Foreign Corrupt Practices Act enforcement, it’s not just about the DOJ.
Granted, as a civil enforcement agency the SEC’s sticks are less sharp than the DOJ’s, but the SEC also claims a significant piece of the FCPA enforcement pie (query whether it should – but that is a subject for another day – for instance as discussed in “The Story of the Foreign Corrupt Practices Act” the SEC wanted no part in enforcing the FCPA’s anti-bribery provisions and in recent years an SEC Commissioner stated that anti-corruption policy is not within the SEC’s area of expertise nor further to the SEC’s mission – see here).
This post goes in-depth into various facts and figures relevant to SEC FCPA enforcement in 2023.
[See here for a similar post for 2022; here for a similar post for 2021; here for a similar post for 2020; here for a similar post for 2019; here for a similar post for 2018; here for a similar post for 2017; here for a similar post for 2016; here for a similar post for 2015; here for a similar post for 2014; here for a similar post for 2013; here for a similar post for 2012; here for a similar post for 2011; and here for a similar post for 2010].
Settlement Amounts and Specifics
In 2023, the SEC brought 9 corporate enforcement actions and collected approximately $268 million in those enforcement actions (Note: this figure – as well as certain historical figures below – represent net FCPA settlement amounts after accounting for various credits or deductions in certain enforcement actions for related law enforcement actions).
By way of comparison:
- in 2022 the SEC collected approximately $272 million in 7 corporate enforcement actions
- in 2021 the SEC collected approximately $171 million in 4 corporate enforcement actions;
- in 2020 the SEC collected approximately $683 million in 8 corporate enforcement actions;
- in 2019 the SEC collected approximately $1.03 billion in 13 corporate enforcement actions;
- in 2018 the SEC collected approximately $382 million in 14 corporate FCPA enforcement actions;
- in 2017 the SEC collected approximately $289 million in 7 corporate FCPA enforcement actions;
- in 2016 the SEC collected approximately $1.07 billion in 24 corporate FCPA enforcement actions;
- in 2015 the SEC collected approximately $114.8 million in 9 corporate FCPA enforcement actions;
- in 2014 the SEC collected approximately $327 million in 7 corporate FCPA enforcement actions;
- in 2013 the SEC collected approximately $300 million in 8 corporate enforcement actions;
- in 2012 the SEC collected approximately $118 million in 8 corporate FCPA enforcement actions;
- in 2011 the SEC collected approximately $148 million in 13 corporate FCPA enforcement actions;
- in 2010 the SEC collected approximately $530 million in 19 corporate FCPA enforcement actions.
The range of SEC FCPA enforcement actions in 2023 was on the high end $103.6 million (Albemarle) and on the low end $2.5 million (Gartner).
Of the 9 corporate enforcement actions brought by the SEC in 2023, 7 (78%) were SEC only from an FCPA enforcement standpoint.
By way of comparison, of the 7 corporate actions brought by the SEC in 2022, 3 (43%) were SEC only; of the 4 corporate enforcement actions brought by the SEC in 2021, 2 (50%) were SEC only; of the 8 corporate enforcement actions brought by the SEC in 2020, 4 (50%) were SEC only; of the 13 corporate enforcement actions brought by the SEC in 2019, 6 (46%) were SEC only; of the 14 corporate enforcement actions brought by the SEC in 2018, 9 (64%) were SEC only; of the 7 corporate enforcement actions brought by the SEC in 2017, 4 (58%) were SEC only and of the 24 corporate enforcement actions brought by the SEC in 2016, 14 (58%) were SEC only.
Of the 9 corporate enforcement actions brought by the SEC in 2023, 9 (100%) were administrative actions. In other words, there was no judicial scrutiny of SEC corporate FCPA enforcement actions in 2023. By way of comparison:
- 100% of SEC corporate FCPA enforcement actions in 2022 were administrative actions;
- 100% of SEC corporate FCPA enforcement actions in 2021 were administrative actions;
- 100% of SEC corporate FCPA enforcement actions in 2020 were administrative actions;
- 92% of SEC corporate FCPA enforcement actions in 2019 were administrative actions;
- 100% of SEC corporate FCPA enforcement actions in 2018 were administrative actions;
- 100% of SEC corporate FCPA enforcement actions in 2017 were administrative actions;
- 83% of SEC corporate FCPA enforcement actions in 2016 were administrative actions;
- 89% of SEC corporate FCPA enforcement actions in 2015 were administrative actions;
- 86% of SEC corporate FCPA enforcement actions in 2014 were administrative actions;
- 50% of SEC corporate FCPA enforcement actions in 2013 were administrative actions .
