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Harry Cassin
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Top Ten Disgorgements

There’s been a lot of talk lately about the DOJ’s “expansive enforcement practices” and practically none about the SEC’s. So let’s get started by taking a look at a remedy the SEC now uses in most FCPA cases: disgorgement.

As one commentator said a couple of years ago, disgorgement was never mentioned when the FCPA was first debated and adopted in 1977, nor when Congress amended the law in 1988 or 1998. In fact, as of 1977, the SEC had barely used disgorgement in any type of securities enforcement actions, and 27 years passed before disgorgement popped up in an FCPA case.

That was in 2004 when ABB Ltd disgorged $5.9 million to settle civil antibribery, books-and-records, and internal-controls offenses. Since then the SEC has used disgorgement in about three-quarters of its FCPA-related enforcement actions.

Here are the SEC’s top ten FCPA-related disgorgements (including prejudgment interest):

1. Siemens $350 million in 2008.

2. KBR $177 million in 2009.

3. Snamprogetti $125 million in 2010.

4. Technip $98 million in 2010.

5. Daimler $91.4 million in 2010.

6. Alcatel-Lucent $45 million in 2010.

7. Chevron $25 million in 2007.

8. Pride $23.5 million in 2010.

9. GE $22.5 million in 2010.

10. Baker Hughes $23 million in 2007.

If we’ve missed any cases that should appear in this initial list, please let us know.

For comparison, take a look at our current list of the top ten FCPA enforcement actions of all time.

The cheesiest disgorgement of all time? SEC v. Tyco Int’l. Ltd., a 2006 case. For numerous charges including fraud by inflating its operating income by $567 million, and antibribery violations under the FCPA for payments to government officials in Brazil, the company paid a $50 million penalty and a $1 million disgorgement.

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Our thanks to a reader in D.C. who helped research this post.

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