Reflections on the Past, Present, and Future of the SEC’s Enforcement of the Foreign Corrupt Practices Act

New York University School of Law, New York, NY

Nov. 9, 2017

Good afternoon, and thank you for inviting me to speak today. Before I begin, let me give the required disclaimer that the views I express here today are my own and do not necessarily represent the views of the Commission or its staff.[1]

I am honored to be here to mark with you the 40th anniversary of the enactment of the Foreign Corrupt Practices Act (FCPA) and the 20th year of the OECD anti-bribery convention. I want to thank New York University’s Program on Corporate Compliance and Enforcement for hosting this event. Programs like this one provide important forums for dialogue on critical enforcement issues, and I am pleased that this gathering has assembled so many familiar and distinguished practitioners in FCPA enforcement, our colleagues in domestic and international law enforcement, and academics who are interested in this space. Collaboration and coordination is integral to the Division of Enforcement’s efforts to combat bribery through the enforcement of the FCPA, and the OECD has played a pivotal role in fostering global efforts against bribery and corruption.

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Acting Assistant Attorney General Kenneth Blanco Keynote Address on FCPA and Anti-Bribery Convention

by Kenneth A. Blanco

Acting Assistant Attorney General Kenneth A. Blanco Delivers Remarks at FCPA/OECD Anniversary Conference Organized by the DOJ, OECD, and SEC, and Hosted by PCCE November 9, 2017

Good morning and thank you for that kind introduction, Sandra.

It is a pleasure to be here today.  I want start to by thanking the U.S. Securities and Exchange Commission (SEC) and the Organization for Economic Cooperation and Development (OECD) for co-organizing this event with the Department of Justice.  I also want to thank the New York University School of Law for hosting us.

Today, I have the honor and the privilege of speaking with you as the Acting Assistant Attorney General for the Criminal Division of the United States Department of Justice.

As many of you know, the Criminal Division spearheads the Department’s efforts in financial investigations, transnational crime, health care fraud, securities fraud, intellectual property theft, computer hacking, money laundering, sanctions violations, illicit finance, asset recovery, and, of course, the Foreign Corrupt Practices Act (FCPA) and kleptocracy initiative, to name just a few areas in which we are leading.

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Biased Bureaucracy: Inequality and Corruption in Public Administration

by Paul Lagunes

On Election Day, the modern State treats every citizen in the same terms—we all get one vote. This political fact serves as a reminder that the principle of democracy is intimately related to another principle, that of equality.

Vote buying, electoral intimidation, and other undesired practices remain a challenge for young democracies. That said, the principle of equality before government faces its biggest challenge during election periods. On a regular basis, phrases like “who do you know?” determine the way that public servants treat citizens. Continue reading

Trend Setting in Cloud Computing Legal Contracts….Who Knew?

By Joanna Fields

Over the past two years, US firms have experienced a significant increase in the number of mandatory regulatory reports, including the future Consolidated Audit Trail (CAT), Markets in Financial Instruments Directive (MiFID II) requirements applicable to firms doing business in Europe, new reporting requirements for swaps, the SEC’s Trade Reporting and Compliance Engine (TRACE), and the Treasury Department’s Regulation Systems Compliance and Integrity (Reg SCI).  Each of these reporting requirements could require some financial firms to process approximately a terabyte of metadata every day.  This has resulted in financial firms’ renewed interest in leveraging cloud technology.

Although it may seem like a recent technology trend in conversation, early network references to cloud computing date back to the 1960s.   The cloud computing discussed today has been derived by various technology marketing campaigns to make the language of engineers colloquial.  The cloud is an easy to adopt metaphor that has a myriad of meanings; for example, firms that allow employees to Bring Your Own Devices (BYOD) or issue laptops for remote access, are technically using cloud computing. Continue reading

Russia Considers Enhanced Whistleblower Protections

by Jane Shvets, Anna V. Maximenko, and Elena Klutchareva

Effective anti-corruption compliance programs include protections for whistleblowers that raise corruption concerns.  Article 13.3 of Russia‘s 2008 Federal Law No. 273-FZ on Counteracting Corruption (the “Anti-Corruption Law”) addressed Russian lawmakers’ expectations regarding effective compliance programs.[1]  But the law was silent on whistleblower protections.  Recently proposed legislation in Russia may help address this gap.

