2012 was another active year in anti-corruption enforcement, with US authorities still leading the pack. While the number of US enforcement actions and aggregate penalties both declined compared to prior years, several noteworthy developments occurred.
In April 2012, US enforcement authorities publicly announced for the first time that they would not pursue charges against an employer on the basis of an oft-suggested "rogue" employee's conduct. While Morgan Stanley Managing Director Garth Peterson's self-dealing and intentional circumvention of the firm's internal controls doubtless factored heavily into the decision, the announcement also provides strong support for investing in a robust corporate anticorruption compliance program.
In November 2012, the Department of Justice and Securities and Exchange Commission unveiled their long-awaited Foreign Corrupt Practices Act (FCPA) Resource Guide. While the Guide largely encapsulates past enforcement policy, it also shows the authorities raising the bar on FCPA compliance expectations in some respects. Detailed and thoughtful in its approach, the Guide is a useful first stop for in-house and outside FCPA practitioners alike.
The FCPA also took center stage with a wider audience in 2012 following front-page New York Times exposés of alleged pervasive bribery and an executive cover-up at Wal-Mart, as well as prime-time news coverage of inquiries into alleged phone hacking and bribery within Rupert Murdoch's media empire. While investigations into both matters are ongoing, the scandals caused FCPA issues to reverberate in Board and corporate C-suites around the world and also captured the attention of the public at large.
On the enforcement front, 2012 saw a number of high-dollar corporate settlements, including several resulting from an industry sweep in the pharmaceutical and medical device sectors. Enforcement authorities faced a further series of prosecutorial setbacks in cases against individual defendants, and are currently beating back challenges to their sweeping jurisdictional theories and other statutory interpretations in pending cases. These and other judicial developments, including in the context of private litigation against corporate officers and directors arising out of FCPA violations, will be worth watching in 2013.
At the same time, anticorruption initiatives are gaining momentum outside the United States as well. World Bank enforcement remains strong, and a number of other national authorities have pushed ahead with both new legislation and additional enforcement activity. International enforcement efforts likely will continue to develop and become increasingly interconnected in 2013.
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