How the SEC Terminates Investigations

The Securities and Exchange Commission (SEC) began investigating Mexican cement company Cemex in 2016 over foreign bribery allegations linked to a project to build a cement plant in Colombia. The Department of Justice (DOJ) joined the investigation in 2018, issuing a subpoena for information “relating to its operations in Colombia and other jurisdictions.”

However, the company said it hasn’t heard from the agencies since 2020 and communicated to investors that it believes these investigations are no longer being actively pursued.

While the DOJ doesn’t tend to announce terminations after a long time has elapsed, the SEC operates differently. In an interview with Global Investigations Review, Pillsbury partner David Oliwenstein said that “[p]olicy generally requires that the SEC staff provide a termination letter formally letting these entities and individuals know that the investigation has concluded.”

“What may have happened here is that because so much time has elapsed, the SEC staff may have concluded that it was unnecessary under these circumstances to send a termination letter,” Oliwenstein said.

Oliwenstein said that the wording of Cemex’s disclosure was “artful” because it is “couched in what the company believes”. It doesn’t say that the files have been closed, but it “makes sense that the company wouldn’t want to necessarily draft this disclosure to be more affirmative than they absolutely have to be to get the message across,” he added.

“To the extent that the company believed this was some sort of overhang over the company … there are a lot of benefits to clearing that up with the market,” Oliwenstein said.

Click here to read the full story (subscription required).