Even before the Anti-Corruption Law came into effect, Russian law included several provisions that could be interpreted to provide some protection for whistleblowers.  For example, Russian employment law prohibits discrimination and sets out an exhaustive list of permissible grounds for dismissing an employee for cause; firing an employee for blowing the whistle on potential corruption is not among them.  As a result, firing an employee for whistleblowing could ran afoul of Russian employment law.  In addition, the Russian government can protect individuals whose security might be threatened as a result of their participation in criminal proceedings that involve alleged corruption.  The state might, for example, provide such witnesses with physical protection, relocate them, or even give them new identities. Continue reading

Response to Professor Sepinwall’s Article on Sentencing Reforms

by Lee S. Richards

In a recent post to this blog, Professor Amy Sepinwall made a startling argument.  Reflecting on the debate between liberals and conservatives over the Sentencing Reform and Corrections Act of 2016, she strongly suggested that the Act’s strengthening of the mens rea element in criminal cases should be limited to the disadvantaged and not extended to “the already advantaged.”  She applauded the proposed bill for providing “deserved fairness for the disadvantaged,” but appeared to lament the fact that a more stringent mens rea requirement under that bill would be available for “some senior corporate management ‘fat cats,’” as well.  This position is consistent with her defense of the “responsible corporate officer” doctrine, which does away with any mens rea requirement in certain cases against high level corporate officers. Continue reading

Insider Trading, a Vague Law With Heavy Consequences

by Walt Pavlo

Since Congress has not specifically defined insider trading, courts have interpreted the Securities Exchange Act’s prohibition against manipulative or deceptive means to determine whether a violation has occurred. The imprecision of securities law has led many people to weigh in on what constitutes a criminal act.  Recently, Antonia Apps wrote over 2,000 words on the Second Circuit’s recent insider trading decision, United States v. Martoma, 869 F.3d 58 (2d Cir. 2017), and Greg Morvillo wrote two posts to clarify his thoughts on that case. Can you imagine a crime that is so difficult to define that it continues to spark debate with each new decision from a court? Continue reading

Did the UK Supreme Court Make Progress on the Central Dilemma of White-Collar Crime?

by Samuel W. Buell

On October 25, 2017, the United Kingdom Supreme Court issued a fascinating and potentially groundbreaking opinion, in a civil suit for contract breach called Ivey v. Genting Casinos (UK) Ltd.[1]  As this post will explain, the UK Supreme Court refined a major component of English law of white-collar crime, while purporting to relegate that component to the dustbin.

The central problem in the substantive criminal law of white-collar offenses—an issue I have pursued in much of my scholarship (here, here, here, and here, for example)—is how the law draws lines between seriously morally wrongful business practices and those that are acceptable, even if, in hindsight, regrettably unwelcome.  The perennial challenge is to draw lines that are sufficiently clear to warn potential wrongdoers of criminal sanctions and that mark out only serious wrongdoers for imprisonment, while crafting those lines to be sufficiently broad and flexible to apply, and thus be effective, in an ever accelerating and more complex industrial world. Continue reading

Keeping Score of FIFA’s Corruption, Compliance and Efforts for Reform – Part 2

by Brandon D. Fox

Part 2 – Changing the Game Plan

In late June, FIFA, the world’s governing soccer organization, released the “Garcia Report,” chronicling the extensive corruption and conflicts of interest that occurred in FIFA’s awarding of the men’s 2018 and 2022 World Cup venues. Part 1 summarized the report’s findings. Part 2 discusses how specific steps and safeguards can mitigate the risks of misconduct and ensure cooperation among FIFA officials – and at any organization.

Leadership

FIFA’s problems started at the top.  FIFA’s investigators found an astounding number of executive committee members committed misconduct and showed disdain for the investigation.  FIFA’s failures were systemic and reflected a culture of corruption.  An organization’s culture cannot be fixed simply by strengthening rules or creating a targeted compliance program.  Indeed, these are meaningless if the leaders themselves are corrupt.  Executives must have integrity and show a commitment to everyone’s compliance with the law.  FIFA needs to identify candidates for its executive committee that have shown integrity and a dedication to complying with rules and laws. Continue reading

Keeping Score of FIFA’s Corruption, Compliance and Efforts for Reform – Part 1

by Brandon D. Fox

Part 1 – Foul Play

The first installment of this two-part series summarizes the Garcia Report’s findings of misconduct. Author Brandon Fox also focuses on the difficulties investigators faced as a result of leaders failing to cooperate and contrasts the misconduct and lack of cooperation to the U.S. Soccer Federation’s behavior.

In late June, FIFA, the world’s governing soccer organization, released the Garcia Report chronicling the extensive corruption and conflicts of interest that occurred in FIFA’s awarding of the men’s 2018 and 2022 World Cup venues.  This article summarizes the Garcia Report’s findings of misconduct, focusing on the difficulties investigators faced as a result of leaders failing to cooperate, and discusses how specific steps and safeguards can mitigate the risks of misconduct and ensure cooperation among FIFA officials – and at any organization. Continue reading

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