SEC Director of Enforcement Reviews FCPA Developments

SEC Division of Enforcement (the "Division") Director Andrew Ceresney highlighted developments over the past fiscal year in the SEC's Foreign Corrupt Practices Act ("FCPA") program. The Director noted several areas:

• The Importance of Self-Reporting and Cooperation. The Division determined that a company must self-report misconduct in order for them to recommend a Deferred Prosecution Agreement or Non-Prosecution to the SEC in an FCPA case.
• Focus on Individual Liability. “Holding individuals accountable for their wrongdoing is critical to effective deterrence and, therefore, the Division considers individual liability in every case.” Despite “formidable challenges” in FCPA cases, “expect to see more FCPA cases against individuals.
• Effective Coordination with International Regulators and Law Enforcement. Mr. Ceresney said that he "fully expect[s] the pace and extent of foreign agencies' cooperation in the FCPA space to grow over the coming years as the Division continues to forge new relationships abroad and strengthen those [that it has already]."
• Enforcing the FCPA Statute to Its Fullest Extent. Mr. Ceresney said that the Division is asking more relevant questions to determine whether one has made "a payment or provision of 'anything of value' to a foreign official in order to induce that official to take official action or obtain an improper advantage for the purpose of obtaining or retaining business," including:
  • Was the gift, donation, favor or hiring requested by the foreign official?
  • Did the company official believe that the gift, donation, favor or hiring would advance their business interests and help them to obtain particular business, or an improper advantage with the foreign official?
  • Was the gift, donation, favor or hiring consistent with company policy and practice?
  • Were the company's normal procedures followed in connection with the gift, donation, favor or hiring?
  • Would the gift, donation, favor or hiring have been offered if there were no potential business benefit?

Mr. Ceresney delivered his remarks at the American Conference Institute's 32nd FCPA Conference.