Robert Khuzami, the SEC’s Director of the Division of Enforcement, spoke this week to the New York City Bar Association (see here for text of his speech).
During his speech, Khuzami announced that the SEC will be creating five “national specialized units dedicated to particular highly specialized and complex areas of securities law.”
One of the units will be an FCPA unit. Here is what Khuzami had to say:
“The Foreign Corrupt Practices Act unit will focus on new and proactive approaches to identifying violations of the Foreign Corrupt Practice Act, which prohibits U.S. companies from bribing foreign officials for government contracts and other business. While we have been active in this area, more needs to be done, including being more proactive in investigations, working more closely with our foreign counterparts, and taking a more global approach to these violations.”
Unlike the DOJ which has historically centralized all FCPA prosecutions at “main Justice” in DC, the SEC has traditionally given its regional offices the authority to independently prosecute FCPA cases. With Khuzami’s announcement, change appears to be in the works and it will be interesting to see whether this new approach will yield any noticeable differences in SEC prosecution of FCPA offenses.
During the speech, Khuzami also announced that the SEC is working on other “initiatives” – two of which I highlight as being of particular interest to FCPA followers.
First, the SEC is seeking to create a “Seaboard” for individuals, “a public policy statement that will set forth standards to evaluate cooperation by individuals in enforcement actions” as Khuzami explained. All SEC enforcement lawyers have committed to memory the original “Seaboard Report” (see here) – the factors the SEC will consider when deciding whether to pursue a corporate enforcement action – and it appears that additional required reading may soon be available.
Second, and seemingly taking a page from the DOJ’s FCPA playbook, Khuzami announced that the Division of Enforcement “will be prepared to recommend to the Commission that the SEC enter into Deferred Prosecution Agreements, in which [Division of Enforcement] agree[s] in the appropriate case to forego an enforcement action against an individual or entity subject to certain terms, including full cooperation, a waiver of statutes of limitations, and compliance with certain undertakings.”
“New and proactive” enforcement … “more needs to be done” … future SEC deferred prosecution agreements … these are sure interesting times to be following the FCPA!