In early 2010, the SEC (see here) announced a series of measures “to further strengthen its enforcement program by encouraging greater cooperation from individuals and companies in the agency’s investigations and enforcement actions.”
The SEC’s then Director of Enforcement called the measures “a potential game-changer for the Division of Enforcement.”
Among the measures the SEC adopted was use of deferred prosecution agreements and non-prosecution agreements – resolution vehicles the SEC described as “tools [that] have been regularly and successfully used by the Justice Department in its criminal investigations and prosecutions” (which of course was and still remains a debatable point).
However, since this “game-changing” moment at the SEC over a decade ago, the agency has only used a DPA twice to resolve an issuer FCPA enforcement action and an NPA three times. Moreover, the SEC’s last use of an NPA or DPA to resolve an issuer FCPA enforcement was in mid-2016. All of which begs the question: is the SEC finished using NPAs and DPAs to resolve issuer FCPA enforcement actions?
As highlighted in this prior post, in 2011 the SEC first used a DPA to resolve an FCPA enforcement action against Tenaris in connection with conduct in Uzbekistan. Pursuant to the DPA, the company agreed to pay approximately $5.4 million in disgorgement and prejudgment interest. This post highlights what other FCPA commentators were saying about the SEC’s first DPA. Incidentally, as highlighted in this post, Tenaris is again under FCPA scrutiny.
As highlighted in this prior post, the SEC first used an NPA to resolve an FCPA enforcement action in a matter involving Ralph Lauren. Pursuant to the NPA – involving conduct in Argentina – the company agreed to pay $700,000 in disgorgement and prejudgment interest.
The next use of an alternative resolution vehicle by the SEC to resolve an FCPA enforcement action occurred in 2015 in an enforcement action against PBSJ Corp. – see here. Pursuant to the DPA – involving conduct in Qatar and Morocco – the company agreed to pay approximately $3.4 million in disgorgement, prejudgment interest and a civil penalty.
As highlighted in this prior post, in mid-2016, in a rather unusual development, the SEC announced on the same day and pursuant to the same press release that it had entered into two DPAs against separate companies. One NPA involved Nortek concerning conduct in China in which the company agreed to pay $322,000 in disgorgement and prejudgment interest and the second NPA involved Akamai Technologies also concerning conduct in China in which the company agreed to pay $672,000 in disgorgement and prejudgment interest.
In the last approximate 5 years, the SEC has not returned to NPAs or DPAs to resolve FCPA enforcement actions begging the question: is the SEC finished with NPAs and DPAs to resolve issuer FCPA enforcement actions?