John Joy on Representing FCPA Whistleblowers

There are whistleblower lawyers.

John Joy
New York, New York

But whistleblower lawyers who specialize in the Foreign Corrupt Practices Act (FCPA) – do they exist?

We didn’t think so until we ran into John Joy.

Joy spent seven years working as a corporate criminal defense attorney at Willkie Farr & Gallagher. 

He always wanted to be a federal prosecutor. But he was born in Ireland and he’s not a U.S. citizen, so he’s precluded from working as a federal prosecutor in the United States, where he now lives.

Next best thing? Start a law firm to represent foreign whistleblowers who have the goods on companies engaged in foreign bribery.

The name of the firm? FTI Law – or for the individual.

After years of representing corporations, Joy now works exclusively for individuals.

“FTI stands for – for the individual,” Joy told Corporate Crime Reporter in an interview last month. “That’s the concept behind the firm. We would only be acting for the individual. We tell clients – we don’t take on work for corporations. We very much set out to do work on behalf of the individual – representing David versus the Goliath.”

What type of work do you do?

“We are a whistleblower law firm.”

“Whistleblower law firms are usually a jack of all trades and a master of one. Our subject mastery is the Foreign Corrupt Practices Act (FCPA). We specialize with FCPA whistleblowers. They make up the majority of our clients. But we also do SEC whistleblowers more generally and IRS and CFTC work.”

Have you come across other law firms that are exclusively or primarily FCPA whistleblower law firms?

“I have not. But I do understand that most law firms that do SEC whistleblower work also have an FCPA component.”

“Someone calls us and asks – why should we be using you? We tell them that when the FCPA whistleblower puts in a complaint with the SEC or the Department of Justice, if that triggers an investigation, the company is going to hire a white shoe law firm to rigorously test those allegations and put up a good defense. The whistleblower needs someone who knows exactly how rigorous that process is and how to build a submission that is going to withstand that.”

“Once the whistleblower gives their information to the SEC or the Department of Justice, they take a back seat in the process and they are not given the opportunity to engage or shape the investigation in any way. It’s critical that they have a submission drafted by someone who knows exactly what outside counsel is going to do to test those allegations and what they are going to do to defend.”

“I’ve had a really good experience with the FCPA. I’ve worked in a number of countries around the world. And I’ve built compliance programs designed to prevent FCPA violations. I have a skill set that not a lot of other whistleblower practices have.” 

How many cases have you filed before the SEC?

“It’s less than a year since we got off the ground. We have filed in the double digits in terms of numbers of cases.”

Have any been settled?

“No. We are very early in the process. Typically an SEC investigation will take about two years. And when you are talking about an FCPA case, it’s going to be a little bit longer.” 

“And when an investigation settles, it then starts a new process, which is the application of the whistleblower award, and we wouldn’t expect that to take less than a year.” 

“So, even on an expedited time scale, you would be looking at three to four years before the whistleblower gets a payout.”

You have no money coming in the door until one of these cases settle?

“That is correct. We are building a pipeline of clients where we are fairly certain that within a couple of years we will have a payout or two and will be able to finance it until we hit that payout.”

When the SEC announces whistleblower awards, they don’t say what type of cases they are. Have you been able to identify FCPA whistleblower awards?

“While the SEC doesn’t release the details of the cases, some of the law firms that represent the whistleblowers will often issue press releases. And sometimes law firms are quite explicit. And they say – we represented this individual in an FCPA whistleblower case.”

“And when you look at some of the whistleblower payouts from the SEC, sometimes you can tell by the size of the payout, you can broadly guess it was an FCPA. Some of the larger payouts, especially the ones over $100 million, you can guess there are probably only a few cases that fall into that category of fine. And often there are not a lot of cases that result in that kind of payout.”

What percentage of your clients are foreign clients?

“The vast majority. That is a function of the fact that the FCPA is always going to focus on conduct outside of the United States. And that means that the people who are witnesses to it and the whistleblowers are usually people in those jurisdictions.”

What percentage of SEC whistleblower settlements are FCPA cases?

“It would be a small percentage. Even on a good year, you would expect to see only ten to twelve FCPA settlements.”

There were very few FCPA cases settled last year. Why?

“There was a real drop in FCPA cases last year. I put that down to the change in administration. But the SEC whistleblower program is going to assist greatly in the enforcement of the FCPA by giving whistleblowers these incentives. The critical component is allowing them to report anonymously. I don’t think we have hit the critical mass where people know enough about the program and the benefits to supercharge enforcement. But that might come.”

“One of the reasons we haven’t hit that point yet is that the SEC whistleblower program is exclusively designed for people who speak English as their first language. The submission form and the information the SEC provides is all in English and it doesn’t give that many options for people who don’t have English as a first language to access the program. But that is going to change. It is something we are constantly looking at – how do we make this program accessible to people in other jurisdictions where people don’t speak English as their first language.”

If you were to do a heat map of the world for foreign bribery, what countries glow red?

“Where enforcement activity will come from has nothing to do with the perceived corruptness of a jurisdiction. I always use the example of China and Russia. Russia is perceived as being a more corrupt country than China. But only about six or seven percent of the FCPA enforcement actions over the past few years have involved Russia.” 

“China is viewed as less corrupt. But they are involved with about 40 percent of FCPA actions. This is because FCPA activity is driven by economic activity. Where you see economic activity outside the United States is typically in countries with big economies – Brazil, India, China. Those are some of the biggest economies outside of the United States. And that is where you are seeing FCPA activity. I would expect that to continue.”

“If you are looking for the next FCPA hotspot, it would be where the next emerging economy is going to be. The more money and projects you have in a country, the more options you have for non compliance, corruption and bribery.”

What percentage of the cases that come in your door do you actually pursue?

“Very few. If we had 100 inquiries, we might take two or three of them.” 

What are the indicators of a good whistleblower case?

“We look for what the SEC looks for. We look for a whistleblower who had access to reliable information. Something you see a lot of is informed speculation. Someone saw something and they speculate there was an FCPA violation. It becomes very clear very quickly in speaking to someone if they had reliable information on what definitely was an FCPA violation as opposed to speculation that something might have occurred.”

“Does the whistleblower have first hand information? Many people will call us and say they witnessed something, when in fact they merely talked to someone else who might have witnessed something. You are dealing with hearsay and speculation. You can already tell that it would be difficult for the SEC to track down the information.”

“We also look for someone who has specific allegations. People will come in and they will tell you about all of the possible things that have gone wrong at a company. Often that is counterproductive for the SEC, which is trying to investigate a specific violation.”

“When someone comes to us with specific information, those are the kind of cases we know the SEC is most likely going to invest resources to investigate.”

[For the complete q/a format Interview with John Joy, see 36 Corporate Crime Reporter 14(12), April 4, 2022, print edition only.]

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