SEC Director of Enforcement Andrew Ceresney
International business law enforcement continues to be an important topic of concern. To combat a variety of enforcement problems, federal agencies such as the Securities and Exchange Commission (SEC) have increasingly relied on cooperation with foreign officials to obtain evidence and cooperate in investigations.
To spotlight this issue, the Dennis J. Block Center for the Study of International Business Law Center organized a Breakfast Roundtable with Andrew Ceresney, the SEC’s Director of the Division of Enforcement, on February 28, 2014, at the Down Town Association.
The breakfast, attended by a mix of alumni, faculty, and students, was moderated by Professor Miriam Baer, a noted expert in corporate compliance and white collar crime. Director Ceresney spoke on the role of international cooperation and globalization in SEC enforcement and discussed four key areas in which cooperation with foreign authorities has aided the SEC’s mission: financial reporting and accounting, the Foreign Corrupt Practices Act (FCPA), insider trading, and microcap fraud.
As Director Ceresney explained, cooperation is necessary because complex business – and the investigations they trigger – extends well beyond the United States border. In an increasingly globalized world, no single country can fight securities fraud effectively. In fact, as Director Ceresney relayed, the SEC has requested assistance over 800 times and has received 500 reciprocal requests. Ceresney explained the process for engaging in such cooperation and praised the standard Memorandum of Understanding (MOU) as a framework for countries to share materials and aid each other in their investigations.
International cooperation has greatly contributed to the success of investigations in financial reporting, accounting, and auditing fraud. Director Ceresney pointed out, however, that cooperation with foreign countries can still be challenging, and that the SEC continues to seek progress in this area. Ceresney cited the assistance of the Chinese government in a particular case as a prime example of the progress made in gaining government cooperation in producing documents to aid in investigations.
Similar progress has been made with regards to investigating violations of the FCPA, insider trading, and microcap fraud investigations. For international offenses like these, the SEC faces a number of potential roadblocks in securing evidence, but international cooperation can significantly dismantle those roadblocks. Director Ceresney referenced a number of cases where cooperation with foreign jurisdictions resulted in the Agency bringing an enforcement action, including one involving a Bahamas broker acting as a screen for traders to engage in microcap fraud.
Ceresney ended on a positive note for the future. He emphasized that cooperation with foreign regulators is a vital part of enforcement strategy and that the SEC will continue to look for opportunities to strengthen these efforts.
By Gloria Liu ‘14