Page 64 - U.S. FOREIGN CORRUPT PRACTICES ACT

A Resource Guide to the U.S. Foreign Corrupt Practices Act. Second Edition.

for certain accounting violations caused by its to pursuing reduced sanctions in connection with
subsidiary, details the many factors SEC considers enforcement actions. Although the evaluation of
in determining whether, and to what extent, it cooperation depends on the specific circumstances,
grants leniency to companies for cooperating in SEC generally evaluates four factors to determine
its investigations and for related good corporate whether, to what extent, and in what manner to

citizenship. Specifically, the report identifies four credit cooperation by individuals:
broad measures of a company’s cooperation:
• the assistance provided by the cooperating
individual in SEC’s investigation or related
• self-policing prior to the discovery of the enforcement actions, including, among
misconduct, including establishing effective other things: the value and timeliness of the
compliance procedures and an appropriate cooperation, including whether the individual
tone at the top;
was the first to report the misconduct to SEC
• self-reporting of misconduct when it is or to offer his or her cooperation; whether
discovered, including conducting a thorough the investigation was initiated based upon
review of the nature, extent, origins, and the information or other cooperation by the
consequences of the misconduct, and individual; the quality of the cooperation,
promptly, completely, and effectively including whether the individual was truthful
disclosing the misconduct to the public, to and the cooperation was complete; the time
regulatory agencies, and to self-regulatory and resources conserved as a result of the
organizations; individual’s cooperation; and the nature of the
• remediation, including dismissing or cooperation, such as the type of assistance
appropriately disciplining wrongdoers, provided;
modifying and improving internal controls • the importance of the matter in which the
and procedures to prevent recurrence of the individual provided cooperation;
misconduct, and appropriately compensating • the societal interest in ensuring that the
those adversely affected; and
cooperating individual is held accountable for
• cooperation with law enforcement authorities, his or her misconduct, including the severity of
including providing SEC staff with all the individual’s misconduct, the culpability of
information relevant to the underlying the individual, and the efforts undertaken by
violations and the company’s remedial efforts. the individual to remediate the harm; and
• the appropriateness of a cooperation credit
Since every enforcement matter is different,
in light of the profile of the cooperating
this analytical framework sets forth general individual.
principles but does not limit SEC’s broad discretion
to evaluate every case individually on its own Corporate Compliance Program
unique facts and circumstances. Similar to SEC’s In a global marketplace, an effective

treatment of cooperating individuals, credit for compliance program reinforces a company’s
cooperation by companies may range from taking internal controls and is essential to detecting
no enforcement action to pursuing reduced and preventing FCPA violations. 316 Effective
sanctions in connection with enforcement actions. compliance programs are tailored to the company’s
specific business and to the risks associated with
SEC’s Framework for Evaluating Cooperation by that business. They are dynamic and evolve as the

Individuals business and the markets change.
In 2010, SEC announced a new cooperation An effective compliance program promotes
program for individuals. 315 SEC staff has a wide “an organizational culture that encourages ethical
range of tools to facilitate and reward cooperation conduct and a commitment to compliance with
by individuals, from taking no enforcement action the law.” 317 Such a program protects a company’s

56