Shearman & Sterling's bi-annual Trends & Patterns in FCPA Enforcement report provides insightful analysis of recent enforcement trends and patterns in the U.S., the U.K. and elsewhere, as well as helpful guidance on emerging best practices in FCPA and global anti-corruption compliance programs.
INTRODUCTION:
Although the DOJ and SEC brought a relatively low number of FCPA enforcement actions in the first half of 2019, an unusually large portion of those enforcement actions resulted in penalties over $100 million. In the past, we have repeatedly noted that although the large FCPA enforcement actions grab the headlines, the bulk of enforcement actions are actually relatively small (often under $30 million in penalties). The first half of 2019 has been an exception, resulting in some of the highest penalty statistics of any half year of FCPA enforcement.
As we explain in this mid-year Trends & Patterns, among the highlights from the first half of 2019 were:
- Six corporate enforcement actions, with total sanctions of approximately $1.69 billion, make the first half of 2019 a fairly typical year in terms of number of enforcement actions, but significantly above-average in terms of total assessed sanctions;
- One of the longest-running and most expensive FCPA investigations finally came to a close when Walmart agreed to pay nearly $300 million to settle charges that it violated the FCPA, this after spending over $900 million on the multi-year investigation;
- As in recent years, one outlier enforcement action (MTS) and three other large enforcement actions distort the picture, raising the average corporate sanction thus far in 2019 to $282.1 million, whereas the true average, with the MTS outlier excluded, is significantly less than this figure ($168.5 million). Even the average excluding the outlier, however, is unusually high, and is indicative of the lack of small enforcement actions thus far in 2019;
- The DOJ brought charges against (or charges were unsealed against) twenty individuals, while the SEC brought claims against two individuals, making the first half of 2019 very active in terms of FCPA-related cases brought against individuals; and
- The DOJ continued its recent practice of providing guidance to companies by revising its FCPA Corporate Enforcement Policy and providing guidance on the evaluation of compliance programs.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
