Page 86 - U.S. FOREIGN CORRUPT PRACTICES ACT

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

Administrative proceedings provide for a If the agreement is violated during the period of
variety of relief. For regulated persons and entities, deferred prosecution, SEC staff may recommend
such as broker-dealers and investment advisers and an enforcement action to the Commission
persons associated with them, sanctions include against the individual or company for the original
censure, limitation on activities, suspension of misconduct as well as any additional misconduct.

up to twelve months, and bar from association or Furthermore, if the Commission authorizes the
revocation of registration. For professionals such enforcement action, SEC staff may use any factual
as attorneys and accountants, SEC can order in admissions made by the cooperating individual
Rule 102(e) proceedings that the professional be or company in support of a motion for summary
censured, suspended, or barred from appearing judgment, while maintaining the ability to bring an
or practicing before SEC. 409 SEC staff can seek an enforcement action for any additional misconduct

order from an administrative law judge requiring at a later date.
the respondent to cease and desist from any In May of 2011, SEC entered into its first
current or future violations of the securities laws. deferred prosecution agreement against a company
In addition, SEC can obtain disgorgement, pre- for violating the FCPA. 410 In that case, a global
judgment interest, and civil money penalties in manufacturer of steel pipe products violated the

administrative proceedings under Section 21B of FCPA by bribing Uzbekistan government officials
the Exchange Act, and also can order other relief during a bidding process to supply pipelines for
to effect compliance with the federal securities transporting oil and natural gas. The company
laws, such as enhanced remedial measures or the made almost $5 million in profits when it was
retention of an independent compliance consultant subsequently awarded several contracts by the
or monitor. Uzbekistan government. The company discovered

the misconduct during a worldwide review of its
Deferred Prosecution Agreements operations and brought it to the government’s
A deferred prosecution agreement is a attention. In addition to self-reporting, the company

written agreement between SEC and a potential conducted a thorough internal investigation;
cooperating individual or company in which SEC provided complete, real-time cooperation with SEC
agrees to forego an enforcement action against the and DOJ staff; and undertook extensive remediation,
individual or company if the individual or company including enhanced anti-corruption procedures and
agrees to, among other things: (1) cooperate training. Under the terms of the DPA, the company

truthfully and fully in SEC’s investigation and paid $5.4 million in disgorgement and prejudgment
related enforcement actions; (2) enter into a long- interest. The company also paid a $3.5 million
term tolling agreement; (3) comply with express monetary penalty to resolve a criminal investigation
prohibitions and/or undertakings during a period by DOJ through an NPA. 411
of deferred prosecution; and (4) under certain For further information about deferred
circumstances, agree either to admit or not to prosecution agreements, see SEC’s Enforcement

contest underlying facts that SEC could assert to Manual. 412
establish a violation of the federal securities laws.

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