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Stryker Joins The FCPA Repeat Offender Club

stryker

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.

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Brazil State-Owned Co. Allegedly Facilitates Payments To Brazilian Politicians And Political Parties And U.S. Collects Net $170 Million In FCPA Enforcement Action

Uncle Sam3

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.

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So Much For That Tone At The Top Thing As SEC Returns To Bring Enforcement Action Against SQM’s Former CEO

gonzelez

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.

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DOJ Quietly Dismisses Criminal Charges Against Gadio

Gadio

As highlighted in this prior post, in November 2017 the DOJ announced that Chi Ping Patrick Ho and Cheikh Gadio  were criminally charged with conspiring to violate the Foreign Corrupt Practices Act, violating the FCPA, conspiring to commit international money laundering, and committing international money laundering.

According to the DOJ: “[T]he defendants engaged in two bribery schemes to pay high-level officials of Chad and Uganda in exchange for business advantages for the Energy Company, a Shanghai-headquartered multibillion-dollar conglomerate that operates internationally in the energy and financial sectors.”

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United Technologies Corp. Resolves $13.9 Million Enforcement Action

UTC

Yesterday, the SEC announced that United Technologies Corporation resolved a $13.9 million Foreign Corrupt Practices Act enforcement action.

The conduct at issue concerned Otis Elevator Co. (a wholly-owned subsidiary of UTC), Pratt & Whitney (an operating division of UTC), and International Aero Engines (a joint venture of five aerospace companies including Pratt & Whitney) regarding a Russian and Azerbaijani improper payment scheme, a China aviation scheme, improper payments for Otis Elevator sales in China, and leisure travel for foreign officials from several countries including China, Kuwait, South Korea, Pakistan, Thailand, and Indonesia.

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