Document Type

Article

Publication Date

2012

Comments

In recent years, as both the Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) have stepped up their enforcement efforts, the Foreign Corrupt Practices Act (FCPA) has been the subject of harsh criticism. Although critics have identified a variety offlaws in both the law and its enforcement, no one has seriously questioned a basic policy choice: why an agency whose mission is to protect investors is charged with civil enforcement of the FCPA's anti-bribery provisions. Congress conferred this authority on the SEC in 1977 despite the SEC's statements that it did not fit within its mission. For over twenty years, the SEC brought few actions involving allegations of foreign bribery and supported congressional efforts to consolidate enforcement in DOJ. By contrast, the SEC began to enforce the FCPA in the early 2000s with increasing enthusiasm. It has set up a specialized unit and publicized its large settlements, without ever providing an explanation of how enforcing the foreign bribery provision relates to the SEC's mission "to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation. "

I first review the legislative history, the "quiet" years prior to the early 2000s, and the SEC's aggressive enforcement since then. Next I review academic literature, first, to see if there is a theory to explain the SEC s behavior and, second, to explore the problems of multi-goal agencies. My central argument is that, since combating global corruption is not part of the SEC's mission, enforcement of the FCPA should be consolidated in DOJ. Finally, in Dodd- Frank § 1502 (conflict minerals reporting requirement), Congress made the same mistake: it gave the SEC a power that it does not want and that diverts scarce resources from its core mission.

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