In 2023, the SEC collected approximately $51.7 million in disgorgement and prejudgment interest in enforcement actions that did not charge or find anti-bribery violations. This is noteworthy because many question, and rightfully so, whether disgorgement is an appropriate remedy in cases that do not charge FCPA anti-bribery violations. See here for a prior post on so-called “no-charged bribery disgorgement” cases.
By way of comparison:
- in 2022 the SEC collected approximately $2.8 million in disgorgement and prejudgment interest in n0-charged bribery disgorgement cases;
- in 2021 the SEC collected approximately $142 million in disgorgement and prejudgment interest in no-charged bribery disgorgement cases;
- in 2020 the SEC collected approximately $256 million in disgorgement and prejudgment interest in no-charged bribery disgorgement cases;
- in 2019 the SEC collected approximately $183 million in disgorgement and prejudgment interest in no-charged bribery disgorgement cases;
- in 2018 the SEC collected approximately $171 million in disgorgement and prejudgment interest in no-charged bribery disgorgement cases;
- in 2017 the SEC collected approximately $2 million in disgorgement and prejudgment interest in no-charged bribery disgorgement cases;
- in 2016 the SEC collected approximately $73 million in disgorgement and prejudgment interest in no-charged bribery disgorgement cases;
- in 2015 the SEC collected approximately $45 million in disgorgement and prejudgment interest in no-charged bribery disgorgement cases;
- in 2014 the SEC collected approximately $104 million in disgorgement and prejudgment interest in no-charged bribery disgorgement cases;
- in 2013, the SEC collected approximately $208 million in disgorgement and prejudgment interest in no-charged bribery disgorgement cases;
- in 2012, the SEC collected approximately $57.4 million in disgorgement and prejudgment interest in no-charged bribery disgorgement cases; and
- in 2011 the SEC collected approximately $51 million in disgorgement and prejudgment interest in n0-charged bribery disgorgement cases.
The $268 million the SEC collected in 2023 corporate enforcement actions breaks down as follows:
- approximately $223 million in disgorgement and prejudgment interest; and
- approximately in $45 million in civil penalties
In other words, approximately 83% of SEC corporate FCPA settlement amounts in 2023 consisted of disgorgement and prejudgment interest.
By way of comparison:
- in 2022, 56% of SEC corporate FCPA settlements consisted of disgorgement and prejudgment interest;
- in 2021, 57% of SEC corporate FCPA settlements consisted of disgorgement and prejudgment interest;
- in 2020, 40% of SEC corporate FCPA settlements consisted of disgorgement and prejudgment interest;
- in 2019, 88% of SEC corporate FCPA settlements consisted of disgorgement and prejudgment interest;
- in 2018, 92% of SEC corporate FCPA settlements consisted of disgorgement and prejudgment interest;
- in 2017, 82% of SEC corporate FCPA settlements consisted of disgorgement and prejudgment interest;
- in 2016 96% of SEC FCPA settlements consisted of disgorgement and prejudgment interest;
- in 2015 51% of SEC FCPA settlements consisted of disgorgement and prejudgment interest;
- in 2014 99% of SEC FCPA settlement amounts in 2014 consisted of disgorgement and prejudgment interest;
- in 2013 98% of SEC FCPA settlement amounts consisted of disgorgement and prejudgment interest;
- in 2012 86% of SEC FCPA settlement amounts consisted of disgorgement and prejudgment interest;
- in 2011, 94% of SEC FCPA settlement amounts consisted of disgorgement and prejudgment interest; and
- in 2010, 96% of SEC FCPA settlement amounts consisted of disgorgement and prejudgment interest.
Corporate vs. Individual Actions
Of the 9 SEC FCPA enforcement actions in 2023, 0 (0%) have involved, at present, related SEC FCPA charges or findings against company employees. Stated differently, 100% of SEC corporate FCPA enforcement actions in 2023 lacked any related SEC charges or findings against company employees.
