SEC DOE Co-Director Discusses the Foreign Corrupt Practices Act

Andrew Ceresney, Co-Director of the SEC Division of Enforcement ("DOE"), delivered the keynote address at the 30th International Conference on the Foreign Corrupt Practices Act ("FCPA"). Mr. Ceresney explained that, over the past 10 years, the SEC has greatly increased its FCPA enforcement, and noted in particular the DOE's development of a specialized unit devoted to investigating FCPA violations three years ago. Since the development of the FCPA unit, the SEC has filed over 40 FCPA actions and recovered over $240 million in disgorgement penalties.

While there has been progress, Mr. Ceresney said he wanted to discuss additional ways in which FCPA enforcement will grow. First, he explained that the FCPA is part of an increasing culture of compliance in U.S. companies. He noted the prevalence of FCPA compliance terms in most contracts, and mandatory FCPA compliance training for all employees. He also noted that more companies are hiring outside experts to conduct FCPA-specific due diligence. He reasoned that, "if the industry is paying attention and cleaning up its act," then the SEC must be doing something right.

Mr. Ceresney, referencing the release last year of the SEC and DOJ-authored Resource Guide to the U.S. Foreign Corrupt Practices Act, acknowledged that greater enforcement actions by the SEC created a need for the government to provide clear, meaningful guidance on how the government interprets and applies the FCPA. Importantly, and perhaps ominously, Mr. Ceresney emphasized the increasing collaboration between the SEC and foreign governments, especially in instances where the U.S. was seeking evidence that was located in foreign countries. Mr. Ceresney emphasized that authorities in foreign countries have become more cooperative, and noted that the SEC and DOJ this year jointly hosted the first-ever multilateral conference on FCPA enforcement. He made a tantalizing reference to a country which he did not name, but which presumably was China, which, for the first time ever, had been working in cooperation with U.S. authorities on anti-bribery matters. Among the tools that the SEC is using to overcome the challenges of foreign evidence, he highlighted the SEC's efforts to expand the availability of Memoranda of Understanding to obtain bank records, documents and testimony. Finally, Mr. Ceresney emphasized that cooperation among governments, individuals and companies is key in implementing FCPA successfully. He left no doubt that this cooperation was increasing on a daily basis.

Finally, Mr. Ceresney stated that, in the coming years, FCPA cases will focus on charging culpable individuals, not just companies.. He explained that, to better "root out corruption," the SEC has increased its pursuit of the individuals "responsible for the corporate malfeasance." According to Mr. Ceresney, a core principle of the DOE is to pursue culpable individuals whenever possible, and remain the "vigilant cop on the beat" the SEC has been referencing since Mary Jo White's installation as Chair of the SEC.

See: Andrew Ceresney Keynote Address.
See Also: Cadwalader C&F Memo "DOJ and SEC Issue FCPA Guidance" authored by Jodi Avergun, Raymond Banoun, Brad Bondi, Bret Campbell, Thomas Kuczajda, Adam Lurie, Anthony Mansfield, Gregory Mocek, Joseph Moreno, Christopher Tierney, Dale Turza, Kenneth Wainstein.