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Across The Pond, Rolls-Royce Also Resolves A $625 Million U.K. Enforcement Action

Rolls

This recent post went in-depth into the $170 million Foreign Corrupt Practices Act enforcement action against Rolls-Royce. As mentioned in the post, the FCPA enforcement action against Rolls-Royce was part of a broader $800 million global resolution that also included a U.K. Serious Fraud Office component as well as Brazil law enforcement action.

The approximate $625 million U.K. enforcement action comprised the bulk of $800 million global resolution (that would seem to make sense, Rolls-Royce is after all a U.K. company) and is summarized below including the several failure to prevent bribery counts under the Bribery Act.

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In-Depth – General Cable Resolves $75.8 Million FCPA Enforcement Action, Former Senior VP Also Resolves SEC Action

generalcable

Don’t yet close the books on 2016 Foreign Corrupt Practices Act enforcement.

Yesterday, the DOJ and SEC announced (here and here) an FCPA (and related) enforcement action against Kentucky-based General Cable Corporation (a manufacturer and distributor of cable and wire). The conduct at issue occurred in Angola, Bangladesh, Indonesia, Thailand, China, and Egypt.

The $75.8 million enforcement action involved a DOJ non-prosecution agreement in which the company agreed to pay an approximate $20.5 million penalty and an SEC administrative cease and desist order in which the company agreed to pay approximately $55.3 million in disgorgement and prejudgment interest.

In addition, the SEC also announced that Karl Zimmer, General Cable’s former Senior Vice President responsible for sales in Angola, agreed to pay a $20,000 civil penalty without admitting or denying the SEC’s findings that he knowingly circumvented internal accounting controls and caused FCPA violations when he approved certain improper payments.

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From The Dockets

Judicial Decision

This previous post mentioned that the DOJ filed a superseding indictment adding Foreign Corrupt Practices Act charges to its existing 2015 enforcement action against Ng Lap Seng and Jeff Yin.

This previous post highlighted the May 2015 civil case brought by Sanford Wadler (the former General Counsel of Bio-Rad) asserting various employment claims against the company in the aftermath of the company’s 2014 FCPA enforcement action in which it agreed to pay approximately $55 million to resolve DOJ and SEC FCPA enforcement actions.

This post further highlights the DOJ’s individual criminal charges against Ng and Yin as well as the strange twist in the Wadler – Bio-Rad litigation.

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In Depth Into The JP Morgan FCPA Enforcement Action

JPMorgan

Yesterday, the DOJ and SEC announced (here and here) a $202.6 million FCPA enforcement action against J.P. Morgan (and a related entity) based on its alleged improper hiring and internship practices that the U.S. government has labeled bribery and corruption.

While the enforcement action was expected to focus on alleged improper hiring and internship practices involving so-called Chinese “princelings” (family members of alleged Chinese foreign officials), a meaningful component of the DOJ’s enforcement action involves hiring and internship practices involving family members of private individuals. Specifically, the DOJ’s non-prosecution agreement highlights 5 examples of “Quid Pro Quo Hiring” and 2 examples (40%) concern private companies: “a private Chinese manufacturing company” and a “Taiwanese private financial holding company.”

Numerous ironies, contradictions, and rule of law concerns abound in the enforcement action that will be explored in more detail in future posts. (In this clip, I talk to National Public Radio about one).

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Why The Meaning Of “Foreign Official” Matters

why

This is not the first time I’ve written about this general topic nor is it likely to be the last.

In the minds of some, Foreign Corrupt Practices Act compliance is easy – you just don’t bribe.

However, as recent enforcement activity has demonstrated, FCPA enforcement actions often include allegations about internships (BNY Mellon and Qualcomm), sports tickets (BHP Billiton), travel and entertainment (GlaxoSmithKline and several other enforcement actions), charitable donations (Nu Skin) and other inconsequential things of value such as flowers, cigarettes, and golf in the morning and beer drinking in the evening (Eli Lilly, SciClone Pharmaceuticals and several other enforcement actions).

In other words, the underlying activity is legal and socially acceptable in most situations. In fact, it is often called effective sales and marketing, wining and dining the customer, or maintaining good will. Yet when such activity is focused, directly or indirectly, on a “foreign official” the U.S. government is inclined to call it bribery.

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