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SEC Brings Another Enforcement Action Against A Former Cognizant Executive

Thiruvengadam

Approximately 90% of SEC corporate FCPA enforcement actions in recent years have lacked any related charges against company employees.

A bit unusual then that the February 2019 enforcement action against Cognizant Technology Solutions (see here) has resulted in not one, not two, but three individual enforcement actions as last Friday the SEC announced an administrative action against Sridhar Thiruvengadam (pictured – an Indian national and resident who previously served as Cognizant’s Chief Operating Officer).

Unlike the two prior individuals charged by the SEC and DOJ (Gordon Coburn and Steven Schwartz) who appear to be putting the government to its burden of proof, Thiruvengadam, without admitting or denying the SEC’s findings, agreed to pay a $50,000 civil penalty in an enforcement action that lacked any U.S. jurisdictional allegation other than that Thiruvengadam participated in a video conference from India with certain executives who participated in the video conference from the U.S.

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This Week On FCPA Professor

ThisWeekPost

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.

See here for the latest episode of the FCPA Flash podcast regarding the Supreme Court’s recent decision in Gamble and its implications for FCPA enforcement including “piling on.”

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DOJ Deputy Assistant Attorney General Miner On “The Two Primary Goals Of White Collar Criminal Enforcement” (With Commentary)

miner

It’s mid-September which means a few things: the days are getting shorter, the trees are beginning to show color, and DOJ and SEC enforcement officials are on the speaking circuit.

Earlier this week it was SEC Chairman Jay Clayton (see here for the prior post) and yesterday it was DOJ Deputy Assistant Attorney General Matthew Miner who spoke on the two primary goals of white collar criminal enforcement: “(1) to deter legally non-compliant behavior and punish it where it does occur; and (2) to encourage greater compliant behavior, including creating a more level playing field for those who play by the rules.”

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Once Again, Rebooting A Long-Standing FCPA Proposal, This Time In The Aftermath Of A Recent Disclosure By Ciena

proposal

Including the first time I proposed this concept in 2010, this is the 10th time I have written this general post (see herehereherehereherehereherehere and here for the previous versions) and until things change I will keep writing it which means I will probably keep writing this same general post long into the future.

The proposal is this: when a company voluntarily discloses an FCPA internal investigation to the DOJ and/or SEC and when one or both of the enforcement agencies do not bring an enforcement action, have the enforcement agency publicly state, in a thorough and transparent mannerthe facts the company disclosed and why the enforcement agency did not bring an enforcement action based on those facts.

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I’m Not Sure Why A Law Firm Actively Marketed This “Favorable” Settlement

justsaying2

As highlighted in prior posts here and here, the recent Foreign Corrupt Practices Act enforcement action against Juniper Networks was an $11.7 million joke.

For starters, the company was under FCPA scrutiny for an unconscionable six years, the conduct at issue was beyond any conceivable statute of limitations, the SEC invoked an internal controls standard of liability that does not even exist in the FCPA, the company agreed to pay $5.2 million in disgorgement even though the SEC did not allege or find any violations of the FCPA’s anti-bribery provisions, and a fair read of the SEC’s allegations is that the parent company was a victim of subsidiary employee conduct.

In short, if I was with the law firm representing Juniper Networks in connection with this enforcement action, I certainly would not actively market my participation in this joke of an enforcement action and would most certainly not call it a “favorable” settlement for my client. Yet that is exactly what the law firm representing Juniper Networks did with this release.

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