Supervisory Power is a power given to judges so that they can override the legitimacy of a Deferred Prosecution Agreement (DPA). The idea is that Judges feel the agreement between the violator and the SEC or DOJ deviate from the trend.
Such was the case for Fokker Services. Fokker is an aerospace parts distributor. It was found to have provided parts to sanctioned countries, primarily Iran, between 2005 and 2010. This was done with the approval of management and the employees who violated the sanctions are still employed by the firm. DOJ and Fokker made a DPA which was attached to a $21 Million fine. $21 Million was the revenue earned from the violations. The judge rejected DPA stating that the punishment was too weak considering how egregious the violations were.
Another reason to avoid DPA’s that unreasonably favor violators.
About the Author: Marcus Maltempo is a compliance professional with more than a decade of experience helping banks, law firms and clients manage investigations and regulatory responses.
