Self-Reporting Needed for DPA-NPA in FCPA Cases: Ceresney

Securities Law Daily provides daily coverage of developments in the regulation of federal, state, and international securities and futures trading, with objective coverage of the...

By Phyllis Diamond

Nov. 17 — Companies that are hoping to persuade prosecutors to recommend deferred or non prosecution treatment for Foreign Corrupt Practice Act violations must report their misconduct to the Securities and Exchange Commission, Enforcement Division director Andrew Ceresney said Nov. 17.

He said he hopes the new approach will prompt firms to quickly report FCPA missteps and underscore the benefits of cooperation and self-reporting.

In an address to an American Conference Institute gathering, Ceresney said that in fiscal 2015 alone, the commission gave significant cooperation credit in more than half a dozen cases. “These cases should send the message loud and clear that the SEC will reward self-reporting and cooperation with significant benefits,” Ceresney stated.

Carrot, Stick

According to Ceresney, self-reporting is critical to the success of the agency's cooperation program, as well as a key tool for maximizing the benefits available for cooperation. Such benefits could include reduced charges and penalties, deferred or non-prosecution agreements, “or in certain instances when the violations are minimal, no charges.”

However, he noted, beyond these benefits, there also is a stick that should incentivize self-reporting. Companies that decide not to self-report misconduct risk having the Enforcement Division learn of the wrongdoing through other means, such as through the agency's whistle-blower bounty program.

“If the Enforcement Division finds the violations through its own investigation or from a whistleblower, the consequences to the company will likely be worse and the opportunity to earn additional cooperation credit may well be lost,” Ceresney warned.

In other remarks, Ceresney commented that bribes “come in many shapes and sizes.” In his view, the FCPA encompasses the provision of valuable favors to a foreign official, as well as cash, tangible gifts, travel or entertainment.

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

To contact the editor responsible for this story: Susan Jenkins at sjenkins@bna.com

For More Information 
To see the text of Ceresney's prepared remarks, go to http://www.sec.gov/news/speech/ceresney-fcpa-keynote-11-17-15.html.