On November 9, 2017, Steven R. Peikin, Co-Director of the SEC’s Division of Enforcement, delivered a keynote speech at a conference commemorating the 40th anniversary of the enactment of the Foreign Corrupt Practices Act (“FCPA”) in which he reflected on “the past, present, and future” of the SEC’s enforcement of the FCPA.
After confirming the SEC’s commitment to robust FCPA enforcement, Peikin noted that a “principal challenge” the SEC is now facing is “the interplay between the length of time it takes to conduct an FCPA investigation and the statute of limitations” imposed by the recent Supreme Court decision in Kokesh v. SEC, 137 S. Ct. 1635 (2017). Specifically, in June 2017, the Supreme Court unanimously held that SEC enforcement actions seeking disgorgement are subject to a five-year statute of limitations. Id. at 1639. Accordingly, in light of Kokesh, the SEC is no longer able to seek disgorgement from defendants for claims that accrue outside of the five-year limitations period.
Although Kokesh is not unique to FCPA matters, Peikin anticipates that the ruling “will have particular significance for [the SEC’s] FCPA cases” for two main reasons. First, it is common practice for the SEC to seek disgorgement in FCPA matters. Second, FCPA investigations are among the most lengthy for the SEC because: (a) “[i]n many instances, by the time a foreign corruption matter hits [the SEC’s] radar, the relevant conduct may already be aged;” and (b) once initiated, FCPA investigations are time-consuming in that they are factually complex and require the collection of evidence from foreign jurisdictions.
Therefore, Peikin declared that the SEC has “no choice but to respond by redoubling [its] efforts to bring cases as quickly as possible” in order to pursue all available remedies. Peikin also expects that the Enforcement Division will continue to work closely with foreign law enforcement and regulators to both maximize efficiencies and to target assets held outside of the United States.
The full text of Peikin’s speech can be found at: https://www.sec.gov/news/speech/speech-peikin-2017-11-09.