Two recent federal court cases provide additional insight into FCPA enforcement. In SEC v. Straub, the potential cross-border and long-lasting reach of the FCPA was made plain. The SEC filed charges against executives at Deutsche Telekom's subsidiary, Magyar. The U.S. District Court for the Southern District of New York held it had personal jurisdiction over the executives, even though they were not U.S. residents, because they allegedly engaged in conduct designed to violate U.S. law, Magyar and Deutsche Telekom list securities on the NYSE, and both companies file with the SEC. The statute or limitations did not run because defendants were not present in the U.S. Moreover, the defendants' use of emails provided the predicate for interstate commerce. Although the emails originated and terminated outside the U.S., they were routed through the U.S.; the fact that defendants may not have known that, was immaterial.
The limit of the SEC's FCPA reach, however, was outlined by a different Southern District of New York judge. In SEC v. Sharef, the SEC brought FCPA charges against foreign former executives who allegedly participated in a scheme to bribe Argentine government officials. One defendant, Herbert Steffen, sought dismissal for lack of personal jurisdiction. Granting the motion, the Court held that Steffen's actions were too attenuated to establish minimum contacts. Steffen may have urged the payment of bribes but the bribery did not occur until a co-defendant received authority from superiors. And Steffen did not participate in the cover-up. Jurisdiction over foreign defendants based on SEC filings has its limits, concluded the Court.