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The Case That Just Keeps On Giving – DOJ Announces Additional Charges In PDVSA Bribery Action

PDVSA

Several prior posts (see herehere and here for instance) have highlighted the clustering phenomenon and how a few discreet instances of alleged bribery yield an inordinate amount of Foreign Corrupt Practices Act enforcement activity against individuals.

One such example is the DOJ’s long-standing enforcement action (charges were first brought in late 2015) in connection with alleged corrupt schemes to secure contracts from Venezuela’s state-owned and state-controlled energy company, PDVSA.

Yesterday, the DOJ announced that Jose Manuel Gonzalez Testino (Gonzalez – a dual U.S.-Venezuelan citizen) was arrested at Miami International Airport based on a criminal complaint charging conspiracy to violate the FCPA and a substantive FCPA violation for “conspiring to make, and making, corrupt payments to an official [at PDVSA] in exchange for favorable business treatment with PDVSA.”

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Next Up – A $77 Million Enforcement Action Against Credit Suisse

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First, it was BNY Mellon Corp. in August 2015 for $14.8 million (see here and here for prior posts). Then, it was Qualcomm in March 2016 for $7.5 million (see here and here for prior posts). Then, it was JPMorgan in November 2016 for $202.6 million (see here, here, and here for prior posts).

Next up in Foreign Corrupt Practices Act enforcement actions (mostly targeting the financial services industry) focusing, in whole or in part, on internship and hiring practices being a form of bribery is Credit Suisse as the DOJ and SEC officially announced today (see here and here) the expected enforcement action (see here).

If you were wondering whether this “scurrilous and hypocritical” form of FCPA enforcement action (as stated by a former SEC Chairman see here) would carry forward to the Trump administration, you now have the answer.

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Legg Mason Also Ponies Up $64 Million To Resolve FCPA Enforcement Action Concerning Conduct In Libya That Occurred 9-14 Years Ago By “Only Two Mid-To-Lower Level Employees Of A Subsidiary”

LG

A few hours after the DOJ announced a net $293 million Foreign Corrupt Practices Act enforcement action against Société Générale S.A concerning conduct in Libya that occurred 9-14 years ago (see here for the prior post), the DOJ also announced that investment management firm Legg Mason also agreed to pony up $64 million to resolve a related enforcement action.

Pursuant to a three-year NPA, Legg Mason agreed to pay $64 million based on the conduct of “only two mid-to-lower level employees of a subsidiary of the company” (specifically Permal Group Ltd.). According to the DOJ: “Permal’s financial statements were consolidated into Legg Mason’s financial statements and they participated in a net revenue sharing arrangement, and all employees of Permal were subject to Legg Mason’s code of conduct.”

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Societe Generale Resolves Net $293 Million FCPA Enforcement Action Concerning Conduct In Libya That Occurred 9-14 Years Ago

Societegeneral

Earlier today, the DOJ announced that “Société Générale S.A. (SoGen), a global financial services institution based in Paris, France, and its wholly owned subsidiary, SGA Société Générale Acceptance N.V. (“SGA”) agreed to resolve a Foreign Corrupt Practices Act enforcement action “relating to a multi-year scheme to pay bribes to officials in Libya.” As indicated in the DOJ release and confirmed by a DOJ representative, the net FCPA settlement amount is $293 million after crediting $293 million for a related French law enforcement action.

In addition, the DOJ announced that Société Générale agreed to pay $275 million for violations arising from its manipulation of the London InterBank Offered Rate (LIBOR).

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An FCPA Enforcement Action That Slipped Through The Cracks

petroecuador

There is not much that goes unnoticed by the Foreign Corrupt Practices Act media.

However, this April 19, 2018 indictment of Frank Roberto Chatburn Ripalda (a dual United States and Ecuadorian citizen) appears to have slipped through the cracks.

The indictment alleges that between 2013 and 2015, Chatburn conspired with others by making corrupt payments to PetroEcuador officials in order to obtain and retain contracts for Galileo (described as an Ecuadorian company that provided services in the oil and gas industry) from PetroEcuador.

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