During the recently completed third quarter of 2016, the Department of Justice (“DOJ”) resolved two matters and the Securities and Exchange Commission (“SEC”) resolved ten matters. Financial penalties and disgorgement ordered in these actions exceeded $487 million. The disparity in the number of cases being brought by the two regulators is not surprising as the SEC has a lesser burden of proof, and in most of the cases being brought by the SEC, the charges are focused on violation of the internal controls and books and records provisions of the FCPA and not on the substantive bribery charge, which is much harder to prove.
In addition to the continuing trend of companies using third-party intermediaries to make illegal payments, the cases also involved the provision of improper gifts, travel and entertainment, as well as charitable contributions. Additionally, this quarter contained the first FCPA case against a hedge fund and a case in which a whistleblower was improperly impeded in his efforts to communicate with the SEC about alleged FCPA violations. In imposing sanctions in several of the cases, both the SEC and DOJ referenced company’s cooperation efforts and DOJ specifically referenced the standards outlined in the FCPA Pilot Program.
Finally, statements by U.S. and international regulators made clear that enforcement of anti-bribery and corruption regulations will continue and that the authorities will make every effort to protect whistleblowers, promote international cooperation, and use deferred prosecution agreements to resolve matters.