In our memo last year, we acknowledged that it was close to impossible to predict the likely impact that the newly elected Trump administration would have on white-collar and regulatory enforcement. (White Collar and Regulatory Enforcement: What to Expect in 2017 (PDF: 240 KB)) Instead, we set out a list of initiatives we urged the new administration to consider, including clarifying standards for when cooperation credit would be given, reducing the use of monitors, and giving greater weight to a company’s pre-existing compliance program when exercising prosecutorial discretion, among other suggestions. While the DOJ under Attorney General Jeff Sessions has, for example, taken some steps toward clarifying the applicable standards for cooperation and increasing incentives to disclose misconduct in the FCPA area, few other policy choices or shifts in approach have been articulated or implemented. Continue reading →
This past year marked the 40th anniversary of the U.S. Foreign Corrupt Practices Act (“FCPA”). Since its enactment in 1977, the U.S. Department of Justice (the “DOJ”) has brought approximately 300 FCPA enforcement actions, while the U.S. Securities and Exchange Commission (the “SEC”) has brought approximately 200 cases. This anniversary year, the first year of the Trump administration, demonstrated that the FCPA continues to be a powerful tool in combating corruption abroad and encouraging compliance at global companies.
As we have observed, in its early days, the Trump Administration has stressed its intention to maintain continuity in white-collar enforcement, including through its recent extension of the FCPA Pilot Program. Consistent with that approach, the first FCPA action under the new administration was a Pilot Program declination, closing an investigation without enforcement action other than disgorgement. Continue reading →
On September 29, 2016, the U.S. Department of Justice (“DOJ”) issued two letters “closing its investigations” into alleged violations of the U.S. Foreign Corrupt Practices Act by HMT LLC, a Texas based manufacturer, supplier and servicer of above ground liquid storage tanks, (the “HMT Declination”) and NCH Corporation, a Texas based industrial supply and maintenance corporation (the “NCH Declination). Unlike in the three earlier “declinations” the DOJ issued since the start of its FCPA Enforcement “Pilot Program,” the companies here (HMT and NCH) are not issuers, so there were no parallel Securities and Exchange Commission (“SEC”) enforcement actions. Each declination also includes what are described as findings of the DOJ’s investigation underlying violations of the FCPA and a requirement that each company pay “disgorgement” to the U.S. Treasury. The HMT and NCH declinations therefore raise the question of whether and to what extent the Pilot Program, in addition to offering guidance on how to receive a declination, has altered the meaning of what a declination ordinarily will be. Specifically, under what circumstances can a company receive a declination without the DOJ publicizing its “findings” and the company paying disgorgement (i.e., a “clean” declination)? Continue reading →
Addressing a full house of practitioners, scholars and government officials on September 10, 2015, Deputy Attorney General Sally Quillian Yates announced the Department of Justice’s latest efforts to pursue corporate executives who had violated the law. “Crime is crime,” Yates told her audience, and the Department was committed to “holding lawbreakers accountable regardless of whether they commit their crimes on the street corner or in the boardroom.”
To demonstrate this renewed vigor, Yates summarized her September 9, 2015 Memorandum, entitled “Individual Accountability for Corporate Wrongdoing,” which instantaneously became known as the Yates Memo (PDF: 449 KB). Several of its provisions were uncontroversial and were accepted without comment. The measure attracting most attention was the Department’s stance on corporate offenders seeking prosecutorial leniency. Continue reading →
To what extent can a nonresident foreign national be prosecuted for violations of the Foreign Corrupt Practices Act (FCPA) when he neither is an agent of a domestic concern nor has committed acts while physically present in U.S. territory? Does the fact that the FCPA explicitly creates criminal liability in only these two situations mean that he cannot be charged for conspiring to violate the Act, or aiding and abetting a violation? Such was the issue presented to Judge Janet Bond Arterton in United States v. Hoskins. Her rejection of the government’s conspiracy and accomplice theories in that case is presently up on appeal in the Second Circuit, but an intervening Supreme Court case may well lead the Circuit to see the case a bit differently. Continue reading →