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As Is Fairly Typical, Uber’s FCPA Scrutiny Expands

uber2

All instances of Foreign Corrupt Practices Act scrutiny have a “point of entry” – an occurrence which gives rise to initial FCPA scrutiny.

From there, FCPA scrutiny often expands into other business dealings, other countries, etc. This dynamic is a major reason why pre-enforcement action professionals fees and expenses are often the largest financial ramification of FCPA scrutiny, exceeding (often by multiples) settlement amounts in an actual FCPA enforcement action.

Approximately three weeks ago, it was reported (see here) that Uber Technologies was under FCPA scrutiny.

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No U.S. Nexus, No Problem As U.S. Brings $30.5 Million FCPA Enforcement Action Against Chilean Company In Relation To Its Conduct With Chilean Officials

SQM

Last week the DOJ and SEC announced (here and here) a $30.5 million Foreign Corrupt Practices Act enforcement action against Sociedad Quimica y Minera de Chile S.A. (SQM), a chemical and mining company based in Chile, in relation to its conduct with Chilean officials.

The enforcement action is rife with policy issues including the proper scope of FCPA enforcement given that there is no U.S. nexus alleged other than SQM having Series B shares, a form of American Depository Shares, listed on the New York Stock Exchange and thus being required to file periodic reports with the SEC.

The enforcement action included: (i) a DOJ criminal information charging SQM with violating the FCPA’s books and records and internal control provisions that was resolved via a deferred prosecution agreement in which the company agreed to pay a $15.5 million criminal penalty; and (ii) an SEC administrative order finding FCPA books and records and internal violations in which the company agreed to pay $15 million civil penalty.

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Laureate Education, A So-Called “B Corp,” Discloses FCPA Scrutiny

laureate

One reason to read FCPA Professor is to stay ahead of the curve.

For instance, this November 2015 post titled “FCPA Risks on Campus” discussed how in recent years several U.S. higher education institutions have opened foreign campuses (either directly or through affiliates) in places such as China, India and the Middle East. It was noted that relevant government approvals, licenses, permits, certifications and the like of doing so are really no different than a company needing government approvals to establish a manufacturing presence in a foreign country.

Few higher education institutions are for-profit companies (much less issuers) but Laureate Education Inc. is and earlier this week, the company made a disclosure in this SEC filing about an $18 million (US) charitable donation in Turkey. As an aside, in October 2015 Laureate became a so-called B corporation (a public benefit corporation) and the below disclosure may be the first FCPA related disclosure by a B corp.

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FCPA Flash – A Conversation With Andrew Levine Regarding Nu Skin, Charitable Donations, And Strict Liability Enforcement

FCPA Flash

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 the written posts on FCPA Professor.

This FCPA Flash episode is a conversation with Andrew Levine (Debevoise & Plimpton). Levine is a primary author of the always informative Debevoise & Plimpton FCPA Update and a recent update included an article about the recent Nu Skin FCPA enforcement action that caught my eye.

As highlighted in this prior post, the SEC found that Nu-Skin violated the FCPA’s books and records and internal controls provisions based on a single charitable donation that its Chinese subsidiary made under circumstances in which subsidiary employees concealed relevant information from the parent company and otherwise acted inconsistent with parent company instructions. While the $765,000 settlement amount was not notable, often less high-profile FCPA enforcement actions present the most interesting and troubling issues.

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Friday Roundup

Roundup

Scrutiny alerts and updates, ripples, difficult business conditions, resource alerts, and for the reading stack. It’s all here in the Friday roundup.

Scrutiny Alerts and Updates

Wal-Mart

Bloomberg reports:

“Wal-Mart Stores Inc. is butting heads with the U.S. government over how to wrap up a long-running foreign corruption investigation. Officials have proposed that the world’s biggest retailer pay at least $600 million to resolve probes by the Justice Department and the Securities and Exchange Commission into whether it bribed government officials in markets from Mexico to India and China, according to three people familiar with the matter. The retailer has rebuffed the government’s request, two of them said.

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