Recently, SEC Chair Gary Gensler delivered this speech.
Citing President Franklin Delano Roosevelt who stated upon signing the first of the federal securities laws, “this law and its effective administration are steps in a program to restore some old-fashioned standards of rectitude,” Gensler discussed “effective administration” of SEC enforcement including accountability and process.
Regarding accountability, Gensler stated:
“We use many tools to hold violators accountable—including bars and suspensions, penalties and disgorgements, injunctions and cease-and-desist orders, undertakings, admissions, criminal referrals, and allegations or findings of fact. When it comes to accountability, the details matter.”
Gensler is correct that the details matter.
Granted, the Foreign Corrupt Practices Act is just one portion of the Securities Exchange Act, but an important portion of SEC enforcement as the SEC’s FCPA Unit is just one of a small handful of specialized units at the SEC.
As highlighted in this recent post, the current gap in SEC individual FCPA enforcement actions now exceeds two years. During this time frame, the SEC has resolved nine corporate SEC FCPA enforcement actions. However none of them have involved related actions against individuals.
Remember details matter.
Gensler next talked about process and stated:
“Process is about fairness: to the market, to the public, to those who are investigated, and to those who are wronged. Process is about timeliness. I think we should work thoughtfully and expeditiously to bring matters to resolution.”
Here again, details matter. Set forth below are details regarding issuer FCPA enforcement actions over the past two years in which it can be reasonably ascertained how long the company was under FCPA scrutiny.
- Gol Airlines – 6 years.
- Tenaris – 5.5 years.
- Stericyle – 5 years.
- Credit Suisse – 4.5 years.
- Amec Foster Wheeler – 4 years.
- Deutsche Bank – 3 years.
Just remember though, “process is about timeliness” and the SEC “should work thoughtfully and expeditiously to bring matters to resolution.”
