Tagged: compliance program

What Does Increased Regulatory Enforcement Look Like?

“We recognize the issue of costs to companies to implement robust compliance programs . . . the cost of not being FCPA compliant however can and will be much, much higher.”

Lanny A. Breuer, the assistant attorney general of the DOJ’s criminal division

It seems like everyone with an axe to grind in the information governance world – including yours truly – likes to salt every presentation and whitepaper with the apparent axiom that we are in an era of increasing regulation.

Other than listing a bunch of new-ish laws and proposed laws, it is often hard to quantify what increased regulation looks like. Recently, though, I came across some interesting facts in a speech from an official from the Department of Justice (DOJ), that do just that.[1. You can find the transcript of the speech linked from this WSJ blog post.]  The speech concerns enforcement of the Foreign Corrupt Practice Act (FCPA), a federal law that has been on the books since the 70s and in essence criminalizes bribery of foreign officials by American companies and individuals.

In the past few years, the DOJ has recently focused on aggressively enforcing the FCPA, and the result has been:

  • A record number of trials
  • A record number of individuals charged with violations (” . . . prosecution of individuals is a cornerstone of our enforcement strategy.”)
  • Record corporate fines, including one of $1.6 billion and another of $579 million
  • More enforcement actions between 2005 and 2009 than in the previous 30 years

This is what increased regulatory enforcement looks like. Very respected and senior individuals have gone to jail, name-brand companies have paid millions in fines, and many more individuals and companies have plead guilty to avoid the pain and spectacle of a prolonged investigation or trial.

So, is compliance getting tougher? Factually, in the FCPA world, the answer is clearly yes. However, I think these facts also help to support the larger case that the business operating environment is getting more regulated, and the era of a “compliance program” consisting of a few dusty binders sitting on a shelf are over.

What do you think?