This site has been a big fan of SEC Commissioner Hester Peirce.
She is soon to leave her position and a future post will highlight some of her “greatest hits” as an SEC Commissioner including her frequent criticisms of various aspects of FCPA enforcement.
Recently, Peirce delivered this speech titled “Peirce Out” in which she continued to criticize various aspects of SEC enforcement – including as to the FCPA.
Peirce stated:
“The SEC, as part of the government, must limit itself to the exercise of powers given to it by the people. The SEC celebrated its 92nd birthday on Saturday; on June 6, 1934, the Securities Exchange Act, which created the SEC, became law. This law and other statutes give the agency its powers. We do not have the consent of the American people to exercise powers not conferred upon us by those statutes. I may have written the law differently if I were holding the pen, but my job is to follow statutory directives as given by Congress. We cannot freelance outside of these directives, and, of course, the ultimate constraint on SEC action is the Constitution; even if the statutes tell us to do something, we cannot do it if it contravenes the Constitution.
[…]
I also am concerned that the Commission through aggressive statutory interpretations is pushing hard against the limits of its authority. Reasonable restraint in reading our statutes and rules is the best course. If we rush up to the edge of every law and regulation, we might tumble over into unauthorized territory.”
Regarding the FCPA, Peirce stated:
“The Commission likewise should bridle its overly expansive reading of the Foreign Corrupt Practices Act’s requirements that companies devise and maintain a system of “internal accounting controls.” The Commission has misapplied this provision in its enforcement program by failing to limit it to the accounting context and instead using it as a lever to discipline companies that lack what the Commission perceives to be adequate internal controls unrelated to accounting. (See here, here, here). This aggressive reading already has drawn judicial criticism, (see here) and I hope the Commission turns about in response.”
