Материал: guide

In May of 2011, SEC entered into its first deferred prosecution agreement against a company for violating the FCPA.385 In that case, a global manufacturer of steel pipe products violated the FCPA by bribing Uzbekistan government officials during a bidding process to supply pipelines for transporting oil and natural gas. The company made almost $5 million in profits when it was subsequently awarded several contracts by the Uzbekistan government. The company discovered the misconduct during a worldwide review of its operations and brought it to the government’s attention. In addition to self-reporting, the company conducted a thorough internal investigation; provided complete, real-time cooperation with SEC and DOJ staff; and undertook extensive remediation, including enhanced anti-corruption procedures and training. Under the terms of the DPA, the company paid $5.4 million in disgorgement and prejudgment interest. The company also paid a $3.5 million monetary penalty to resolve a criminal investigation by DOJ through an NPA.386

For further information about deferred prosecution agreements, see SEC’s Enforcement Manual.387

Non-Prosecution Agreements

A non-prosecution agreement is a written agreement between SEC and a potential cooperating individual or company, entered into in limited and appropriate circumstances, that provides that SEC will not pursue an enforcement action against the individual or company if the individual or company agrees to, among other things: (1) cooperate truthfully and fully in SEC’s investigation and related enforcement actions; and (2) comply, under certain circumstances, with express undertakings. If the agreement is violated, SEC staff retains its ability to recommend an enforcement action to the Commission against the individual or company.

For further information about non-prosecution agreements, see SEC’s Enforcement Manual.388

Termination Letters and Declinations

As discussed above, SEC’s decision to bring or decline to bring an enforcement action under the FCPA is made pursuant to the guiding principles set forth in SEC’s

Enforcement Manual. The same factors that apply to SEC staff ’s determination of whether to recommend an enforcement action against an individual or entity apply to the decision to close an investigation without recommending enforcement action.389

Generally, SEC staff considers, among other things:

•the seriousness of the conduct and potential violations;

•the resources available to SEC staff to pursue the investigation;

•the sufficiency and strength of the evidence;

•the extent of potential investor harm if an action is not commenced; and

•the age of the conduct underlying the potential violations.

SEC has declined to take enforcement action against both individuals and companies based on the facts and circumstances present in those matters, where, for example, the conduct was not egregious, the company fully cooperated, and the company identified and remediated the misconduct quickly. SEC Enforcement Division policy is to notify individuals and entities at the earliest opportunity when the staff has determined not to recommend an enforcement action against them to the Commission. This notification takes the form of a termination letter.

In order to protect the privacy rights and other interests of the uncharged and other potentially interested parties, SEC does not provide non-public information on matters it has declined to prosecute.

What Are Some Examples of Past Declinations by DOJ and SEC?

Neither DOJ nor SEC typically publicizes declinations but, to provide some insight into the process, the following are recent, anonymized examples of matters DOJ and SEC have declined to pursue:

Example 1: Public Company Declination

DOJ and SEC declined to take enforcement action against a public U.S. company. Factors taken into consideration included:

•The company discovered that its employees had received competitor bid information from a third party with connections to the foreign government.

•The company began an internal investigation, withdrew its contract bid, terminated the employees involved, severed ties to the third-party agent, and voluntarily disclosed the conduct to DOJ’s Antitrust Division, which also declined prosecution.

•During the internal investigation, the company uncovered various FCPA red flags, including prior concerns about the third-party agent, all of which the company voluntarily disclosed to DOJ and SEC.

•The company immediately took substantial steps to improve its compliance program.

Example 2: Public Company Declination

DOJ and SEC declined to take enforcement action against a public U.S. company. Factors taken into consideration included:

•With knowledge of employees of the company’s subsidiary, a retained construction company paid relatively small bribes, which were wrongly approved by the company’s local law firm, to foreign building code inspectors.

•When the company’s compliance department learned of the bribes, it immediately ended the conduct, terminated its relationship with the construction company and law firm, and terminated or disciplined the employees involved.

•The company completed a thorough internal investigation and voluntarily disclosed to DOJ and SEC.

•The company reorganized its compliance department, appointed a new compliance officer dedicated to anti-corruption, improved the training and compliance program, and undertook a review of all of the company’s international thirdparty relationships.

Example 3: Public Company Declination

DOJ and SEC declined to take enforcement action against a U.S. publicly held industrial services company for

chapter 7

Resolutions

bribes paid by a small foreign subsidiary. Factors taken into consideration included:

•The company self-reported the conduct to DOJ and SEC.

•The total amount of the improper payments was relatively small, and the activity appeared to be an isolated incident by a single employee at the subsidiary.

•The profits potentially obtained from the improper payments were very small.

•The payments were detected by the company’s existing internal controls. The company’s audit committee conducted a thorough independent internal investigation. The results of the investigation were provided to the government.

•The company cooperated fully with investigations by DOJ and SEC.

•The company implemented significant remedial actions and enhanced its internal control structure.

Example 4: Public Company Declination

DOJ and SEC declined to take enforcement action against a U.S. publicly held oil-and-gas services company for small bribes paid by a foreign subsidiary’s customs agent. Factors taken into consideration included:

•The company’s internal controls timely detected a potential bribe before a payment was made.

•When company management learned of the potential bribe, management immediately reported the issue to the company’s General Counsel and Audit Committee and prevented the payment from occurring.

•Within weeks of learning of the attempted bribe, the company provided in-person FCPA training to employees of the subsidiary and undertook

an extensive internal investigation to determine whether any of the company’s subsidiaries in the same region had engaged in misconduct.

•The company self-reported the misconduct and the results of its internal investigation to DOJ and SEC.

•The company cooperated fully with investigations by DOJ and SEC.

•In addition to the immediate training at the relevant subsidiary, the company provided comprehensive FCPA training to all of its employees and conducted an extensive review of its anti-corruption compliance program.

•The company enhanced its internal controls and record-keeping policies and procedures, including requiring periodic internal audits of customs payments.

•As part of its remediation, the company directed that local lawyers rather than customs agents be used to handle its permits, with instructions that “no matter what, we don’t pay bribes”—a policy that resulted in a longer and costlier permit procedure.

Example 5: Public Company Declination

DOJ and SEC declined to take enforcement action against a U.S. publicly held consumer products company in connection with its acquisition of a foreign company. Factors taken into consideration included:

•The company identified the potential improper payments to local government officials as part of its pre-acquisition due diligence.

•The company promptly developed a comprehensive plan to investigate, correct, and remediate any FCPA issues after acquisition.

•The company promptly self-reported the issues prior to acquisition and provided the results of its investigation to the government on a real-time basis.

•The acquiring company’s existing internal controls and compliance program were robust.

•After the acquisition closed, the company implemented a comprehensive remedial plan, ensured that all improper payments stopped, provided

extensive FCPA training to employees of the new subsidiary, and promptly incorporated the new subsidiary into the company’s existing internal controls and compliance environment.

Example 6: Private Company Declination

In 2011, DOJ declined to take prosecutorial action against a privately held U.S. company and its foreign subsidiary. Factors taken into consideration included:

•The company voluntarily disclosed bribes paid to social security officials in a foreign country.

•The total amount of the bribes was small.

•When discovered, the corrupt practices were immediately terminated.

•The conduct was thoroughly investigated, and the results of the investigation were promptly provided to DOJ.

•All individuals involved were either terminated or disciplined. The company also terminated its relationship with its foreign law firm.

•The company instituted improved training and compliance programs commensurate with its size and risk exposure.