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Friday Roundup

December 9, 2016


Scrutiny alert and update, SEC Director of Enforcement to leave, sound analysis of the JPMorgan enforcement action, and for the reading stack.

It’s all here in the Friday roundup.

Scrutiny Alert and Update

This recent “The FCPA Pipeline Is Bulging” post highlighted the following recent disclosure from Israel-based Teva Pharmaceuticals Limited, a company that has been under FCPA scrutiny since 2012:

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United Airlines Resolves Books And Records And Internal Controls Action Based On Domestic Bribery And The SEC’s Inconsistencies Are Once Again Highlighted

December 8, 2016


If the above headline is confusing, you’ve forgotten (as it seems some commentators have) that the Foreign Corrupt Practices Act is a law much broader than its name suggests.

Because of the FCPA’s generic books and records and internal controls provisions, most FCPA enforcement actions (as a technical matter) do not involve any allegations or findings regarding foreign bribery. (This dynamic – termed non-FCPA FCPA enforcement actions for lack of a better term – has been highlighted in prior posts here, here and here).

Case in point is last week’s SEC enforcement action against United Continental Holdings Inc., the parent company of United Airlines Inc.

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PDVSA Petition Seeking “Victim” Status Is An Uphill Climb

December 7, 2016


Last week, Bariven S.A. (a subsidiary of Petroleos de Venezuela, S.A. (“PDVSA”) – the state-owned oil company of the Venezuela) made this filing in the DOJ’s Foreign Corrupt Practices Act prosecution against Enrique Rincon Fernandez, Abraham Jose Shiera Bastidas, Moises Abraham Millan Escobar and related prosecution against others moving “the Court to recognize Bariven’s rights as a victim and enter an order of restitution requiring [the defendants] jointly and severally, to make restitution [to the tune of $600 million] to Bariven as a victim of the offenses to which these Defendants have plead guilty.”

If this general issue sounds familiar, congratulations you have a good memory.

As highlighted in prior posts here, here, and here, Instituto Constarricense de Electricidad (“ICE”) of Costa Rica tried the same thing in connection with the Alcatel-Lucent FCPA enforcement action and its petition received a chilly reception by both the trial court the 11th Circuit.

PDVSA’s petition likewise faces an uphill climb.

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Checking In On Wal-Mart

December 6, 2016


In its recent 3Q FY2017 earnings call presentation Wal-Mart disclosed $29 million in Foreign Corrupt Practices Act and compliance related expenses ($24 million for ongoing investigations and inquiries and $5 million for global compliance program and organizational enhancements). The Q3 expenses of $29 million are slightly higher than the Q2 expenses of $28 million.

Doing the math, Wal-Mart’s 3Q FCPA and compliance-related costs is approximately $465,000 per working day.

Over the past approximate 4.5 years, I have tracked Wal-Mart’s quarterly disclosed pre-enforcement action professional fees and expenses.

While some pundits have ridiculed me for doing so, it quickly caught on as the popular thing to do.

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From The Dockets

December 6, 2016

Judicial Decision

This previous post mentioned that the DOJ filed a superseding indictment adding Foreign Corrupt Practices Act charges to its existing 2015 enforcement action against Ng Lap Seng and Jeff Yin.

This previous post highlighted the May 2015 civil case brought by Sanford Wadler (the former General Counsel of Bio-Rad) asserting various employment claims against the company in the aftermath of the company’s 2014 FCPA enforcement action in which it agreed to pay approximately $55 million to resolve DOJ and SEC FCPA enforcement actions.

This post further highlights the DOJ’s individual criminal charges against Ng and Yin as well as the strange twist in the Wadler – Bio-Rad litigation.

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