Recently, I had some back and forth exchanges on LinkedIn with John Reed Stark (a former SEC enforcement attorney) on SEC FCPA enforcement.
An overview of the points I raised are set forth below.
Often when there is a discussion about enforcement of a specific law and comparing enforcement actions to prior years, the question perhaps left unanswered “how much enforcement should there actually be?”
Thus, when it comes to SEC enforcement of the FCPA (“foreign bribery” actions – not necessarily “non-FCPA, FCPA enforcement actions” – a term long used on this site to describe enforcement actions by the SEC involving the FCPAs books and records and internal controls provisions, but not involving foreign bribery, of which there have been several this year including earlier this month), it must be noted that the SEC has rather limited jurisdiction (generally speaking only against issuers).
It must also be noted that the number of “issuers” has significantly declined in recent years. As stated by SEC Chair Paul Atkins stated in an October 2025 speech, “there are approximately 4,700 exchange-listed companies today, compared to a high point of approximately 7,800 in 2007.”
In other words, in recent years, the number of issuers that the SEC could theoretically enforce the FCPA against has declined by approximately 50%.
Another relevant factor when comparing enforcement to prior years is thinking about whether compliance – within the relatively narrow range of companies the SEC has FCPA jurisdiction over – has increased with each passing decade of the FCPA (which is nearing 50 years old).
While this is difficult to measure, I think the answer is yes and that has always been the goal of the FCPA.
For instance, when Congress passed the FCPA it anticipated that the FCPA would “to a significant extent act as a self-enforcing preventative mechanism.”
This of course was an aspirational statement (as many statements from Congress are), but if the FCPA has been successful in accomplishing its objective, as it nears its 50th year, should there be more enforcement or less enforcement over time?
Indeed, in 2015 the SEC’s then Director of Enforcement Andrew Ceresney stated: “The Commission’s enforcement efforts over the last ten years, along with those of our partners at the DOJ and FBI, have resulted in a sea change in enhancing the focus on FCPA compliance issues.”
The exchanges with Stark occurred in the context of his post about the 3rd Annual Judge Stanley Sporkin SEC Enforcement Panel which focused on the FCPA. During his distinguished career, Sporkin was, among other things, the general counsel at the CIA, a federal court judge, and as relevant to the FCPA, the head of SEC enforcement in the mid-1970’s – as Congress set about the multi-year task of enacting the FCPA – and thereafter during the FCPA’s early years. (See here).
Sporkin himself recognized that increased FCPA compliance would likely yield fewer FCPA enforcement actions.
For instance, circa 2006, Sporkin proposed an “FCPA Immunization-Inoculation Program” that he envisioned would serve the dual purpose of: “(1) creating suitable incentives to compliance-minded companies to adopt and maintain high ethical standards in the conduct of their business; and (2) reducing the case load and investigative burden of governmental agencies that enforce the FCPA while reassuring regulators that companies are taking active steps to limit corruption in their foreign contracting and other activities.”
Combining the two issues discussed thus far yields the following.
The number of issuers the SEC could theoretically enforce the FCPA against has significantly declined and in the words of the SEC’s Director of Enforcement approximately ten years ago there has been a “sea change in enhancing the focus on FCPA compliance issues.”
Given these dynamics would one expect more or less FCPA enforcement over time?
It is also relevant to note that much of the largeness of FCPA enforcement over the past 20 years (including by the SEC) has been against foreign companies – typically based on conduct 7-10 years (if not more) prior to the enforcement action.
For instance, 100% of the SEC’s four issuer FCPA enforcement actions in 2021 were against foreign companies and, in all instances, the 2021 enforcement actions concerned core allegations generally around 2010 to 2015.
Again, while this issue is difficult to measure, do we think FCPA (and related) compliance among foreign issuers is better in recent years compared to 10-15 years ago or worse?
If better, would one expect more FCPA enforcement or less?
Given the backward-looking nature of FCPA enforcement, including how many FCPA enforcement actions are actually the result of voluntary disclosures, we must remember something else as we approach 2027.
In early 2020, COVID happened and had an impact on many facets of life for approximately 1.5 years including internal investigations and/or government investigations.
While the answer is unknowable, how many FCPA issues were not investigated and/or disclosed circa March 2020 – 2022 that could theoretically have yielded an SEC FCPA enforcement action?
Regardless of the specific answer, 2026(ish) – 2028(ish) is the time frame in which one would have logically expected those enforcement actions.
In short, when discussing FCPA enforcement over time, one must wrestle with the salient question of “how much enforcement should there actually be” and whether certain factors logically contribute to less enforcement.
Certain segments of the FCPA commentariat seem to want it both ways.
They encourage and champion FCPA compliance (all for good reason) and how it can minimize FCPA risk and violations.
Yet, some still seem to “complain” if enforcement over time may be less because of this (and the other factors discussed above).
It really is a strange dynamic – almost like encouraging and championing automobile safety measures and then complaining if there might be fewer (and less serious) accidents.
