A Summary of the Statistics

 This article was reprinted with permission from FCPA Professor

My recent number crunching binge comes to an end.  The calculator deserves a break.

This post summarizes, in one spot, the various Foreign Corrupt Practices Act facts and figures published over the past few weeks.  Tweet them, link them, pass them along.  The more people who are familiar with actual FCPA enforcement statistics, the more informed the conversation will become.

As highlighted in this post, in 2013 the SEC collected approximately $300 million in 8 corporate FCPA enforcement actions.  Of note, 50% of the SEC’s FCPA enforcement actions were not subject to one ounce of judicial scrutiny, either because the action was resolved via an NPA or through an administrative order.  Of further note, in 2013 the SEC did not charge any individuals with FCPA offenses.

As highlighted in this post, in 2013 the DOJ collected approximately $420 million in 7 corporate FCPA enforcement actions.  Of note, none of the enforcement actions have involved (at least yet) any related enforcement actions against company employees.  Of further note, 100% of corporate DOJ enforcement actions in 2013 involved either an NPA or DPA and since 2010 93% of corporate DOJ enforcement actions have been resolved via NPAs or DPAs.

This post explores whether corporate FCPA enforcement in 2013 was up or down compared to prior years.  As explained in the post, the more accurate and reliable way to keep and analyze FCPA enforcement statistics is by focusing on unique instances of FCPA scrutiny (not settlement amounts) and tracking enforcement actions using the “core” approach.  Using this approach, corporate FCPA enforcement was down in 2013.

This post highlighted the alleged “foreign officials” of 2013.  Once again, a dominate enforcement theory was that employees of alleged state-owned or state-controlled enterprises, as well as foreign health care providers, are “foreign officials” under the FCPA.  Approximately 80% of 2013 corporate enforcement actions involved, in whole or in part, these enforcement theories.

This post highlighted DOJ individual FCPA enforcement actions in 2013.  It also highlighted that 53% of the individuals charged by the DOJ with FCPA criminal offenses since 2008 have been in just four cases and 75% of the individuals charged by the DOJ since 2008 have been in just nine cases.  There have been 60 corporate DOJ FCPA enforcement actions since 2008 and in 44 actions (or 73%) there has not (at least yet) been any DOJ charges against company employees.  Of the individuals charged by the DOJ with FCPA criminal offenses since 2008, 69% were employees or otherwise affiliated with private business entities even though 80% of corporate DOJ FCPA enforcement actions during the same time period were against publicly traded corporations.  In short, a private entity DOJ FCPA enforcement action is approximately three times more likely to have a related DOJ FCPA criminal prosecution of an individual than a public entity DOJ FCPA enforcement action.

This post examined a relevant datapoint concerning the relationship between NPAs and DPAs and DOJ individual prosecutions.  Since NPAs and DPAs were first introduced to the FCPA context, 83% of corporate DOJ enforcement actions that were the result of a criminal indictment or resulted in a guilty plea by the corporate entity to FCPA violations resulted in related criminal charges of company employees.  By comparison, only 9.8% of corporate DOJ FCPA enforcement actions resolved solely with an NPA or DPA resulted in related criminal charges of company employees.  These data points are useful in assessing the quality and legitimacy of many corporate DOJ FCPA enforcement actions.  Instead of asking the ”but nobody was charged” question, the more appropriate question ought to be – do NPA and DPAs always represent provable FCPA violations?

This post highlighted SEC individual FCPA enforcement actions in 2013.  It also highlighted that 64% of the individuals charged by the SEC with FCPA civil offenses since 2008 have been in just five cases.  There have been 65 corporate SEC FCPA enforcement actions since 2008 and in 53 actions (or 82%) there has not (at least yet) been any SEC charges against company employees.   This figure is higher than the 73% DOJ figure, a notable statistic given that the SEC, as a civil law enforcement agency, has a lower burden of proof in an enforcement action.  This data point is likewise useful in assessing the quality and legitimacy of many corporate SEC FCPA enforcement actions.  Instead of asking the “but nobody was charged” question, the more appropriate question ought to be, given the SEC’s neither admit nor deny settlement policy, administrative orders – or now NPAs - do such settlements always represent provable FCPA violations?

All of the above facts and figures were assembled using the “core” approach as well as the definition of an FCPA enforcement action described in this prior post.

 Read more articles on the FCPA by Mike Koehler at FCPA Professor.

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