We have never seen, and may well never see again, a year of FCPA corporate enforcements as we did in 2016. Combined, the Department of Justice (DOJ) and Securities and Exchange Commission (SEC) initiated 27 corporate enforcement actions and nearly $2.48 billion in total fines and penalties. This is the highest level of enforcement since the statute’s enactment in 1977. There are many lessons to be learned from the largest of these cases, which are still reverberating within the compliance profession and will continue to do so into the foreseeable future.
Smaller cases may provide even more interesting fact patterns to be studied by chief compliance officers (CCOs) and compliance professionals who want to prevent and detect bribery in their organizations.
The new enforcement directions taken in headline-creating cases, such as Och-Ziff and JPMorgan Chase, should be considered by every compliance practitioner. However the lesser known cases need to be considered as well. The majority of 2016’s FCPA enforcement actions did not involve substantial, company-wide bribery schemes leading to massive penalties, but rather small-to-medium-sized penalties and more routine bribery schemes. These smaller cases may provide even more interesting fact patterns to be studied by chief compliance officers (CCOs) and compliance professionals who want to prevent and detect bribery in their organizations.
Last year was one for the FCPA record books in ways much greater than just enforcement numbers might indicate. It certainly began with a huge bang – the month of February saw more FCPA enforcement actions than all of 2015. April brought us the Justice Department’s FCPA Pilot Program, which enshrined the calculus for reduction of FCPA fines and penalties up to 50 percent. This program was then expanded in the summer of 2016 with multiple companies receiving full declinations with no fines or penalties. Yet some of the biggest developments came in the fall. Not only was this the season with the largest fines and penalties but it also introduced the mechanism of joint inter-country enforcement actions presaging an entirely new world of global anti-corruption enforcement. A review of lessons learned from case details and storylines is the editorial focus of my latest book, 2016-The Year in Corporate FCPA Enforcement: Cardinal and Provident.
The record-setting year for FCPA shows the DOJ’s and SEC’s clear commitment to the global fight against bribery and corruption.
In addition to the impact of enforcement actions, we must also consider the public comments of the regulators on FCPA and compliance. Comments throughout the year clearly foreshadowed many of 2016’s largest enforcement actions. Comments made near the year’s end about the globalization of both anti-corruption investigation and enforcement, highlight an increase in anti-corruption enforcement and, therefore, a need for even more robust compliance programs going forward.
The record-setting year for FCPA shows the DOJ’s and SEC’s clear commitment to the global fight against bribery and corruption. This may well be the most significant message from 2016 for the compliance profession.