Issue link: https://digital.shearman.com/i/1265921
INTRODUCTION: RECENT TRENDS AND PATTERNS IN FCPA ENFORCEMENT FCPA DIGEST July 2020 3 In the first half of 2020, the overall number of corporate enforcement actions dropped somewhat from recent years, with only six actions brought by the DOJ and SEC. The number of individual enforcement actions dropped as well, with only five individuals charged or indictments unsealed in the first half of 2020. As a benchmark, U.S. officials brought nineteen corporate enforcement actions in the last six months of 2019 and charged (or unsealed charges against) eighteen individuals. This year provides a significant departure from past enforcement trends, due of course to the novel coronavirus outbreak, which has commanded the nation's attention and disrupted business as usual. Since the declaration of a national emergency in mid-March in response to the COVID-19 outbreak in the U.S. and the ensuing shuttering of normal governmental activity, the DOJ has only brought two corporate enforcement actions (Novartis Hellas and Alcon Pte) and no individual enforcement actions. In that same time period, the SEC only filed one complaint against an individual (Asante Berko) and charged two companies with FCPA violations (Eni S.p.A. and Novartis AG). Whether FCPA enforcement actions resume their normal frequency in the second half of 2020 remains to be seen; for the moment, a dearth of publicly announced FCPA cases may lead to a build-up of prepared indictments and charges. Of note, even while the number of enforcement actions lags behind recent trends, the Airbus action, which proved to be the highlight of 2020 so far, with a combined penalty of nearly $4 billion allocated among the DOJ, the State Department, the French PNF, and the UK's SFO has already brought yearly aggregate corporate penalties to a new record high. As we explain in this mid-year Trends & Patterns, among the highlights from 2020 were: • COVID-19-related compliance challenges and the potential for increased corruption risks; • six corporate enforcement actions, with total sanctions of approximately $4.35 billion, making the first half of 2020 a record year in terms of level of FCPA enforcement penalties— with six months still to come. Although the total penalties in the first half of 2020 were significantly higher than previous years ($2.908 billion in the whole year of 2018 and $2.904 billion in 2019), the penalties were unevenly spread across enforcement actions; • a median corporate sanction of $24.5 million, which is in line with the median from last year of $20.6 million; • two major judicial challenges to the DOJ's individual enforcement efforts, in United States v. Baptiste & Boncy and United States v. Hoskins, both leading to the reversal of FCPA- related jury convictions; • several notable updates to private litigation claims arising in the aftermath of an FCPA investigation, including restitution claims, securities fraud claims, and RICO claims; • as in recent years, the DOJ continued its trend of updating its enforcement policies, announcing updates to the Evaluation of Corporate Compliance Programs guidance; the SFO similarly issued guidance on how it will evaluate compliance programs moving forward; • record rewards issued under the SEC's whistleblower program; • a Supreme Court ruling permitting but limiting SEC's disgorgement powers; and • new guidance by the French government on requirements for issuance of its Convention Judiciaire d'Intérêt Public settlement agreement.