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Friday 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


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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In Depth Into The Och-Ziff FCPA Enforcement Action

och ziff

Last week, the DOJ and SEC announced (here and here) a Foreign Corrupt Practices Act enforcement action against Och-Ziff Capital Management Group (and a related entity) for improper business practices in various African countries. The aggregate settlement amount was $412 million (a $213 million DOJ criminal penalty and a $199 million SEC resolution consisting of disgorgement and prejudgment interest), the 4th largest FCPA settlement amount of all-time.

As highlighted in this previous post, the SEC also found Daniel Och (CEO) and Joel Frank (CFO) culpable for certain of the improper conduct. As indicated in the post, this represents what is believed to be the first time in FCPA history that the SEC also found the current CEO and CFO of the issuer company liable, to some extent, for company FCPA violations. Moreover, the $2.2 million Och agreed to pay, without admitting or denying the SEC’s findings, is the largest settlement amount in FCPA history by an individual in an SEC action.

Whether the Och-Ziff enforcement action is the “first time a hedge fund has been held to account for violating the FCPA” (as the DOJ stated in its release) is a debatable point. (See here for the 2007 FCPA enforcement action on the DOJ’s FCPA website against hedge fund Omega Advisors).

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Issues To Consider From The Nu Skin Enforcement Action


This previous post highlighted the SEC’s Foreign Corrupt Practices Act enforcement action against Nu Skin Enterprises.

This post continues the analysis by highlighting additional issues to consider from last week’s enforcement action.

Similar, Yet Different

Before the Nu Skin action, there have been several FCPA enforcement actions that have included, in whole or in part, charitable donations as highlighted in this recent post.

All of the prior enforcement actions though appear to have been involved pre-existing, presumably bona fide charitable organizations that a “foreign official” nevertheless was involved in or was valued by the “foreign official.”

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A Blemish – Nu Skin Enterprises Resolves SEC FCPA Enforcement Action Based On Its Chinese Subsidiary’s “Charitable Donation”


A common theme in 2016 SEC Foreign Corrupt Practices Act enforcement actions has been foreign subsidiaries (often in China) engaging in conduct without the knowledge of the parent company, the subsidiary taking steps to conceal the conduct from the parent company, yet in what amounts to strict liability, the SEC holding the parent company liable for books and records and internal control violations.

The SEC returned to this theme yesterday in this administrative action against Nu Skin Enterprises Inc., a Utah based company in the business of manufacturing and marketing cosmetic and nutritional products primarily through direct selling, or multi-level marketing, channels.

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Regarding Charitable Foundations …


This previous post highlighted Hillary Clinton’s corruption perception problem.

With additional revelations about the Clinton Foundation recently in the news (see here for AP report, here for a Los Angeles Times report), this post highlights Foreign Corrupt Practices Act enforcement actions that have involved, in whole or in part, donations to foundations founded by or favored by foreign officials.

To be sure, Hillary Clinton is not the only U.S. official or candidate for office who has been under the microscope regarding a charitable foundation (this recent article “The Uncomfortable Truths and Double Standards of Bribery Enforcement” details other examples).

However, the irony is that as Secretary of State Clinton championed the U.S. crusade against foreign bribery under the FCPA stating that the Obama administration “has taken a strong stand when it comes to American companies bribing foreign officials” and that any perceived weakening of the FCPA “would not give us the leverage and the credibility that we are seeking” on the world stage.

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