A report from Shearman & Sterling recently said that the average Foreign Corrupt Practices Act (FCPA) penalty in 2014 was $156.6 million — the highest in U.S. history. As such, it might be no surprise that more FCPA regulation will be on the way in 2015, and this time, the Securities and Exchange Commission (SEC) will be coming with even more scrutiny.
At a Corporate Counsel Institute conference on March 12, SEC enforcement director Andrew Ceresney said that the agency will pursue more FCPA claims this year, cracking down on foreign bribery. Already, he said, the SEC has pursued more FCPA cases in the first five months of FY2015 than it did in all of FY2014.
In particular, he noted that the SEC will be casting a more critical eye towards one key area of the compliance process. “We are very focused on internal controls. I think you will find we are active in this area in the coming months,” Ceresney said, as reported by Pensions & Investments.
And how is the SEC pursuing this higher number of cases? It seems that corporate legal departments aren’t the only ones embracing technology. Ceresney said that the SEC expects a wider variety of FCPA cases to be brought now that the agency has built up its own in-house analytics. Ceresney says that “now we are able to build cases on our own. This is exciting for us.”
It may be less exciting for in-house counsel, however. Over the past 18 months, a number of companies have been hit with large FCPA fines, starting with Alcoa’s $384 million fine in January 2014 and continuing through Alstom’s $775 million fine in December 2014. In other cases, such as Wal-Mart’s, penalties are still pending.
However, there is hope when facing an SEC probe into bribery charges. In handing down a $16 million FCPA penalty to Goodyear, the SEC noted the “remedial acts promptly undertaken” by the company. Edward Kang, a former federal prosecutor and current attorney at Alston & Bird, told InsideCounsel, “Goodyear is receiving a far more lenient penalty in this case…. The SEC went out of its way to highlight the company’s cooperation and remedial efforts.”