By way of comparison:
- of the 7 corporate SEC FCPA enforcement actions from 2022, 0 (0%) involved related SEC charges or findings against company employees;
- of the 4 corporate SEC FCPA enforcement actions from 2021, 0 (0%) involved related SEC charges or findings against company employees;
- of the 8 corporate SEC FCPA enforcement actions from 2020, 3 (38%) involved related SEC charges or findings against company employees;
- of the 13 corporate SEC FCPA enforcement actions from 2019, 2 (15%) involved related SEC charges or findings against company
- of the 14 corporate SEC FCPA enforcement actions from 2018, 1 (7%) involved related SEC charges or findings against company employees;
- of the 7 corporate SEC FCPA enforcement actions from 2017, 1 (14%) involved related SEC charges or findings against company employees;
- of the 24 corporate SEC FCPA enforcement actions from 2016, 7 (29%) involved related SEC charges or findings against company employees;
- in 2015 of the 9 corporate SEC FCPA enforcement actions 2 (22%) involved related SEC charges or findings against company employees;
- in 2014 of the 7 corporate SEC FCPA enforcement actions, 0 (0%) involved related SEC charges or findings against company employees;
- in 2013 of the 8 SEC corporate FCPA enforcement actions 0 (0%) involved related SEC charges or findings against company employees;
- in 2012, of the 8 SEC corporate FCPA enforcement actions 0 (0%) involved related SEC charges or findings against company employees;
- in 2011, of the 13 SEC corporate FCPA enforcement actions 2 (15%) involved related SEC charges or findings against company employees; and
- in 2010, of the 19 SEC corporate FCPA enforcement actions 3 (15%) involved related SEC charges or findings against company employees.
Voluntary Disclosures
Of the 9 SEC corporate FCPA enforcement actions from 2022, 6 (67%) appear to be the result of a voluntary disclosure.
By way of comparison:
- of the 7 corporate SEC FCPA enforcement actions from 2022, 3 (43%) were the result of voluntary disclosure;
- of the 4 corporate SEC FCPA enforcement actions from 2021, 0 (0%) were the result of voluntary disclosure;
- of the 8 corporate SEC FCPA enforcement actions from 2020, 3 (38%) were the result of voluntary disclosure;
- of the 13 corporate SEC FCPA enforcement actions from 2019, 6 (46%) were the result of voluntary disclosure;
- of the 14 corporate SEC FCPA enforcement actions from 2018, 6 (43%) were the result of voluntary disclosure;
- of the 7 corporate SEC FCPA enforcement actions from 2017, 1 (14%) was the result of voluntary disclosure;
- of the 24 corporate SEC FCPA enforcement actions from 2016, 8 (33%) were the result of voluntary disclosure;
- of the 9 corporate SEC FCPA enforcement actions from 2015, 3 (33%) were the result of voluntary disclosure;
- of the 7 corporate SEC FCPA enforcement actions from 2014, 4 (57%) were the result of voluntary disclosure;
- of the 8 corporate SEC FCPA enforcement actions in 2013, 3 (38%) were the result of voluntary disclosure;
- of the 8 corporate SEC FCPA enforcement actions in 2012 4 (50%) were the result of voluntary disclosure;
- of the 13 corporate SEC FCPA enforcement actions in 2011 11 (85%) were the result of voluntary disclosure.
This remainder of this post provides an overview of SEC FCPA enforcement in 2023.
Rio Tinto (March 6)
See here and here for prior posts.
Charges: None (administrative order findings violations of the FCPA’s books and records and internal controls provisions)
Settlement: $15 million civil penalty.
Origin: Rio Tinto previously disclosed: “On 29 August 2016, Rio Tinto became aware of email correspondence from 2011 relating to contractual payments totalling US$10.5 million made to a consultant providing advisory services on the Simandou project in Guinea. The company launched an investigation into the matter led by external counsel. Based on the investigation to date, Rio Tinto has today notified the relevant authorities in the United Kingdom and United States and is in the process of contacting the Australian authorities.
Individuals Charged: No
Related DOJ Enforcement Action: No
Flutter International (March 6)
See here and here for prior posts.
Charges: None (administrative order findings violations of the FCPA’s books and records and internal controls provisions)
Settlement: $4 million civil penalty.
Origin: The company previously disclosed: “By at least 2016, the Company’s Board undertook a review of whether the Company, any of its subsidiaries, or any of its personnel had made improper payments, directly or through external consultants, to government officials in certain foreign jurisdictions. As a result of this review, the Company voluntarily contacted the Commission and other U.S. and Canadian regulators …”.
Individuals Charged: No
Related DOJ Enforcement Action: No
Frank’s International (April 26)
See here and here for prior posts.
