This recent FCPA Blog post titled “Supreme Court Challenges Shake Foundation of FCPA Enforcement at the SEC” asserts:
“Complaints about the way the SEC brings and resolves nearly all of its enforcement actions, including FCPA violations, have finally come to the surface. First, with a unanimous Supreme Court decision in April that gives defendants an easier path to challenge the constitutionality of the SEC’s in-house court. And second, with a case the Supreme Court put on its docket in May that questions whether the SEC’s in-house court should exist at all.
Because the SEC adjudicates nearly nine out of ten enforcement actions in-house, major changes to the powers of its in-house court could radically reshape the enforcement landscape.”
Quick background: The SEC can enforce the federal securities laws (including the FCPA) either through its in-house court presided over by an administrative law judge or through a civil enforcement action in federal court.”
The FCPA Blog post, like many, demonstrates a poor understanding of the topic addressed.
Sure, nearly all issuer FCPA enforcement actions are resolved through an SEC administrative order in which a cooperating issuer, often without admit or denying the SEC’s findings, resolves the matter. For instance, all five issuer FCPA enforcement actions brought by the SEC thus far in 2023 have been resolved through administrative orders – see here for the most recent action involving Gartner.
However, an SEC administrative order used in FCPA enforcement actions is materially different in form and function that an SEC order instituting administrative proceedings and notice of hearing.
Visually, below is the caption for the recent Gartner matter.
Below is the caption for a recent SEC order instituting administrative proceedings and notice of hearing.
The SEC’s website lists approximately 300 open litigated administrative proceedings and lists approximately 1,900 closed litigated administrative proceedings.
It does not appear that any issuer FCPA enforcement action has been brought before the “SEC’s in-house court” (to use the FCPA Blog’s term).
