SEC Anti-Bribery Suits Under Timeliness Challenge, Official Says

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By Phyllis Diamond

Anti-bribery cases under the FCPA often take the longest for the SEC to investigate, putting them at serious risk of a limitations lockout, Enforcement co-Director Steven Peikin said Nov. 9.

In many cases, by the time the agency learns of a foreign corruption matter, the conduct at issue “may already be aged,” Peikin said in a New York University Law School address.

Moreover, Foreign Corrupt Practices Act cases are complex and require collecting evidence from overseas, the enforcement official said. The statute of limitations isn’t tolled for the Securities and Exchange Commission while its foreign evidence requests are outstanding, as it is for the Justice Department, Peikin said.

These timeliness challenges have only increased since the U.S. Supreme Court decided earlier this year in Kokesh v. SEC that claims for disgorgement are subject to a five-year limitations period for penalty actions, he said. Kokesh already has impacted many parts of the enforcement program and is likely to be particularly significant for FCPA matters, in which disgorgement typically is among the remedies sought, Peikin said.

“While the ultimate impact of Kokesh on SEC enforcement as a whole—and FCPA enforcement specifically—remains to be seen, we have no choice but to respond by redoubling our efforts to bring cases as quickly as possible,” the enforcement chief said. “Even irrespective of Kokesh, this approach makes sense because our cases have the highest impact, and our litigation efforts are most effective, when we bring our cases close in time to the alleged wrongful conduct.”

To contact the reporter on this story: Phyllis Diamond in Washington at pdiamond@bna.com

To contact the editor responsible for this story: Seth Stern at sstern@bna.com

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