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.
As highlighted here, Stryker joined the FCPA repeat offender club as the SEC announced a $7.8 million enforcement action against the medical device company for not having internal accounting controls “sufficient to detect the risk of improper payments in sales of Stryker products in India, China, and Kuwait” and because “Stryker’s India subsidiary failed to maintain complete and accurate books and records.”
This previous post highlighted the DOJ’s enforcement action against Anthony Mace (the former CEO of SBM Offshore) and Robert Zubiate (a former sales and marketing executive at a company subsidiary). As highlighted in this prior post, the Mace enforcement action, in particular, should be required reading for all corporate executives.
Yesterday, the DOJ recently announced that Mace was sentenced to serve 36 months in prison and a fine of $150,000 and Zubiate was sentenced to serve 30 months in prison and a fine of $50,000. All of the sentencing documents on the court’s docket were filed under seal.
The end of September is traditionally an active period for Foreign Corrupt Practices Act enforcement as the SEC’s fiscal year comes to a close.
On the heels of yesterday’s Petrobras enforcement action (see here and here for prior posts), the SEC announced a $7.8 million enforcement action against medical device company Stryker for not having internal accounting controls “sufficient to detect the risk of improper payments in sales of Stryker products in India, China, and Kuwait” and because “Stryker’s India subsidiary failed to maintain complete and accurate books and records.”
In doing so, Stryker joins the list of FCPA repeat offenders (see here). As highlighted in this prior post, in 2013 Stryker resolved a $13.2 million enforcement action based on alleged conduct in Mexico, Poland, Romania, Argentina, and Greece.
This previous post went in-depth into the DOJ and SEC’s recent Foreign Corrupt Practices Act enforcement action against Petrobras which resulted in a net approximate $170 million enforcement action. This post continues the analysis by highlighting additional issues to consider.
First
The Petrobras enforcement action is believed to be the first ever FCPA enforcement action against a foreign government. As stated by the DOJ, Petrobras is a “state-owned and controlled oil and gas company.” As stated by the SEC, Petrobras is a “Brazilian government-controlled oil and gas company.” Reflective of this unusual aspect of the Petrobras enforcement action, the DOJ’s NPA states:
With the recent Petrobras enforcement action (see here for the prior post), there is lots of false and misleading information in the public domain regarding the actual FCPA settlement amount (that is the amount of money the DOJ and SEC will actually collect from the enforcement action). The Petrobras FCPA enforcement action is a net approximate $170 million action as clearly evidenced in the government’s documents as well as Petrobras’s own press release.
This post highlights the top ten corporate FCPA settlements of all-time.
Yesterday, Deputy Assistant AG Matt Miner delivered this speech.
It touched upon a number of Foreign Corrupt Practices Act issues including: the DOJ’s Corporate Enforcement Policy, voluntary disclosure, so-called declinations, coordinated resolutions, general compliance issues, and M&A transactions.
This post summarizes the speech and provides certain commentary.
This morning the DOJ and SEC announced (here and here) that Petrobras, a Brazilian state-owned and state-controlled energy company, entered into agreements with U.S. and Brazilian authorities “in connection with Petrobras’s role in facilitating payments to politicians and political parties in Brazil, as well as a related Brazilian investigation.”
After various credits and deductions for a related law enforcement action in Brazil, the net FCPA settlement is approximately $170 million ($85.3 million DOJ, $85.3 million SEC). Brazil will collect $682.6 million. The remainder of this post provides an in-depth summary of the enforcement action.
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 2010 SEC enforcement action concerning conduct in China and Vietnam included allegations that the company approved of and reimbursed its employee for questionable expenses including “flowers for the wife of the CEO” of an alleged state-owned or state-controlled enterprise.
In this, the Foreign Corrupt Practices Act’s 40th year, it is prudent to take a step back and ponder the question of whether the FCPA has been successful in achieving its objectives. This of course begs the question: what is the definition of success? (See here a 25 minute video which explores this issue, see also posts here, here, and here).
Recently, Stephanie Avakian (Co-Director of the SEC’s Enforcement Division) delivered this speech. While the speech does not specifically mention the FCPA, Avakian nevertheless ponders the meaning of success when it comes to SEC enforcement (and after all, the SEC does have a specialized FCPA Unit – one of only five such specialized units).
Foreign Corrupt Practices Act enforcement often seems more robust than it actually is because, in the relatively rare instances in which there is an individual prosecution in connection with a corporate action, the individual action often (but not always) occurs long before or long after the corporate action. Many FCPA Inc. participants, who have a vested interest in portraying more not less FCPA enforcement, count these occurrences as multiple enforcement actions when in reality they are the same core enforcement action. (This article highlights this dynamic as well as other dubious and haphazard FCPA Inc. counting methods).
Reflective of the above dynamic, as highlighted in prior posts here and here in January 2017 the DOJ and SEC announced a $30.5 million enforcement action against Sociedad Quimica y Minera de Chile S.A. (SQM), a chemical and mining company based in Chile, in relation to its interactions with Chilean officials. The bulk of the enforcement action involved use of the CEO’s “discretionary fund to direct payments to Chilean politicians, political candidates, and individuals connected to them “many of which violated Chilean tax law and/or campaign finance limits” and falsely recording such payments in SQM’s books and records.
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 Judge Shira Scheindlin. Judge Scheindlin served as a federal trial court judge in the Southern District of New York for 20+ years until May 2016. Most federal court judges go their entire career without an FCPA case being placed on their docket. However, Judge Scheindlin is an exception and during her time on the bench she refereed more disputed FCPA issues than any other federal court judge in FCPA history. During the podcast, Judge Scheindlin describes how she was generally on a judicial island when interpreting the FCPA and the difficulty of interpreting the “ambiguous” FCPA. The podcast is a must listen for anyone interested in FCPA jurisprudence.
A guest post today from Toronto-based Borden Ladner Gervais attorneys Milos Barutciski, Graeme Hamilton and Julia Webster.
On September 19, 2018, deferred prosecution agreements (DPAs) became available to resolve corporate offences in Canada under the Criminal Code and the Corruption of Foreign Public Officials Act.
Remediation Agreements will be available to resolve criminal charges against corporations, partnerships and other forms of business organizations without registering a criminal conviction. Remediation Agreements will be negotiated by the prosecution and the accused and are subject to judicial approval. They will typically be accompanied by the payment of penalties, restitution, implementation of compliance measures, and other terms and conditions as negotiated by the parties, including the potential appointment of corporate monitorships.