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The number of Foreign Corrupt Practices Act (FCPA)-related actions the SEC and U.S. Department of Justice (DOJ) reported in 2024 reflects that these cases remain a priority for both agencies. However, DOJ took the lead over the SEC this year in FCPA enforcement actions filed. Moreover, the SEC reported fewer enforcement actions filed in fiscal year (FY) 2024 than in FY 2023. In this fifth installment of Season's Readings, we take a look at both DOJ and SEC enforcement efforts, which amount to more enforcement action overall and increased risk of criminal liability for companies.

FCPA Authority

The SEC and DOJ both have the authority to enforce FCPA-related violations. The SEC can bring civil enforcement actions against companies that have securities listed on U.S. exchanges or are otherwise required to file periodic reports with the SEC, both for bribery of foreign officials, as well as for books and records and internal controls violations. DOJ has overlapping jurisdiction to enforce the FCPA civilly. However, only DOJ can bring a criminal prosecution against companies who violate the FCPA, regardless of whether the companies are publicly traded or report to the SEC. The two agencies refer matters to each other and often collaborate while conducting parallel investigations. Therefore, anyone looking to adequately analyze FCPA trends must consider SEC- and DOJ-related enforcement actions together.

FY 2024 Stats

Although total SEC enforcement actions have declined this year, DOJ enforcement rose significantly in 2024 as compared to 2023. The SEC reported only two FCPA-related enforcement actions filed in FY 2024 compared to 11 in FY 2023. Since the end of FY 2023, from October 2024 to date, the SEC increased enforcement by filing four new FCPA-related enforcement actions. In total, the SEC has filed six enforcement actions in calendar year 2024. In comparison, to date, DOJ has reported 23 FCPA-related actions filed in calendar year 2024, a meaningful increase from 17 FCPA-related enforcement actions in 2023.

DOJ's Increased FCPA Focus

The number of FCPA-related actions filed is not the only indicator of DOJ's increased efforts on FCPA enforcement in 2024. In the last year, DOJ has announced a number of new whistleblower policies that specifically cover FCPA violations. As we have discussed, on Aug. 1, 2024, DOJ's Criminal Division launched the DOJ Corporate Whistleblower Awards Pilot Program. Several U.S. Attorney's Offices throughout the country have also implemented their own new whistleblower pilot programs this year. These programs provide incentives to whistleblowers in exchange for information to assist law enforcement and federal prosecutors. The DOJ Criminal Division's Corporate Whistleblower Program is a three-year initiative managed by the Criminal Division's Money Laundering and Asset Recovery Section that covers four subject areas, including "violations related to foreign corruption and bribery by, through, or related to companies, including violations of the FCPA and violations of the Foreign Extortion Prevention Act (FEPA), and violations of the money laundering statutes."

DOJ and the SEC, along with other government authorities, have long relied on whistleblowers in their enforcement efforts. DOJ's False Claims Act qui tam program "incentivizes whistleblowers to report fraud in government programs." The SEC also has a well-established and successful whistleblower program to assist in its civil enforcement efforts that covers FCPA and related violations, as we have covered repeatedly (here, here and here).

What It All Means for Companies

So, why create a new DOJ whistleblower program? According to the DOJ memorandum announcing the Corporate Whistleblower Awards Pilot Program, DOJ has benefited from other whistleblower programs, which have led to important and successful prosecutions. However, other whistleblower programs do not cover all corporate crime. Representatives from DOJ have publicly stated that agency does not wish to duplicate efforts but instead is seeking to fill gaps. DOJ's decision to include FCPA and related violations in the DOJ Corporate Whistleblower Awards Pilot Program is indicative of DOJ's focus on continued FCPA criminal enforcement.

In our view, fewer SEC- and FCPA-related enforcement actions filed in 2024 should not be interpreted to mean that FCPA enforcement is less of a priority for the SEC or that federal government enforcement is declining. FCPA cases can be hard to build and take time to investigate given the international and often multiparty conduct at issue. In fact, a year in review for both the SEC and DOJ denotes steady government FCPA-related enforcement activity and more risk of criminal exposure for companies. Combining SEC and DOJ reports, FCPA-related enforcement actions actually increased slightly from 28 in 2023 to 29 in 2024. Further, adding DOJ's new whistleblower policies to the SEC's already existing whistleblower program only raises the potential for the reporting of FCPA violations going forward. Adding more law enforcement and prosecution resources to evaluating whistleblower complaints related to FCPA violations is a force multiplier that may lead to more referrals and sharing of information between the two agencies. Finally, DOJ taking the lead in FCPA enforcement actions, and enhancing its criminal enforcement efforts in 2024 signifies a higher risk of criminal liability. Importantly, DOJ decisions to decline prosecution in an FCPA-related matter do not necessarily end government scrutiny and instead often lead to civil settlement with DOJ or the SEC.