his critiques of DOJ/SEC FCPA enforcement.
For instance, as highlighted in this previous post, Grime (and his co-authors) unleashed on an FCPA enforcement action against Veraz networks and stated that the SEC “complaint discloses little information about the specifics of the alleged misconduct” and “the complaint is remarkably ambiguous about the substance of the alleged violations.”
According to Grime and his co-authors:
“The complaint refers to ‘gifts,’ ‘illicit payments,’ and ‘questionable expenses,’ but provides little useful insight as to the surrounding circumstances or even the value of some of the alleged gifts and payments. Similarly, the complaint does not state how the company recorded the payments or how the records were inaccurate.”
As Grime and his co-authors noted: “given that there are few FCPA court opinions, the SEC should seek through these settled complaints to fully explain the facts underlying its actions and how those facts violate the law.”
Grime and his co-authors also dished up this criticism of the Veraz enforcement action:
“By punishing Veraz for such conduct, the SEC provides little incentive for a company to voluntarily disclose misconduct, cooperate, and thereby seek leniency. It is unstated whether Veraz cooperated with the SEC investigation, but the company did disclose that it spent $3 million on the investigation. For that sum, the company presumably assisted the SEC’s investigation, but no credit (or explanation for a lack of credit) is given. The specter that even small payments will be prosecuted may drive companies to conclude that remediation without the government’s involvement is the wiser approach.”
As highlighted in this previous post, Grime called the FCPA’s facilitating payment exception “illusory” and stated:
“The drafters of the FCPA recognized that such demands for ‘grease payments’ are a reality in many countries, and accordingly made clear that certain payments made to expedite the approval of permits or licenses, or to prompt the expeditious performance of similar low-level ministerial duties, fell outside the ambit of the statute’s anti-bribery provisions. Yet that exception for ‘facilitating payments’ […] is becoming harder and harder to rely on. […] The DOJ and SEC have pressed a narrow view of the exception in recent years … […] Of course, the fact that the FCPA’s twin enforcement agencies have treated certain payments as prohibited despite their possible categorization as facilitating payments does not mean a federal court would agree. But because the vast majority of enforcement actions are resolved through DPAs and NPAs, and other settlement devices, these cases never make it to trial. As a result, the DOJ and the SEC’s narrow interpretation of the facilitating payments exception is making that exception ever more illusory, regardless of whether the federal courts – or Congress – would agree.”
(See Richard Grime and Sara Zdeb, “The Illusory Facilitating Payments Exception: Risks Posed By Ongoing FCPA Enforcement Actions And The U.K. Bribery Act,” (2011).
As highlighted in this prior post, in 2015 Grime commented generally on the ever-expansive theories of FCPA enforcement and stated regarding recent alleged FCPA violations. “It’s not that you couldn’t intellectually [conceive of] the violation. It’s that the government is sort of probing every area where there is an interaction with government officials and then working backwards from there to see if there is a violation, as opposed to starting out with the statute … and what it prohibits.”
In this 2017 FCPA Flash podcast episode, Grime discussed: (i) reasons for the general increase in FCPA enforcement (among the reasons he mentions is “the government has realized this is a money-winner”; (ii) whether FCPA enforcement, including the internal control’s provisions, has been pushed beyond the breaking point (in Grime’s words yes it has and “almost any conduct becomes subject to an enforcement vehicle”); and (iii) whether long, drawn-out FCPA investigations can be avoided.
As highlighted in this 2019 post during another podcast Grime discussed FCPA enforcement and candidly stated: “frankly, if you [the government] bring[s] in a couple billion dollars a year you just keep on going.”
