This recent article contains a few interesting quotes from SEC FCPA Unit Chief Charles Cain.
The article states: “The SEC’s enforcement division offers benefits to companies that self-report potential misconduct – usually in the form of reduced penalties and more lenient settlement conditions. Still, companies have no obligation to disclose potential violations, said Charles Cain, who leads the agency’s FCPA unit. “From my perspective, a company never has to come in and there are plenty of situations where learning about something, correcting it and moving on would be the right choice,” Cain told lawyers at a 4 November conference outside Washington, DC.”
Cain’s statement is spot-on (and consistent with voluntary disclosure observations often shared on this website) but hearing it from the head of the SEC’s FCPA Unit Chief is notable.
The article also notes:
“If a whistleblower reports corporate misconduct to the SEC after flagging it internally, investigators may ask a company about the allegations, but that doesn’t necessarily mean prosecution will follow, Cain said. “The company may say: ‘Oh we heard about this and this is what we did’,” he said. “I gotta tell you, we do essentially decline those things all the time.”
Cain’s statement and use of the “d” word (“decline”) once again raises the issue of what is the proper meaning of “declination.” (See prior posts here, here, and here among others).
As previously observed, to use the term “declination” anytime a company is under FCPA scrutiny (perhaps because of something as simple as a media report, a business competitor’s complaint, or a whistleblower report), but there is no enforcement action is like saying the police “declined” to charge a sober driver with drunk driving when passing through a field sobriety checkpoint.
