Deputy Assistant Attorney General Sung-Hee Suh Speaks at the PLI’s 14th Annual Institute on Securities Regulation in Europe: Implications for U.S. Law on EU Practice
Remarks As Prepared for Delivery
Thank you, Rob, for that kind introduction. I am honored to be invited to speak on this panel with esteemed colleagues from the SEC, FCA, SFO, and the private sector.
As brief background, I am a Deputy Assistant Attorney General in the Department of Justice’s Criminal Division. I oversee several sections, but most relevant to my remarks today is the Fraud Section, which has principal responsibility for the prosecution of complex securities and other white-collar matters for the Criminal Division.
I would like to speak briefly this morning about the Criminal Division’s white-collar criminal enforcement priorities now and in the coming year.
We are focused on fighting corruption, cyber crime, and financial fraud, all of which present unique dangers to American citizens, as well as individuals overseas.
We are prioritizing the fight against financial fraud of all stripes—particularly at publicly traded corporations and large financial institutions—and we will follow the evidence of fraud wherever it leads, be that within or outside U.S. borders.
The prosecution of individuals—including corporate executives—for criminal wrongdoing continues to be a high priority for the department. That is not to say that we will be looking to charge individuals to the exclusion of corporations.
However, corporations do not act criminally, but for the actions of individuals. And, the Criminal Division intends to prosecute those individuals, whether they are sitting on a sales desk or in a corporate suite.
It is within this framework that we are also seeking to reshape the conversation about corporate cooperation to some extent.
Corporations too often overlook a key consideration that the department has long expressed in our Principles of Federal Prosecution, which guide our prosecutorial decisions: That is a corporation’s willingness to cooperate in the investigation of its culpable executives.
Of course, corporations—like individuals—are not required to cooperate. A corporation may make a business or strategic decision not to cooperate. However, if a corporation does elect to cooperate with the department, it should be mindful of the fact that the department does not view voluntary disclosure as true cooperation, if the company avoids identifying the individuals who are criminally responsible for the corporate misconduct.
Even the identification of culpable individuals is not true cooperation, if the company intentionally fails to locate and provide facts and evidence at their disposal that implicate those individuals. The Criminal Division will be looking long and hard at corporations who purport to cooperate, but fail to provide timely and full information about the criminal misconduct of their executives.
In the past year, the Criminal Division has demonstrated its continued commitment to the prosecution of individual wrongdoers in the corporate context. I will highlight a few examples.
On the FCPA front, since 2009, we have convicted 50 individuals in FCPA and FCPA-related cases, and resolved criminal cases against 59 companies with penalties and forfeiture of almost $4 billion. Within the last two years alone, we have charged, resolved by plea, or unsealed cases against 26 individuals, and 14 corporations have resolved FCPA violations with combined penalties and forfeiture of more than $1.6 billion.
As just one example, the department unsealed charges against the former co-CEOs and general counsel of PetroTiger Ltd., a BVI oil and gas company with offices in New Jersey, for allegedly paying bribes to an official in Colombia in exchange for assistance in securing approval for an oil services contract worth $39 million.
The general counsel and one of the CEOs already pleaded guilty to bribery and fraud charges, and the other former CEO is headed for trial.
This case was brought to the attention of the department through voluntary disclosure by PetroTiger, which cooperated with the department’s investigation. Notably, no charges of any kind were filed against PetroTiger.
An example on the flip side is the Alstom case, an FCPA investigation stemming from a widespread scheme involving tens of millions of dollars in bribes spanning the globe, including Indonesia, Saudi Arabia, Egypt, and the Bahamas.
When the Criminal Division learned of the misconduct and launched an investigation, Alstom opted not to cooperate at the outset. What ensued was an extensive multi-tool investigation involving recordings, interviews, subpoenas, MLAT requests, the use of cooperating witnesses, and more.
As of today, four individual Alstom executives have been charged; three of them have pleaded guilty; Alstom’s consortium partner, Marubeni, was charged and pleaded guilty; and Alstom pleaded guilty and agreed to pay a record $772 million fine. And that only accounts for the charges in the United States.
As I have said, we want corporations to cooperate, and will provide appropriate incentives. But, we will not rely exclusively upon corporate cooperation to make our cases against the individual wrongdoers.
On the securities and commodities fraud front, protecting the integrity of our global financial markets continues to be a priority for the Criminal Division. Our investigations into the manipulation of the LIBOR and FX at global financial institutions have received substantial publicity.
So far, five banks have resolved the LIBOR investigation with the department, paying more than $1.2 billion to the department alone. And 11 individuals have been charged, two of whom have pleaded guilty. And again, that only accounts for the charges in the United States. We expect both the LIBOR and FX investigations to continue to develop, both against the financial institutions themselves, as well as culpable individual executives.
To do these complex, international investigations, we are increasingly coordinating with domestic and foreign regulators and law enforcement counterparts, some of whom are on this panel today.
In working with our foreign counterparts, we have developed growing sophistication and experience in a variety of areas, including analyzing foreign data privacy laws and corporations’ claims that overseas documents cannot be provided to investigators in the United States.
We are also building and relying upon on our relationships with our foreign counterparts to gather evidence, locate individuals overseas, conduct parallel investigations of similar conduct, and, when appropriate, coordinate the timing and scope of resolutions.
Yes, just as we are coordinating our investigations, we are likewise willing to coordinate our resolutions, including accounting for the corporate monetary penalties paid in other jurisdictions when appropriate.
This is all to say that you should expect to see these meaningful, multinational investigations and prosecutions of corporations and individuals to continue.
With that, I am looking forward to hearing the remarks of my fellow panelists and discussing these important issues with you in more detail.