Key Legal Battles Shaping the SEC’s Enforcement Strategy

Introduction

The Great Depression of 1929 has been one of the highlights of US history. It led to the founding of the SEC, or Securities and Exchange Commission. Since then, it has helped the US economy stay intact and keep the inflation rate in check.

Thus, in the next section, we will discuss the key legal battles shaping the SEC’s enforcement strategy and controlling the US economy. Consequently, you can read the cases and fix compliance issues to make your business more transparent and honest.

Let the discussion begin, especially on SEC’s enforcement struggles this summer.

Legal Battles Shaping the SEC’s Enforcement Strategy

Here are a few key legal battles that shaped the SEC’s Enforcement Strategy

Deere & Company Case

Deere & Company paid 9.9 million USD to the SEC regarding the bribery scheme involving their Thai subsidiary, Wirtgen Thailand. The case happened in 2024 when the SEC found that Wirtgen Thailand had bribed government officials and private companies to attract more business.

The bribes included –

  • Paying cash to the officials
  • Access to Massage parlors
  • Paid for their luxury trips
  • Luxury gifts

This led the SEC to charge the company 9.9 million USD as a penalty, including 5.4 million USD from the profits from the bribes and the remaining 4.4 million USD for civil penalties. Later, Deere relieved the employees involved in the bribing process of their duties. The company has implemented anti-bribery control to keep its business clean and transparent.

Gartner. Inc SEC Case 

In May 2023, Gartner. Inc. settled the case of Foreign Corrupt Practices Act (FCPA) violations in South Africa with the SEC for 2,45 million USD. The SEC discovered that Gartner had gotten involved with poor FCPA practices, including anti-bribery, internal accounting provisions, books, and records.

They arranged the situation with a South African company to get more business from the South African Revenue Service (SARS). While deciphering the case, the SEC found that Gartner had paid bribes to the private company and various government officials. Hence, the settlement was divided into –

  • For civil penalties, the company had to pay 1.6 million USD
  • For prejudgement interest, they had to pay 180,790 USD
  • Lastly, for disgorgement, they had to pay 675,974 USD.

Furthemore, Gartner had to make changes in their policies –

  • Improve their policies and procedures to get business in foreign land
  • Build a more comprehensive training program
  • They must hire more capable compliance officers to review the whole process.
  • Lastly, improve their due diligence.

Oracle Corporation SEC Case

Another one on the list is Oracle Corporation. The IT company with the third-largest revenue was charged with a bribery case in 2013, and the SEC discovered that the company had bribed several officials in India, Turkey, and UAE to get business. The company used slush funds to bribe government officials and gain a stronghold in those countries.

In the review, it was seen that they paid those funds for the travel expenses of the government officials and got business from them. The malpractice took place between 2016 and 2019. In between, Oracle had to pay 2 million USD to SEC for breaching anti-bribery policies. Later, the SEC, seeing the discrepancies in getting business and breaching FCRA principles, fined Oracle Corporation 23 million USD.

Credit Suisse SEC Case

In 2021, Credit Suisse paid the SEC 100 million USD for its antifraud provisions and mishaps in accounting controls and bookkeeping. The company had been known to break the federal securities law, which led to the events of the 2008 financial crisis. Moreover, the company also had been convicted of being involved with cocaine trafficking.

The first case begins with Credit Suisse First Boston LLC, which engaged in spinning activities with hot IPOs. They gave the shares of their technology IPOs to executives of investment banking clients. In addition, Credit Suisse Securities LLC got involved in anti-fraud activities, which led the company to pay over 100 million USD in fines and change its business operations.

Herbalife Nutrition, Ltd. SEC Case

In 2020, Herbalife Nutrition, Ltd. agreed to pay the SEC 55 million USD for breaching FCRA regulations and engaging in false accounting and bookkeeping practices. Between 2007 and 2016, Herballife USA and Herbalife China were involved in corrupt systems by showing false records in their books.

Moreover, it benefited the Chinese government and made Herbalife China a state-owned business. Hence, they paid bribes to Chinese officials to get direct selling licences. The bribes include –

  • Paying for the meals
  • Travel expenses
  • Payment for their entertainment purpose
  • Several gift cards

Thus, in August 2020, Herbalife was convicted by the SEC, and they had to undergo penalties and change their business procedures. For instance, they had to sack the employees involved in the bribery process and give direction to strengthen their compliance procedures and policies.

The Bottom Line

In the end, we can say that the SEC has shaped the modern US business industry. They ask companies to maintain transparency and honesty in their business processes. This ensures that companies don’t commit fraud and break the FCRA rules, which shape the American business industry.

You can read the article to learn more about the FCRA guidelines and federal securities law. Also, it is done to prevent disasters like the 2008 stock market crisis and create havoc in the world. Thus, you can read the cases further to boost the compliance process and check your business thoroughly to avoid such mistakes.

FAQs

Here are a few frequently asked questions –

What was the SEC in US history?

The SEC was formed 1934 as an independent agency to regulate the U.S. securities market and protect investors from discrepancies.

Is the SEC only for US companies?

More than 1,500 companies are registered under the SEC regulations as non-US companies.

What event led to the SEC?

The crash of the 1929 Stock market led to the formation of the SEC and protected the US economy from depression.

Who is the boss of the SEC?

Gary Gensler is the president of the SEC. He was appointed as the president in 2021 by Joe Biden.

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