Top Ten International Anti-Corruption Developments For June 2017

In order to provide an overview for busy in-house counsel and compliance professionals, we summarize below some of the most important international anti-corruption developments from the past month, with links to primary resources. This month we ask: How will the Supreme Court's limitation on the U.S. Securities and Exchange Commission's (SEC) disgorgement authority influence FCPA enforcement? Will the U.S. Department of Justice (DOJ) continue to seek "declinations with disgorgement?" What is the latest sector to fall under the microscope in China's ongoing anti-anticorruption campaign? The answers to these questions and more are here in our June 2017 Top Ten list.

1. Personnel Moves at DOJ's Fraud Section.

   DOJ Compliance Counsel Departs Ahead of Schedule. In November 2015, DOJ announced that it had selected Hui Chen, formerly head of Standard Chartered's anti-bribery and corruption compliance, for the newly created role of compliance counsel. The appointment was intended to assist prosecutors in assessing a company's compliance program, particularly when determining the sufficiency of any remediation. Chen's influence was seen publicly in the FCPA Pilot Program, issued by the Fraud Section in April 2016, and in the "Evaluation of Corporate Compliance Programs," issued by the Fraud Section in February 2017, and she became a fixture at Filip Factors presentations and other compliance-related meetings at the Fraud Section. Chen's contract was set to run until September 2017, but in early June 2017, DOJ began advertising for the position. Later in the month, it was announced that Chen had left her position as of June 23, 2017. Following her resignation, Chen posted a statement explaining that her decision was based on disagreements and concerns with the Trump Administration, the prohibition on her public speaking on compliance issues imposed by DOJ, and the limitations the Hatch Act would impose on her ability to be politically active. The addition of a compliance expert was seen by most observers as a positive development at the Fraud Section, and it is welcome news that DOJ appears intent on continuing the role in the future. Changes in Leadership Positions at DOJ's FCPA Unit. In June 2017, Laura Perkins, an assistant chief in DOJ's FCPA Unit for several years, departed the Fraud Section for private practice. As we discussed in last month's Top Ten, FCPA Unit Assistant Chief Albert "B.J." Stieglitz is expected to depart for a two-year detail to the United Kingdom in the near future. Meanwhile, the Fraud Section has hired two new FCPA assistant chiefs in 2017: David Johnson, a veteran of the D.C. U.S. Attorney's Office and SEC who tried a securities fraud case with FCPA Unit Deputy Chief Dan Kahn in 2014, and Chris Cestaro, who transferred to the FCPA Unit in 2014 following a successful run in the Fraud Section's Health Care Fraud Unit. While Perkins and Stieglitz's expertise will be missed by the close-knit FCPA Unit, the unit has added two more talented prosecutors in Johnson and Cestaro to the management ranks. 2. U.S. Supreme Court Limits SEC's Ability to Obtain Disgorgement. On June 6, 2017, in Kokesh v. SEC, the U.S. Supreme Court unanimously held that SEC's ability to disgorge allegedly ill-gotten gains from defendants was subject to the five-year statute of limitation set out in 28 U.S.C. § 2462 for suits brought by the government to enforce "any civil fine, penalty, or forfeiture." The court held that disgorgement...