Charges: None (administrative order findings violations of the FCPA’s anti-bribery, books and records, and internal controls provisions)
Settlement: Approximately $8 million (disgorgement of $4,176,858 and prejudgment interest of $821,863 and a civil money penalty in the amount of $3,000,000).
Origin: The company previously disclosed: “The Company is conducting an internal investigation of the operations of certain of its foreign subsidiaries in West Africa including possible violations of the U.S. Foreign Corrupt Practices Act, the Company’s policies and other applicable laws. In June 2016, the Company voluntarily disclosed the existence of its extensive internal review to the U.S. Securities and Exchange Commission and the United States Department of Justice.”
Individuals Charged: No
Related DOJ Enforcement Action: No
Philips (May 11)
See here and here for prior posts.
Charges: None (administrative order findings violations of the FCPA’s books and records and internal controls provisions)
Settlement: Approximately $62.2 million (disgorgement of $41,126,170, prejudgment interest of $6,047,633, and a civil monetary penalty of $15,000,000).
Origin: Unclear from the resolution document. In 2019, media reports stated: ““The U.S. Securities and Exchange Commission is investigating Siemens AG, Philips NV and General Electric Co for allegedly using local middlemen to negotiate bribes with Chinese government and hospital officials to sell medical equipment. The investigations into the companies’ business in China, along with an existing SEC probe into their sales in Brazil, are part of a new effort by U.S. regulators to crack down on alleged corruption in sales of costly medical equipment worldwide […] Siemens, GE and Philips all denied wrongdoing and said they were unaware of any SEC investigation concerning their operations in China.”
Individuals Charged: No
Related DOJ Enforcement Action: No
Gartner (May 26)
See here and here for the prior posts.
Charges: None (administrative order findings violations of the FCPA’s anti-bribery, books and records. and internal controls provisions)
Settlement: Approximately $2.5 million ($856,764 in disgorgement and prejudgment interest and a $1.6 million civil penalty).
Origin: The company previously disclosed: “During the second half of 2018 we fully cooperated with a South African government commission established to review a wide range of issues related to the country’s revenue service, including the procurement and fulfillment of consulting agreements we entered into with the revenue service through a sales agent from late 2014 through early 2017. In parallel, we commenced an internal investigation regarding this matter. We voluntarily disclosed the matter to the SEC and Department of Justice (DOJ) in November 2018.” The SEC’s order stated: “In determining to accept the Offer, the Commission considered Gartner’s self disclosure following press reports in South Africa …”.
Individuals Charged: No
Related DOJ Enforcement Action: No
Corficolombiana / Grupo Aval (August 10)
See here and here for prior posts.
Charges: None (administrative order finds that Corficolombiana violated the FCPA’s anti-bribery provisions and that Grupo Aval violated the books and records provisions and that Corficolombiana caused the violations. The order also finds that Grupo Aval violated the internal controls provisions and that Corficolombiana caused the violations).
Settlement: $40.3 million (disgorgement of $32,139,731 and prejudgment interest of $8,129,558).
Origin: Foreign law enforcement investigation.
Individuals Charged: No
Related DOJ Enforcement Action: Yes
3M (August 10)
See here and here for prior posts.
Charges: None (administrative order finds that 3M violated the FCPA’s books and records and internal controls provisions).
Settlement: $6.5 million ($3.5 million in disgorgement, $1 million in prejudgment interest, and a $2 million civil penalty).
Origin: Voluntary disclosure.
Individuals Charged: No
Related DOJ Enforcement Action: No
Clear Channel Outdoor (September 28)
See here for the prior post.
Charges: None (administrative order finds that Clear Channel violated the FCPA’s anti-bribery, books and records, and internal controls provisions).
Settlement: $26.1 million (disgorgement of $16,355,567, prejudgment interest of $3,760,920, and a civil monetary penalty in the amount of $6,000,000).
Origin: Foreign law enforcement investigation.
Individuals Charged: No
Related DOJ Enforcement Action: No
Albemarle (September 29)
See here for the prior post.
Charges: None (administrative order finds that Albemarle violated the FCPA’s anti-bribery, books and records and internal controls provisions).
Settlement: $103.6 million ($81.8 million in disgorgement and prejudgment interest of $21.8 million).
Origin: Voluntary disclosure.
Individuals Charged: No
Related DOJ Enforcement Action: Yes
