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SEC Finally Announces Its FCPA Enforcement Action Against Legg Mason

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Prior posts here and here highlighted the DOJ’s June FCPA enforcement action against Legg Mason regarding business conduct in Libya. It was noted in the prior post that FCPA enforcement actions against issuers that involve a DOJ and SEC component are almost always announced on the same day. Yet for some reason, back in June the i’s were not dotted or the t’s crossed at the SEC and the DOJ’s June enforcement action clearly had a placeholder for the forthcoming SEC prong.

That happened earlier today as the SEC finally announced its enforcement action.

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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”

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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

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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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SEC Director Of Enforcement Ceresney On …

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Yesterday’s post highlighted comments made by Deputy Attorney General Sally Yates at a recent Foreign Corrupt Practices Act event and this post provides equal time to comments made by SEC Director of Enforcement Andrew Ceresney at the same event.

Similar to the DOJ speech, much of Ceresney’s speech represents the same old, same old something even he acknowledged during his speech.

When reading Ceresney’s comments about the importance of individual FCPA prosecutions keep in mind the following facts. In 2016 there have been 21 SEC corporate FCPA enforcement actions and 15 actions (72%) have not resulted (at least yet) in any related FCPA charges against company employees. This figure is generally consistent with the overall figure since 2008 in which approximately 80% of SEC corporate FCPA enforcement actions have not resulted in any related FCPA charges against company employees.

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