Issue link: https://digital.shearman.com/i/1389983
1 EXECUTIVE SUMMARY/INTRODUCTION In the first half of 2021, the overall number of corporate enforcement actions dropped significantly from recent years, with only two combined actions brought by the DOJ and SEC. The number of individual enforcement actions dropped slightly as well, with thirteen individuals charged or indictments unsealed in the first half of 2021. As a benchmark, U.S. officials brought nineteen corporate enforcement actions in the last six months of 2020 and charged (or unsealed charges against) twenty individuals. This year provides a significant departure from past enforcement trends, due perhaps to the lingering impact of the coronavirus outbreak and, likely more importantly, a change in administration. Since the inauguration of President Biden, the DOJ and SEC have brought only one corporate enforcement action. In that same time period, the SEC filed no actions against individuals, while the DOJ announced charges against thirteen individuals in five separate enforcement actions. Whether FCPA enforcement actions resume their normal frequency in the second half of 2021 remains to be seen; for the moment, a dearth of publicly announced FCPA cases may presage the release of a slew of prepared indictments and charges—or it may indicate that last year's cases emptied the pipeline and the DOJ and the SEC are recharging. Thus, while Daniel Kahn, who was recently promoted to acting deputy assistant attorney general for the DOJ's Criminal Division, noted in March that the agency's pipeline of cases has never been stronger, such sweeping statements are not altogether uncommon for DOJ officials in his position to make and the proof will be, as they say, in the pudding. One way or the other, however, it does appear that with the waning of the pandemic there may well be a resurgence in new investigations at least; in the first six months of 2021, at least ten major companies announced publicly that they were under investigation by the DOJ or SEC for possible violations of the FCPA. After a record year of FCPA enforcement in 2020, in which the DOJ and SEC assessed more than $8.2 billion in penalties against corporate entities—albeit mostly from two enforcement actions, 2021 has gotten off to a slow start—although, again, that was also true last year. U.S. enforcement agencies have assessed only $164 million in corporate penalties this year—the lowest in a six month period since 2015. As we explain in this mid-year Trends & Patterns, among the highlights from the first half of 2021 were: • a change in presidential administration, coupled with public emphasis by the new Biden administration on increased anti-corruption enforcement; • two combined DOJ and SEC corporate enforcement actions with total sanctions of approximately $164 million, the lowest amount in a six-month period since 2015; • several notable updates to private and follow-on litigation claims arising in the aftermath of an FCPA investigation, including restitution claims, securities fraud claims, and RICO claims; • a record FCPA-related reward issued under the SEC's whistleblower program in connection with Panasonic's 2018 bribery resolution with the SEC and DOJ; • a number of individual indictments that allege misconduct under the FCPA, but the charges filed against the individuals involved are limited to conspiracy to commit money laundering counts; and • a slowdown of publicly announced corruption investigations and charges by the SFO in the U.K., with the last such announcement in November 2020.