“We Follow the Money,” “The Pipeline Is Strong,” “If We Find You, It Is Going to Be a Worse Result”: FCPA Enforcers Talk About the Past Year and What’s to Come
The annual American Conference Institute (ACI) International Conference of the Foreign Corrupt Practices Act kicked off today with remarks from David Last, the new Chief of the Department of Justice’s FCPA Unit, and Charles Cain, the longtime Chief of the Securities and Exchange Commission’s FCPA Unit.
Here are some of the key takeaways:
- Criminal prosecutions of individuals are on pace with prior years, while the number of corporate enforcement actions by both the DOJ and SEC is down this year.
- The “pipeline is strong”: Both Last and Cain repeatedly said their units are busy at work and new enforcement actions are expected to be announced over the coming months. They noted that information continues to flow in from whistleblowers, cooperating witnesses, companies making voluntary disclosures, and foreign enforcement authorities. According to Last, referrals from foreign authorities are on the upswing. While Last said that “we don’t do industry sweeps,” he emphasized that DOJ prosecutors don’t just sit around and wait for cases to fall on their desks—they actively look for leads, including through data mining.
- The pandemic has caused delays, but less so over time as government, companies, and the defense bar have become more adept at conducting investigations and reaching resolutions using technology such as Zoom, Teams, and WebEx.
- International coordination is not just a trend; it’s an ongoing “reality,” according to Cain.
- DOJ likes data: In addition to data mining, Last discussed how data analytics can assist corporate compliance programs in identifying red flags and ensuring that the policies and procedures that exist on paper are actually working in practice.
- DOJ will “follow the money”: Last said that in corruption-related investigations, prosecutors follow the tried-and-true tactic of “follow[ing] the money” to root out misconduct, suggesting that money laundering and related charges are very much on the FCPA Unit’s mind. Last also said DOJ plans to use its new subpoena powers under the National Defense Authorization Act of 2021 to obtain foreign bank records, though he did strike a note of caution, stating that the subpoenas would be used only in “appropriate circumstances,” with due regard for “diplomatic sensitivities.”
- New and revived DOJ policies will influence FCPA enforcement: Last spoke about a variety of DOJ initiatives under the Biden Administration, including recent guidance from Deputy Attorney General Lisa Monaco. He observed that DOJ will be prioritizing individual prosecutions (a recurring theme of his remarks); conditioning corporate cooperation credit on disclosure of information about all potentially relevant individuals; considering the full panoply of prior corporate misconduct in making corporate charging decisions; and imposing monitorships in corporate resolutions as appropriate, particularly where an existing compliance program has multiple deficiencies. Last also made repeated reference to the DOJ’s Corporate FCPA Enforcement Policy, which rewards self-disclosure. “If we find you,” he said, “it is going to be a worse result.”
- The SEC is interested in the financial services sector: Cain pointed out that some of the SEC’s most significant FCPA enforcement actions over the past couple years have been against big banks and that the SEC will remain focused on the financial services sector in general.
© Arnold & Porter Kaye Scholer LLP 2021 All Rights Reserved. This blog post is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.