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Wow – The SEC Acknowledges That Section 13(b)(6) Exists

wow

In 1988, the FCPA’s books and records and internal controls provisions were amended to include a de facto “good faith” compliance defense in certain situations involving issuers. (See 15 USC 78m(b)(6) – so-called Section 13(b)(6) of the ’34 Act). Since then, Section 13(b)(6) has seemed to be relevant to several Foreign Corrupt Practices Act enforcement actions, however the enforcement actions were silent on this important statutory provision.

The recent Eni enforcement action (see here and here for prior posts) is believed to be the first FCPA enforcement to meaningfully address Section 13(b)(6). In this regard, wow – the SEC actually acknowledged that Section 13(b)(6) exists after completely ignoring this relevant statutory provision in several prior relevant enforcement actions. But did the SEC get it right?

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Issues To Consider From The Eni Enforcement Action

Issues

This prior post went in-depth into the recent Eni enforcement action and this post continues the analysis by highlighting additional issues to consider.

Timeline

As stated in Eni’s recent disclosure: “In 2012, Eni contacted the U.S. Department of Justice (DoJ) and the U.S. SEC in order to voluntarily inform them about this matter, and has kept them informed about the developments in the Italian Prosecutors’ investigations and proceedings. Following Eni’s notification, both the U.S. SEC and the DoJ started their own investigations regarding this matter.”

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Eni Joins The Repeat Offender Club – This Time Resolves A $24.5 Million SEC FCPA Enforcement Action

eni

As highlighted in this prior post, in 2010 ENI S.p.A (an Italy-based oil and gas company with American Depositary Shares listed on the New York Stock Exchange) along with its wholly-owned subsidiary Snamprogetti resolved a $125 million SEC Foreign Corrupt Practices Act enforcement action concerning conduct in Nigeria.

On Friday, the SEC announced that ENI resolved another FCPA enforcement action – this one a $24.5 million enforcement action concerning conduct in Algeria by Saipem S.p.A. (a minority-owned and controlled subsidiary during the relevant time period). The conduct at issue in the enforcement action occurred 10 – 13 years ago.

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Friday Roundup

Roundup

30 minute sentence, scrutiny alert, monitors, and silly. It’s all here in the Friday roundup.

30 Minute Sentence

As highlighted here, Larry Puckett, one of several individuals associated with Alstom who was criminally charged in connection with an Indonesian bribery scheme, was recently sentenced. Puckett pleaded guilty, cooperated with the DOJ for many years, and testified for the government at the 2019 Hoskins trial.

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