In a pair of recent articles (available here and here), practitioners have been crunching the numbers, and 2016 is on near-record pace for Foreign Corrupt Practices Act (FCPA) enforcement action dispositions. Through October, 2016 has seen 39 FCPA enforcement actions resolved, a pace that would have government agencies end the year with 48-plus dispositions and would be second only to the 72 dispositions in 2010. Even if the number of enforcement action dispositions stays at 39, 2016 would still have as many or more dispositions than every other year since 2006.
The numbers are staggering, but what is driving this dramatic rise enforcement? A key contributing factor to this enforcement trend has been a significant increase in standalone FCPA enforcement actions brought by the SEC. In fact, thus far in 2016, the SEC has resolved twice as many FCPA enforcement actions (26) than the DOJ (13). The SEC has not outpaced the DOJ in FCPA enforcement actions since 2007 when it resolved 20 actions to the DOJ’s 19. Interestingly, the recent articles demonstrate that the SEC’s involvement in FCPA investigations is not a new phenomenon as the agency has been involved in 70% to 90% of FCPA investigations since 2006, though many of these were dubbed ‘parallel’ enforcement actions alongside the DOJ. It also appears that the DOJ has recently turned its resources to pursuing high-value enforcement actions, potentially explaining the dramatic shift in the volume of actions resolved.
With enforcement at near record levels, companies must be more vigilant than ever with their FCPA compliance programs. Further, as the SEC takes the lead in investigations and prosecutions, its agents may ask new questions and press compliance officers and their programs in new ways. Therefore, it is imperative that companies continue to update and improve their FCPA compliance and training programs as there is no indication that this trend of enhanced enforcement is waning.