US Department of Justice
The US Department of Justice (DoJ) Fraud Section investigates and prosecutes breaches of the US Foreign Corrupt Practices Act 1977 (FCPA), amongst other things.
The FCPA applies to all US persons and certain foreign issuers of securities, as well as to foreign firms and persons who cause, directly or through agents, an act in furtherance of a corrupt payment to take place within the territory of the US.
Companies whose securities are listed in the US separately fall under the remit of the US Securities and Exchange Commission (see below) and are also required to meet the FCPA’s accounting provisions, which were designed to operate in tandem with the anti-bribery provisions of the FCPA. In particular, they require corporations covered by the provisions to: (a) make and keep books and records that accurately and fairly reflect the transactions of the corporation; and (b) devise and maintain an adequate system of internal accounting controls.
Territorially, the FCPA is far-reaching and the DoJ has traditionally been considered more aggressive in its approach to enforcement than the UK or other European prosecuting authorities.
The US does not recognise the “double-jeopardy” rule in relation to prosecutions of overseas persons. Therefore, non-US based companies could face prosecution for the same offences in their own jurisdiction, as well as in the US (if the DoJ can establish jurisdiction and consider it appropriate to take additional or concurrent action in the US). Conversely, in the UK, the double-jeopardy rule would prevent a defendant who had already been tried for an offence in the US being re-prosecuted in the UK, even if the conduct in question was more closely linked to the UK.
US Securities & Exchange Commission
The US Securities & Exchange Commission (SEC) regulates the securities industry within the US. Its aim is to protect investors and maintain fair, orderly and efficient markets. Like the FCA in the UK, part of the SEC’s remit is enforcement action against anyone in breach of securities laws and each year the SEC brings hundreds of civil enforcement actions against individuals and companies for violations. Typical infractions include insider trading, accounting fraud, and providing false or misleading information about securities and the companies that issue them.
Given the overlap in accounting offences, the SEC and DoJ often work together to prosecute and redress wrongdoing.