Charles Edward Cain

Charles Cain was appointed deputy chief of the FCPA unit in 2011, after more than a decade of service at the US Securities and Exchange Commission. He is based in the commission’s Washington, DC, headquarters.

Cain has been involved in some of the SEC’s biggest foreign bribery cases, but his early days at the commission weren’t spent exclusively on the FCPA.

Cain arrived at the SEC in 1999, after receiving his law degree from George Washington University Law School in 1997, and completing his undergraduate education at the State University of New York at Stony Brook.

In the decade after his arrival, Cain investigated a variety of securities matters, including accounting fraud and insider trading. He worked on major cases against mortgage funding giant Fannie Mae, which settled for US$400 million in 2006, and technology company Lucent Technologies (which became Alcatel-Lucent in 2006, and was merged with Nokia in 2016), which settled for US$25 million in 2004. Cain also worked on a 2008 insider trading case against Chanin Capital and helped to litigate a pump-and-dump action against SpongeTech Delivery Systems in 2009.

Cain’s record has earned him praise from former associates and defence attorneys alike. Paul Berger, a former associate director of the SEC’s enforcement division who worked closely with Cain on the Fannie Mae case, called Cain a “very, very bright and really just a terrific attorney."

"I really admire his work,” Berger, now a partner at Debevoise & Plimpton, told Just Anti-Corruption.

In 2008 and 2009, Cain helped litigate the SEC's actions against a Florida software company, Faro Technologies, and its former Asia-Pacific sales director, Oscar Meza, for bribes paid to employees of Chinese state-owned companies. Faro paid almost US$1.9 million to resolve the matter in 2008, and Meza settled in 2009 for US$56,700 in disgorgement, prejudgment interest and civil penalties.

Early in 2011, Cain litigated the SEC’s cease-and-desist order against Rockwell Automation, a Wisconsin company that settled for nearly US$2.8 million in disgorgement, prejudgment interest and civil penalties over alleged violations of the FCPA’s books-and-records provision committed by a Chinese subsidiary.

That same year, Cain was involved in a US$95 million FCPA settlement with Magyar Telekom, a Hungarian telecoms company and a subsidiary of Deutsche Telekom, over allegations that the company had bribed officials in Macedonia to maintain its position in the country’s telecoms market. Cain supervised the investigation into Magyar Telekom, which was also the subject of a parallel probe by the US Department of Justice. In addition to the corporate settlement, the SEC charged three former Magyar Telekom executives, who are scheduled to go to on trial in the District Court for the Southern District of New York in May 2017.

Cain was counsel in the SEC’s enforcement action against the drug giant Pfizer, which settled allegations of bribery in Russia, China, Italy, Croatia, Serbia, the Czech Republic, Bulgaria and Kazakhstan in 2012. As part of the action, the SEC separately charged another pharmaceutical company, Wyeth – which was acquired by Pfizer in 2009 – with its own FCPA violations. The two companies paid a combined US$45.2 million in disgorgement and prejudgment interest to resolve the SEC’s allegations.

More recently, Cain supervised a landmark investigation into Och-Ziff Capital Management, which in September 2016 became the first hedge fund to settle FCPA violations in the history of the 1977 foreign bribery statute’s history. Och-Ziff paid US$413 million to resolve charges brought by the SEC and DOJ that it bribed high-level officials in Africa. The SEC also imposed sanctions against two high-level Och-Ziff executives: Dan Och, the hedge fund’s founder and CEO, and Joel Frank, the fund’s CFO. The SEC and DOJ investigations into the hedge fund’s bribery schemes continue.

Defence lawyers describe Cain as “very straightforward" and "data-driven”. Drawing on his accounting fraud background, Cain is someone who brings the financial analysis tools more common in other SEC investigations to the FCPA world, the lawyers said.

“He is one of the more data-focused individuals at the SEC,” said Laura Flippin, a partner at DLA Piper.

Many lawyers describe Cain and his long-time colleague, assistant director Tracy Price, in similar terms. But some argue Cain is the more low-key regulator. Rather than demanding documents in person, one lawyer said, Cain will send a more “contemplative” request a few days after the meeting.

Most defence lawyers describe Cain as easy to deal with. Gregory Bruch, a founding member of Bruch Hanna who spent more than a decade at the SEC, knew Cain as a staff attorney and has handled FCPA cases against him since moving to private practice, described Cain as a “very smart and thoughtful lawyer” and a “very experienced hand” at the agency.

"I found him to be smart, tough, always willing to engage in constructive dialogue, always prepared, always listens, and is a very worthy adversary,” Bruch said.

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