Increasing International Cooperation
Co-Director Peikin emphasized the key role that international cooperation will continue to play in enforcing anti-corruption laws. Praising the “upward trajectory” of coordination between international regulators and law enforcement, Mr. Peikin touted two cases against Scandinavian and Brazilian companies as examples of the SEC’s ability to work beyond U.S. borders in partnership with foreign government agencies to increase deterrence, efficiency and coordination of global outcomes in FCPA enforcement.
Holding Culpable Individuals Accountable
Mr. Peikin also highlighted the SEC’s focus on taking action against individual company officials. In particular, he described individual liability as a core principle of FCPA enforcement, calling it a more effective deterrent than corporate liability alone. While Mr. Peikin noted that it is especially challenging to hold individuals accountable under the FCPA because the officers in question are often foreign citizens with limited U.S.-based assets, the co-director confirmed that the SEC will continue to prioritize partnerships with other national regulators as part of the SEC’s enforcement efforts in targeting assets held outside the United States for disgorgement.
Bringing Cases More Quickly
Finally, Co-Director Peikin discussed the SEC’s continuing response to the Supreme Court’s decision in Kokesh v. SEC, which imposed a five-year statute of limitations on disgorgement in SEC enforcement actions. Mr. Peikin conceded that Kokesh’s impact on FCPA enforcement will likely be significant because of how frequently the SEC seeks disgorgement as a remedy in FCPA cases. In response to the Kokesh decision, however, Co-Director Peikin announced that the SEC will renew its focus on bringing FCPA cases as quickly as possible to ensure that the SEC can pursue all remedies within the applicable statute of limitations.
Considerations
In limiting the SEC’s ability to seek disgorgement to the limitations period, Kokesh dealt a significant setback to the SEC in FCPA cases, where the SEC routinely resorts to filing civil cases years after the resolution of a corresponding DOJ criminal investigation, and utilizes the threat of disgorgement to persuade defendants into settling allegations of FCPA and other securities law violations. As Co-Director Peikin has recently announced, however, the SEC is expected to respond to the Supreme Court’s decision by intensifying the SEC’s efforts to hold individual corporate officers liable for FCPA violations, conducting more aggressive FCPA investigations and increasing international cooperation with foreign enforcement agencies.
We would like to thank Senior Law Clerk David C. Grossman for his contribution to this alert.