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Issues To Consider From The Credit Suisse Enforcement Action

Issues

This post highlighted the recent $77 million Foreign Corrupt Practices Act enforcement action against Credit Suisse concerning its internship and hiring practices involving family members of alleged Chinese “foreign officials.” This post continues the analysis by highlighting additional issues to consider.

Timeline

Credit Suisse’s FCPA scrutiny appears to have begun in late 2013 (see here). Thus from start to finish, its scrutiny lasted approximately 4.5 years.

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Canada-Based Kinross Gold Corp. Resolves Approximate $1 Million SEC Action Because Its Acquired Indirect African Subsidiaries Had Deficient Internal Controls

Kinross

Silly you for believing certain commentator hype that the Trump SEC would stop enforcing the Foreign Corrupt Practices Act or for thinking that the general lull in SEC corporate enforcement during the fourth quarter of 2017 meant anything.

In the second SEC corporate FCPA enforcement action in the last 2.5 weeks (see here for the prior Elbit Imaging action), the SEC announced yesterday that Canada-based Kinross Gold Corporation (a company with shares traded on the New York Stock Exchange) resolved an enforcement action “arising from the company’s repeated failure to implement adequate accounting controls of two African subsidiaries.” Without admitting or denying the SEC’s finding in this administrative order, Kinross agreed to, among other things, pay a $950,000 civil penalty.

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The Hidden Employee Costs Of FCPA Scrutiny And Enforcement

fired

As highlighted in the article “FCPA Ripples,” settlement amounts in an actual Foreign Corrupt Practices Act enforcement action are often only a relatively minor component of the overall financial consequences that can result from FCPA scrutiny or enforcement. Other ripples include, most prominently, pre-enforcement action professional fees and expenses, post-enforcement action professional fees and expenses as well as a host of other negative business consequences.

As long as there has been FCPA enforcement, it has been known that culpable employees have been terminated or disciplined in connection with FCPA investigations and enforcement actions.

Yet, as highlighted in this post, in certain recent FCPA enforcement actions (but not all – the SQM and Las Vegas Sands enforcement actions were silent on this topic) the DOJ has quantified the number of employees terminated or disciplined. According to DOJ resolution documents, in six recent enforcement actions approximately 160 employees have been terminated or disciplined. (This figure is in addition to numerous third parties terminated by companies resolving FCPA enforcement actions).

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