The U.S. Department of Justice (“DoJ”) completed a banner year in terms of settlements with companies, collecting some $9 bn through 35 agreements during 2012. Two of the settlements with financial services companies were for more than one bn dollars each: HSBC Bank USA, N.A. and HSBC Holdings, at $1.9 bn for money laundering, and UBS AG, at $1.5 bn for fraud. The settlements were all in the forms of non-prosecution agreements and deferred-prosecution agreements; we addressed the SEC’s use of such agreements in Enforcement Watch 6 (SEC to step up use of Deferred Prosecution Agreements). More information is available here.
The U.S. Securities and Exchange Commission (“SEC”) also had a successful year in enforcement actions, bringing 734 actions and obtaining orders for $3.1 bn in penalties and disgorgement. Fifty-eight of the enforcement actions were for insider trading, while 29 related to the recent financial crisis. More information is available here.
The DoJ’s and SEC’s banner success is directly proportional to their use of deferred- and non-prosecution agreements. We expect the use of such cooperative agreements to continue at both agencies, even though they undoubtedly will be used in connection with large putative civil and/or criminal penalties.