The Enforcement Outcomes of the Australian Securities and Investments Commission

By Ian Ramsay and Miranda Webster

The following post provides an overview of the key findings from our research on the enforcement outcomes of the Australian Securities and Investments Commission (ASIC) for the five-year period from 1 July 2011 to 30 June 2016. The full journal article can be accessed here.

ASIC is Australia’s corporate, markets, financial services and consumer credit regulator. This government organization regulates Australian companies, financial markets, financial services organisations and professionals who deal and advise in investments, superannuation, insurance, deposit taking and credit. ASIC dedicates a significant amount of resources (around 70%) to surveillance and enforcement activity, reflecting its view that enforcement is an important part of its regulatory role. Continue reading →

DOJ Expands and Codifies Policy Incentivizing Corporations to Voluntarily Self-Disclose FCPA Violations

by Eric Volkman, Erin Brown Jones, and Bridget R. Reineking

On November 29, 2017, Deputy Attorney General Rod J. Rosenstein announced that the US Department of Justice (DOJ) has implemented a permanent, revised version of the Foreign Corrupt Practices Act (FCPA) Pilot Program.[1] The Pilot Program — which was launched as a one-year trial in April 2016 by then-Assistant Attorney General for the Criminal Division (and now Latham partner) Leslie Caldwell — was extended indefinitely in April 2017 to allow DOJ to evaluate the program’s efficacy.[2] Rosenstein announced that the enhanced policy — now called the FCPA Corporate Enforcement Policy (PDF: 51 KB) (FCPA Policy) — will be incorporated into the United States Attorneys’ Manual (USAM). Like its predecessor, the FCPA Policy aims to encourage companies to make timely and voluntary disclosures of wrongdoing under the FCPA, while providing additional concrete incentives rewarding corporations for cooperation.

This policy announcement is likely the first of several DOJ policy changes and/or enhancements under the new administration. As detailed in Latham’s October 2017 Client Alert (PDF: 93.58 KB), Rosenstein recently announced that DOJ was reviewing a wide range of existing corporate enforcement policies, including the Pilot Program, DOJ’s policy on “Individual Accountability for Corporate Wrongdoing” (the Yates Memo), and other DOJ policies and memoranda — with the intention of ultimately incorporating the revised policies into the USAM. Continue reading →

Behind the Annual SEC Enforcement Report: 2017 and Beyond, Part III

by Urska Velikonja

The following is the third post in a series of three on recent SEC enforcement. The full report can be accessed here. A note of caution to the readers: the SEC does not share enforcement data. All three posts are based on a database of SEC enforcement actions I have put together along with several research assistants, covering the period between 2007 and 2017. The data was collected by hand, and reviewed at least once. Entries were compared with SEC releases and reports, but the chance of error remains.

Litigation Venue

The Dodd-Frank Act authorized the SEC to bring almost any enforcement action in an administrative proceeding. Before Dodd-Frank, the SEC could secure civil fines against registered broker-dealers and investment advisers in administrative proceedings, but had to sue in court non-registered firms and individuals, including public companies and executives charged with accounting fraud, as well as traders charged with insider trading violations. After the Dodd-Frank amendment, save for a few remedies that can only be obtained in court, the SEC can choose the forum in which it prosecutes enforcement actions. Continue reading →

Behind the Annual SEC Enforcement Report: 2017 and Beyond, Part II

by Urska Velikonja

The following is the second post in a series of three on recent SEC enforcement. The full report can be accessed here. A note of caution to the readers: the SEC does not share enforcement data. All three posts are based on a database of SEC enforcement actions I have put together along with several research assistants, covering the period between 2007 and 2017. The data was collected by hand, and reviewed at least once. Entries were compared with SEC releases and reports, but the chance of error remains.

I. Enforcement Against Entities

The first post observed that enforcement against individual defendants remained largely unchanged in the second half of the 2017 fiscal year. Enforcement against entities, on the other hand, has changed quite substantially. Fewer entities were targeted in actions brought in the second half of FY 2017: 34% of defendants (165 of 488) in standalone actions in the second half were entities, compared with 47% (201 of 427) in the first half of the year. Continue reading →

A French Court Authorizes the First-Ever “French DPA”

by Frederick T. Davis

In December 2016 the French government finally passed the so-called “Loi Sapin II” in order to bolster its ability to penalize overseas bribery. Its unstated but clear goal was to achieve some degree of parity with US efforts in this area, which had led to a number of highly publicized cases where well-known French companies had paid fines totaling well over $2 billion to the US treasury to resolve criminal matters that could well have been resolved in France.  A key provision of the new law is a procedure that permits a negotiated outcome, similar in concept to a US Deferred Prosecution Agreement (“DPA”), that avoids a criminal conviction.  On November 14, 2017, the first such agreement was announced by the National Financial Prosecutor of France.  While many details of the deal will not be known until the release of the court’s opinion approving it, which may be available as early as the end of November, the fact of the outcome and its known parameters are very significant. Continue reading →

Behind the Annual SEC Enforcement Report: 2017 and Beyond, Part I

by Urska Velikonja

The following is the first post in a series of three on recent SEC enforcement. The full report can be accessed here. A note of caution to the readers: the SEC does not share enforcement data. All three posts are based on a database of SEC enforcement actions I have put together along with several research assistants, covering the period between 2007 and 2017. The data was collected by hand, and reviewed at least once. Entries were compared with SEC releases and reports, but the chance of error remains.

Last week, the SEC released its enforcement report for fiscal year 2017. In it, the SEC reported moderate declines in the number of filed enforcement actions, 754 compared with 868 in fiscal year 2016, and in the total monetary penalties ordered, $3.8 billion compared with $4.1 billion in fiscal 2016. The narrative accompanying the release suggests that despite the change in SEC leadership, enforcement remains consistent. Continue reading →

Negotiated Corporate Criminal Settlements: Bringing DPA Mandates Within the Rule of Law

by Jennifer Arlen

Countries around the world are beginning to embrace negotiated corporate criminal settlements, cognizant of U.S. federal prosecutors’ success in using deferred and non-prosecution agreements (hereinafter D/NPAs) to impose both substantial monetary sanctions and mandated reforms. Negotiated settlements, and the mandates they impose, can materially enhance governments’ ability to deter corporate crime when used effectively (Arlen and Kahan 2017).

Yet the existing U.S. approach to mandates needs to be reformed because it suffers from a material weakness: the Department of Justice provides less guidance and formal oversight over mandates imposed through D/NPAs than is required to ensure that prosecutorial authority over mandates is consistent with the Rule of Law.

Continue reading →

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

by Steven R. Peikin

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.

Continue reading →

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.

Continue reading →

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 →