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Two recent decisions out of the Southern District of New York provide new guidance on the scope of the jurisdictional breadth of the FCPA. These cases — SEC v. Straub, et al. and SEC v. Sharef, et al. — together provide valuable insight into the contours and limits of SEC jurisdiction over foreign national FCPA defendants.

In Straub, Judge Richard J. Sullivan denied a motion to dismiss filed by three former executives of a Hungarian telecommunications company whom the SEC charged with bribing foreign officials and covering up these bribes by falsifying corporate records and filings. The Straub decision broke ground in two respects. First, in a matter of first impression, Judge Sullivan held that the five-year statute of limitations applicable to FCPA actions does not start to run until a defendant is physically present in the United States. Second, Judge Sullivan held that the FCPA did not set forth a mens rea requirement for the use of instrumentalities of interstate commerce; as a result, the SEC is not required to prove that a defendant intended to use an instrumentality of interstate commerce (in this case, the routing of foreign emails through a U.S. server), but rather must simply show that such instrumentalities were in fact used. Judge Sullivan also found that the exercise of personal jurisdiction was proper because the defendants’ alleged conduct was sufficiently directed toward the United States to establish minimum contacts.

In Sharef, Judge Shira A. Scheindlin granted a motion to dismiss filed by a foreign national former CEO whom the SEC alleged facilitated the payment of bribes to foreign officials to obtain and retain business. Judge Scheindlin held that the court lacked personal jurisdiction over the defendant in Sharef. Notably, Judge Scheindlin found that the defendant’s actions in the alleged scheme were far too attenuated for the SEC to establish minimum contacts because the defendant merely urged and pressured another executive to make bribes and did not actually authorize the bribes. Since the bribes were authorized by other “higher-ups” at the company, it was questionable whether the defendant was even the proximate cause of the bribes themselves. In addition, the SEC failed to allege that the defendant directed or was aware of the subsequent cover-up and falsification of SEC filings that U.S. investors would have relied upon.