Throughout the week over at Securities Docket I highlight the most interesting columns and blog posts from around the web on the subjects of SEC enforcement and securities litigation. Here is a digest of my picks for the week ending March 23.
What Percentage of DOJ FCPA Losses is Acceptable?
Mike Koehler, The Criminal Law Reporter
While it is unrealistic (and probably not desirable from a policy perspective) to expect the Justice Department to win 100 percent of its Foreign Corrupt Practices Act prosecutions against individuals when put to its burden of proof, given the above referenced dynamics, it is realistic (and desirable from a policy perspective) to expect the department to win a very high percentage of its FCPA prosecution against individuals….
How to stop the Whac-a-Mole of insider trading
Robert Boxwell and Maeen Shaban, The Great Debate
This raises the question – what percentage of DOJ FCPA losses is acceptable? To borrow from Justice Potter Stewart's classic reasoning in Jacobellis v. Ohio, I don't know what level of DOJ FCPA losses is acceptable and the answer may be indefinable. But I know it when I see it, and the number and magnitude of DOJ's recent FCPA losses is unacceptable.
Preet Bharara's work rooting out insider trading is good news for U.S. investors, as long as you're not one of the 240 people being investigated. But until governments tackle insider trading on a global basis, it's like playing Whac-A-Mole. If your business model includes insider trading, you can pop up in Hong Kong or London almost as easily as Tokyo and Shanghai without much fear of prosecution.
Here We Go Again: Back-To-Back Compliance Monitors For Smith & Nephew
C.M. Matthews, WSJ Corruption Currents
“Corporate compliance monitor” — it's phrase that sends shivers down the spines of most chief executives. What's worse than opening the books, marketing practices and internal controls to an outsider to whom you may pay millions of dollars, with the knowledge that this monitor is beholden to the U.S. government? Doing it twice.
Are you a Supervisor?
Doug Cornelius, Compliance Building
As a compliance officer, how far do you need to go in dealing with a problem employee? The Urban case was trying to address this question, but got twisted up in procedural machinations. In dropping the case, the two SEC commissioners didn't explain when a compliance officer or in-house counsel at a broker-dealer or investment adviser becomes a supervisor liable for an employee's actions….
… The final decision by the SEC leaves it murky as to whether that position by the Enforcement Division is the position of the Commissioners. If you can't get a compliance problem fixed what should you do?