FCPA White Paper
Summary
In 2012, DOJ and the SEC brought 25 new Foreign Corrupt Practices
Act ("FCPA") enforcement actions, a significant decrease
from the number of FCPA enforcement actions brought in 2011 (45)
and the prolific 2010 (71). However, there is no reason to suspect
that DOJ and the SEC are losing their zeal for enforcement. Rather,
it is likely that DOJ and the SEC are juggling the approximately
150 open investigations and were distracted by the drafting of
their comprehensive FCPA Resource Guide, which was released in
November 2012, as well as several trials.
Many trends from 2011 continued into 2012, including DOJ's and
the SEC's willingness to reward companies for their swift
voluntary disclosure and ongoing cooperation. In at least one
significant case (U.S. v. Peterson), DOJ and the SEC
declined to bring an enforcement action against the individual
defendant's corporate employer, financial services giant Morgan
Stanley, noting Morgan Stanley's rigorous FCPA compliance
program, voluntary disclosure, and cooperation. In addition, the
trend away from using independent compliance
monitors/"consultants," in favor of self-monitoring and
periodic self-reporting, continued. DOJ's and the SEC's
targeting of the health care and life sciences industries continued
to bear fruit. Indeed, more than half of DOJ's FCPA enforcement
actions this year were brought against medical device manufacturers
and/or pharmaceutical companies.
On the trial front, the government continued to experience
significant setbacks. In early 2012, the government dismissed the
charges against the remaining SHOT Show defendants, with
the judge noting that the dismissal closed a "long and sad
chapter of white collar criminal enforcement." In May, the
government dropped its appeal in Lindsey Manufacturing, in
which Venable LLP's Jan Handzlik was counsel to Lindsey
Manufacturing and Dr. Keith Lindsey. The District Court had
previously dismissed the convictions for prosecutorial
misconduct.
FCPA legislative reform efforts seemed to fade away in 2012, with
the issuance of DOJ's and the SEC's highly-anticipated
"FCPA Guidance" in November. The Guidance, while not
providing much that is new, nevertheless sheds light on DOJ's
and the SEC's enforcement priorities and is a comprehensive and
helpful reference manual for the FCPA. Meanwhile, the
implementation of the Dodd-Frank Whistleblower Provisions, which
monetarily reward those who provide information that results in a
successful enforcement action, are poised to impact the enforcement
landscape. Approximately 4% of the 3,001 tips received through the
Dodd-Frank Whistleblower Program during its first year were
FCPA-related.
In 2012, countries other than the United States continued to be
active in policing global corruption. July 2012 marked the one-year
anniversary of the U.K. Bribery Act taking effect. Countries like
China and India have passed (or are considering) new measures to
strengthen their anti-bribery prohibitions. And some European
nations, including France and Germany, have ramped up their
prosecutions of individuals and corporations for foreign bribery.
All this adds an additional layer of complexity to anti-corruption
compliance for multi-national corporations.
At the same time, some trends from 2011 ebbed in 2012—most
notably, the trend of bringing FCPA enforcement actions against
individuals. In 2012, only five people were criminally or civilly
charged with FCPA violations, compared to 20 people in 2011, and 18
in 2010. It will be interesting to see whether this is a permanent
decline, given the difficulties at least DOJ has encountered in its
prosecution of individuals.
To view and download Venable's FCPA Snapshot - 2012 in its
entirety, please
Click Here.
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