This previous post highlighted the SEC’s $25.2 million FCPA enforcement action against Sanofi and this post continues the analysis by highlighting additional issues to consider.
Timeline
Sanofi’s FCPA scrutiny began in mid-2014 (see this prior post). Thus, from start to finish, its scrutiny lasted approximately 4 years.
At the risk of sounding like a broken record to regular readers … if the FCPA enforcement agencies want the public to have confidence in their FCPA enforcement programs, they must resolve instances of FCPA scrutiny much quicker. The validity and credibility of FCPA enforcement depends on this. Having FCPA scrutiny linger for over four years is inexcusable particularly since Sanofi, in the words of the SEC:
If history is any guide, September is likely to be an active month for Foreign Corrupt Practices Act enforcement as the SEC’s fiscal year ends.
Sure enough, yesterday the SEC announced an enforcement action against Paris-based pharmaceutical company Sanofi. The conduct at issue focused on employees and agents of the company’s subsidiaries in Kazakstan and various Middle Eastern countries providing things of value to “foreign officials, including healthcare professionals, in order to improperly influence them and increase sales of Sanofi products.”
In doing so, the enforcement action once again raises the policy issue of the U.S. bringing an enforcement action against a foreign company (domiciled in a country also party to the OECD Convention) for its interaction with non-U.S. officials. (See here for a prior post).
A reader (a compliance professional at a large publicly traded company with operations around the world) asks:
“One of the things I am struggling with is how to measure the effectiveness of a compliance program. I find it easy to measure activity, but the real value is in the avoidance of penalties and pre/post expenses, negative publicity, customer retention, share value reduction, etc. A good compliance program for a global company is a significant and costly investment and one that is always being reviewed and squeezed as business cycles fluctuate. The catch-22 is that the more effective the compliance program, the less issues that are identified, equaling more questions as to why we need such a significant investment. The programs own success can be its biggest challenge. Thoughts on ideas on effective measurements of a compliance program?”
Set forth below are my thoughts on this difficult issue – difficult because of what legal authority (as well enforcement agency guidance) actually say vs. seemingly conflicting actual FCPA enforcement actions and enforcement agency double-speak.
Learning a new topic or elevating your knowledge and practical skills in a topic is not just for formal students in formal educational settings. Professionals in the workplace can also benefit from a “back to school” experience.
For professionals in the FCPA space – or wishing to join the FCPA space – the FCPA Institute serves this objective and the next FCPA Institute will take place in Philadelphia on Oct. 18-19.
At a typical FCPA conference, 40-50 individuals bombard you with information during various panels. Just introducing these countless individuals takes over one hour in the aggregate. Moreover, the 3 p.m. panelists were likely not present for the 10 a.m. panel, thus information is presented in a disjointed and largely repetitive fashion.
The FCPA Institute is different than a typical FCPA conference. At the FCPA Institute, information is presented in an integrated and cohesive manner by an expert instructor with FCPA practice and teaching experience.
FCPA Professor has been described as “the Wall Street Journal concerning all things FCPA-related,” and “the most authoritative source for those seeking to understand and apply the FCPA.”
Set forth below are the topics discussed this week on FCPA Professor.
Continuing with the analysis of U.S. v. Hoskins, this post highlights various big picture issues from the Second Circuit’s recent decision and this post rounds up other commentary regarding the decision.
How much do you know about the Foreign Corrupt Practices Act? Let’s find out.
To commemorate the FCPA’s 40th year, FCPA Professor is presenting the FCPA Challenge.
Each Thursday during 2018, a question will be posed and the answer will be below the fold.
This week’s question is: this 1993 enforcement action was against a company that manufactured and sold totalisator systems (a machine used for computing and showing bets at a racetrack) and concerned alleged improper payments to officials with the Horse Races Administration of Greece?
The FCPA Flash podcast provides in an audio format the same fresh, candid, and informed commentary about the Foreign Corrupt Practices Act and related topics as readers have come to expect from written posts on FCPA Professor.
This FCPA Flash episode is a conversation with Becky Rohr (former Principal Deputy Chief in the DOJ’s Fraud Section and current Vice President at Hewlett Packard Enterprise where she leads a team handling anti-corruption compliance in the Ethics & Compliance Office). During the podcast, Rohr discusses: (i) the dynamics of post-enforcement action compliance and reporting obligations; (ii) the DOJ’s suggestion in the FCPA Corporate Enforcement Policy regarding appropriate retention of business records; and (iii) her different vantage points surrounding the FCPA given her prior DOJ experience and current corporate experience.
Fresh off its recent decision in U.S. v. Hoskins (see here and here for prior posts), the Second Circuit has another Foreign Corrupt Practices Act appeal on its docket.
This July post previewed the FCPA (and related) appeal of Ng Lap Seng who was convicted of two counts of violating the FCPA, one count of paying bribes and gratuities, one count of money laundering and two counts of conspiracy “for his role in a scheme to bribe United Nations ambassadors to obtain support to build a conference center in Macau that would host, among other events, the annual United Nations Global South-South Development Expo.”
Recently Seng formally filed this appellate brief. The FCPA issues on appeal concern the corrupt intent element and the obtain or retain business element. There is an abundance of information in the legislative history regarding these topics, the open question is whether Seng’s lawyers will fully take advantage of it.
This prior post highlighted the Second Circuit’s recent decision in U.S. v. Hoskins in which the court rejected the DOJ’s expansive jurisdictional theory of prosecution against Lawrence Hoskins, a U.K. national.
This post continues the analysis by highlighting various “big picture” issues.
Legislative History Matters
In large part, the Second Circuit’s opinion was based on the FCPA’s legislative history demonstrating once again that legislative history matters.
Prior posts here and here highlighted the DOJ’s June FCPA enforcement action against Legg Mason regarding business conduct in Libya. It was noted in the prior post that FCPA enforcement actions against issuers that involve a DOJ and SEC component are almost always announced on the same day. Yet for some reason, back in June the i’s were not dotted or the t’s crossed at the SEC and the DOJ’s June enforcement action clearly had a placeholder for the forthcoming SEC prong.
That happened earlier today as the SEC finally announced its enforcement action.
Appellate decisions construing the Foreign Corrupt Practices Act are extremely rare. Thus, many in the FCPA community have been awaiting the Second Circuit’s long-awaited (oral argument was held in March 2017 – see here) decision in U.S. v. Hoskins.
In this decision, the court rejected the DOJ’s expansive jurisdictional theory of prosecution against Lawrence Hoskins, a U.K. national. In many respects, the Second Circuit’s decision was based on the FCPA’s legislative history – demonstrating once again that the legislative history matters (see here for a prior post).