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JPMorgan – A Trifecta Of Off-The-Rails FCPA Enforcement

Offtherails

Bloomberg Law’s White Collar Crime Report recently published my article “JPMorgan – A Trifecta of Off-The-Rails FCPA Enforcement.” The article can be downloaded here and below is the abstract.

The Foreign Corrupt Practices Act has specific elements that must be met in order for there to be a violation. However, with increasing frequency it appears that the Department of Justice and Securities and Exchange Commission have transformed FCPA enforcement into a free-for-all corporate ethics statute in which any conduct the enforcement agencies find objectionable is fair game to extract a multi-million dollar settlement from a risk-averse corporation.

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In A Domestic Corruption Case, The First Circuit Rejects The Narrative In Recent FCPA Enforcement Actions Concerning Internship And Hiring Practices

You be the Judge

In the past 1.5 years or so, there have been three Foreign Corrupt Practices Act enforcement actions focused on internship and hiring practices of family members of alleged “foreign officials” and several other companies are remain under scrutiny for the same alleged practices.

As highlighted here and here, in August 2015 BNY Mellon agreed to pay $14.8 million to resolve SEC findings that the company provided “valuable student internships to family members of foreign government officials affiliated with a Middle Eastern sovereign wealth fund.”

As highlighted here and here, in March 2016 Qualcomm agreed to pay $7.5 million to resolve SEC findings that the company “provided or offered full-time employment and paid internships to family members and other referrals” of alleged “foreign officials” at state-owned or state-controlled enterprises.

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On Inauguration Day, We Really Ought To Pause And Reflect

inauguration

In recent weeks, the U.S. has brought Foreign Corrupt Practices Act enforcement actions against Brazilian companies based in part on conduct with Brazilian politicians and party parties and another enforcement action against a Chilean company based on its conduct with Chilean politicians and party parties. (See here and here).

FCPA enforcement actions frequently include allegations about “golf in the morning and beer drinking in the evening,” expensive bottles of wine, spa and sauna treatments, charitable contributions or internship and hiring practices all involving alleged “foreign officials.”

Bribery, the U.S. government says, and confidently proclaims “we in the United States are in a unique position to spread the gospel of anti-corruption” and that FCPA enforcement ensures not only that the United States “is on the right side of history, but also that it has a hand in advancing that history.”

Yet on inauguration day, when Washington, D.C. is awash in corporate money more so than a typical day, we really ought to pause and reflect.

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The First-Ever National Action Plan On Responsible Business Conduct Is A Whole Lot Of Fluff

fluff

Recently the U.S. government released its “first-ever National Action Plan on Responsible Business Conduct.” (See here for the document, here for the State Department release and here for the White House release).

I don’t know the precise answer for what the expectation should be for the final deliverable of a government program launched approximately 2.5 years ago and issued in the final days of a lame duck administration. Whatever that expectation level should be, the National Action Plan is a whole lot of fluff with some overblown rhetoric and uncomfortable truths mixed in that misses the big picture.

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Same Old, Same Old From The DOJ On Individual FCPA Prosecutions

DOJ2

In running a Foreign Corrupt Practices Act news source for seven years running, there is a “been there, done that” aspect to some of the writing.

For instance, every late November FCPA Professor highlights speeches by DOJ and SEC enforcement officials at a certain FCPA conference run by a for-profit conference company which engages in the disgraceful practice of marketing our public officials to draw attendance to its paid event as if the public officials are a commodity they own. (See here, here, and here for prior posts regarding this practice).

Why DOJ and SEC officials allow themselves to be used in such a way is beyond me.

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