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Blowing The Whistle On Recent Commentary

July 29, 2016

blowwhistle

Pardon me for being that guy, but in the Foreign Corrupt Practices Act space someone needs to put on the stripes every now and then and blow the whistle.

This post does just that regarding certain recent “declination” commentary including the recent Johnson Controls enforcement action. For prior posts on the DOJ’s recent so-called “declinations” in the Nortek and Akamai see this post titled “Dont’ Believe the Hype, Rather Ask What Viable Criminal Charges Did the DOJ Actually Decline.” For prior posts on the Johnson Controls enforcement action see here, here, and here.

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Ninth Circuit Dismisses Shareholder Action Focused On Wynn Resort’s $135 Million Donation To The University Of Macau

July 28, 2016

Judicial Decision

This post earlier this week highlighted the Eighth Circuit’s recent opinion affirming dismissal of several Wal-Mart FCPA related derivative actions.

Continuing with the theme, in this recent opinion the Ninth Circuit affirmed dismissal of a shareholder derivative lawsuit alleging that Wynn Resorts board of director defendants breached their fiduciary duties and committed corporate waste by, among other things, approving a $135 million donation to the University of  Macau because, the shareholders allege, the donation caused the company to incur legal expenses and be exposed to potential liability.

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Issues To Consider From The LAN Airlines Enforcement Action

July 27, 2016

Issues

This previous post went in-depth regarding the $22 million parallel DOJ and SEC enforcement action against LAN Airlines.

This post continues the analysis of the enforcement action by highlighting additional issues to consider.

Defiant

As noted in connection with the prior SEC enforcement action against Ignacio Cueto Plaza, the conduct at issue is notable for several reasons.

First, the problematic conduct was engaged in by an individual currently with the company. The vast majority of FCPA enforcement actions involve the conduct of former employees.

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In Connection With A 2006 Argentine Labor Dispute, Chilean Airline Pays U.S. Government $22 Million

July 26, 2016

LATAM

Five months ago, the SEC brought a Foreign Corrupt Practices Act enforcement action against Ignacio Cueto Plaza (“Cueto”), the Chilean CEO of Santiago, Chile based LAN Airlines S.A. (“LAN”) for authorizing payments in 2006 and 2007 to a third party consultant in Argentina in connection with LAN’s attempts to settle disputes on wages and other work conditions between LAN Argentina S.A. (“LAN Argentina”), a subsidiary of LAN, and its employees.

Yesterday, the DOJ and SEC returned to the same conduct by announcing (here and here) parallel FCPA enforcement actions against LAN.

In short, the end result of an old labor dispute between a Chilean airline and Argentine workers is approximately $22 million flowing into the U.S. Treasury because LAN has shares that are traded on a U.S. exchange.

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Eighth Circuit Affirms Dismissal Of Wal-Mart Derivative Actions

July 25, 2016

Wal-Mart

As highlighted in this prior post, in March 2015 a federal district court dismissed eight Wal-Mart shareholder derivative actions (consolidated into one) brought in the aftermath of the company’s FCPA scrutiny.

Last Friday in this opinion, the Eighth Circuit affirmed the dismissal.

Those who predicted that the Wal-Mart derivative actions would set a new standard for director liability were once again proven wrong (see here for the prior post).

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