After a company self discloses possible FCPA violations, or hears from the DOJ or SEC first, there are only two possible outcomes — an enforcement action or a declination (no action by the DOJ or SEC).
How often do declinations happen?
No one knows. The DOJ and SEC don’t reveal anything about them. Companies can disclose declinations and some do. But an unknown number do not.
No one talks much about declinations. There’s not much to say when it all happens in the dark.
We know. It’s frustrating.
But a couple of DC lawyers have just let in a little light.
Writing in this month’s edition of Bloomberg’s Corporate Counsel Law Report, James Tillen and Marc Alain Bohn (an important visitor to the FCPA Blog from time to time) looked at declinations.
Here’s part of their firm’s summary of the article:
[Although declinations] might reflect an insufficiency of evidence, the absence of jurisdiction, or a lack of actionable misconduct, they can also represent the clearest evidence of benefit from a voluntary self-disclosure or from extraordinary cooperation. Therefore, any determination of whether to voluntarily self-disclose a potential violation or cooperate fully with enforcement authorities in an investigation is incomplete without including the recent spike in declinations in the analysis of what, strategically, is in the company’s best interest. . . .
From the article is this graph (reprinted here with the authors’ permission), showing the number of known declinations since 2008.
The full article, high on our recommended reading list, can be downloaded here.
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