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Final count for 2012 declinations

In the prior post, I explained why a broad definition of 'declinations' is needed to overcome a lack transparency by the DOJ and SEC when tracking agency decisions conclude FCPA investigations without pursuing enforcement actions.

Using that broader definition of the term, 2012 saw a notable increase in the number known declinations by the DOJ, while the number of known declinations by the SEC kept pace with levels from 2010 and 2011.

Here's an overview of known declinations since 2008 from Miller & Chevalier’s FCPA Winter Review 2013:

Whether the overall uptick is due to an actual increase in declinations by the agencies or simply more declination decisions being disclosed—either by the agencies or the companies involved—is unclear. 

Dick Cassin recently published a list of the companies known to have received declinations from either one or both agencies in 2012.  To this list, we would add Allianz SE (DOJ), Wyeth LLC (DOJ), ERHC Energy Inc. (DOJ and SEC), and an additional company receiving an SEC declination that, for confidentiality reasons, we cannot identify.  Note that Allianz and Wyeth were the subject of enforcement actions by the SEC.

One additional trend worth noting is a crack in the agencies long-standing practice of neither acknowledging nor explaining their declination decisions. In addition to the “anonymized” declination decisions the agencies included in the recently issued FCPA Guidance, the DOJ also explicitly attributed declination decisions in at least four instances to the companies’ self-reporting, cooperation, and/or remediation (see chart below).  Given the inconsistency with which such explanations have been offered, however, it remains to be seen whether the examples outlined below are simply anomalies or a represent a pattern of increased transparency by the agencies. 


Reasons Given for Declination

Public Agency Announcement?

Morgan Stanley

"[C]onsidering... Morgan Stanley constructed and maintained a system of internal controls, which provided reasonable assurances that its employees were not bribing government officials, the [DOJ] declined to bring any enforcement action against Morgan Stanley related to Peterson's conduct. The company voluntarily disclosed this matter and has cooperated throughout the department's investigation."

Yes (April 25, 2012 DOJ Press Release)

Hercules Offshore Inc.

"The DOJ... terminated its investigation...'based on a number of factors, including... the thorough investigation undertaken by Hercules and the steps that Hercules has taken in the past and continues to take to enhance its compliance program, including efforts to ensure compliance with the FCPA.'"

No (8-K filed August 7, 2012)

Wyeth LLC (Pfizer Inc.)

"In 18 months following its acquisition of Wyeth, Pfizer Inc., in consultation with the department, conducted a due diligence and investigative review of the Wyeth business operations and integrated Pfizer Inc.'s internal control system into the former Wyeth business entities. The department considered these extensive efforts and [Wyeth’s] SEC resolution in its determination not to pursue a criminal resolution for the pre-acquisition improper conduct of Wyeth subsidiaries."

Yes (August 7, 2012 DOJ Press Release)

Academi LLC

“We have taken this step [of closing our inquiry] based on a number of factors, including... the investigation undertaken by Academi and the steps taken by the company to enhance its anticorruption compliance program."

No (August 15, 2012 WSJ article quoting the DOJ’s letter to Academi)



Marc Alain Bohn is a contributing editor of the FCPA Blog and an editor of Miller & Chevalier's FCPA Winter Review 2013.

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