FCPA Enforcement Takes a Breather

Neither the SEC nor the DOJ filed a new FCPA Enforcement Action in the second quarter of 2024, which is relatively rare, according to a report from Stanford University's FCPA Clearinghouse.

The last time a quarter passed without a single new enforcement action was in 2013, and before that, in 2003. Enforcement activity in the first six months of the year was the lowest recorded in almost two decades. If the level of enforcement activity seen through the first six months of 2024 continues through the rest of the year, 2024 will mark the fourth consecutive year of enforcement activity that falls well below the ten-year average

The decline in overall enforcement activity since 2020 can be attributed largely - although not exclusively - to a decline in the prosecution of individual defendants. The SEC has not sued an individual since 2020, and the last time the DOJ prosecuted so few individual defendants in the first half of the year was 2011. Collectively, the five companies and individuals charged with FCPA-related offenses this year represent the lowest number of defendants charged in the first six months of any year since 2006, when the DOJ charged two individuals and the SEC charged two companies.

Jarksey

The Stanford report notes that the Supreme Court’s Jarkesy ruling will limit the SEC’s ability to proceed in an administrative forum against alleged wrongdoers, and it could lead to further attacks on administrative proceedings based on grounds not addressed in the ruling. The SEC has brought materially all recent FCPA cases in its administrative tribunals rather than in federal courts.