As part of initiatives to encourage greater cooperation in enforcement investigations, the SEC has entered into its first deferred prosecution agreement with a public company. The public company allegedly bribed foreign government officials to obtain contracts which resulted in profits of nearly $5 million. The public company self-reported to the SEC and the Department of Justice, and otherwise cooperated with the federal government.
The SEC found the public company to be an "appropriate candidate" for the SEC's first deferred prosecution agreement. In support of this finding, the SEC made note of the public company's "immediate self-reporting, thorough internal investigation, full cooperation with SEC staff, enhanced anti-corruption procedures, and enhanced training." The SEC further noted that the public company's response "demonstrated high levels of corporate accountability and cooperation."
Under the deferred prosecution agreement, the SEC will refrain from bringing civil charges against the public company, provided that the public company complies with its obligations under the agreement. Among other things, the public company has agreed to enhance its policies, procedures and controls to strengthen compliance with anti-corruption practices. The public company also agreed to implement due diligence requirements related to the retention and payment of agents. In connection with its entry into the deferred persecution agreement, the public company agreed to pay $5.4 million in disgorgement and prejudgment interest and a $3.5 million criminal penalty.
SEC Press Rel. No. 2011-112 (May 17, 2011).