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Delisting Of U.S. Securities As A Potential Negative Collateral Consequence Of Expansive FCPA Enforcement Against Foreign Issuers

stock market

Foreign issuers (that is companies with shares traded on a U.S. exchange) are certainly subject to the Foreign Corrupt Practices Act.

The mere listing and trading is all that is required under the FCPA’s books and records and internal controls provisions for jurisdiction.

In contrast the anti-bribery provisions, as applicable to foreign issuers, have the following jurisdictional requirement: “use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance” of a bribery scheme. Thus, as frequently highlighted on these pages, it is a myth that the FCPA’s anti-bribery provisions are extraterritorial as to foreign issuers. Nevertheless, it is true that the FCPA enforcement agencies take a very broad view (in certain instances in apparent conflict with Supreme Court decisions) of its jurisdiction over foreign issuers.

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FCPA Flash – A Conversation With FCPA Violator Frederic Pierucci Regarding FCPA Enforcement Against European Companies

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The FCPA Flash podcast provides in an audio format the same fresh, candid, and informed commentary about the Foreign Corrupt Practices Act and related topics as readers have come to expect from written posts on FCPA Professor.

This FCPA Flash episode is a conversation with Frederic Pierucci. In April 2013, Pierucci (a French national) was among a group of current or former Alstom executives criminally charged in connection with an alleged bribery scheme in Indonesia. Pierucci ultimately plead guilty to FCPA offenses. Upon release from U.S. prison, Pierucci authored a book titled “The American Trap.” During the podcast, Pierucci talks about his book, what motivated him to write the book, and his views that the FCPA is a “tool to destabilize” European companies and how the U.S.’s use of the FCPA is like “underground economic warfare.” During the podcast, I take issue with certain of Pierucci’s comments (for instance 7 U.S. companies have resolved FCPA enforcement actions over $100 million not the number Pierucci suggests) and the podcast contains a good back-and-forth discussion.

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FCPA Flash Podcast – A Conversation With Philip Urofsky Regarding 2018 FCPA Trends And Developments

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The FCPA Flash podcast provides in an audio format the same fresh, candid, and informed commentary about the Foreign Corrupt Practices Act and related topics as readers have come to expect from written posts on FCPA Professor.

This FCPA Flash episode is a conversation with Philip Urofsky (Shearman & Sterling and a former FCPA enforcement official at the DOJ). During the podcast, Urofsky elaborates on various issues such as jurisdiction over foreign actors and parent-subsidiary issues found in the firm’s always informative FCPA Digest. Urofsky also opines on what the FCPA enforcement landscape might look like if business organizations would put the government to its burden of proof in enforcement actions.

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Friday Roundup

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Scrutiny alerts and updates, overstating, and for the reading stack. It’s all here in the Friday roundup.

Scrutiny Alerts and Updates

Fresenius

As highlighted in this previous post, German healthcare firm Fresenius Medical Care AG (a company with shares traded on the NYSE) has been under FCPA scrutiny since 2012 (no that is not a typo). As highlighted in this previous post, earlier this year the company disclosed:

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Brazil State-Owned Co. Allegedly Facilitates Payments To Brazilian Politicians And Political Parties And U.S. Collects Net $170 Million In FCPA Enforcement Action

Uncle Sam3

This morning the DOJ and SEC announced (here and here) that Petrobras, a Brazilian state-owned and state-controlled energy company, entered into agreements with U.S. and Brazilian authorities “in connection with Petrobras’s role in facilitating payments to politicians and political parties in Brazil, as well as a related Brazilian investigation.”

After various credits and deductions for a related law enforcement action in Brazil, the net FCPA settlement is approximately $170 million ($85.3 million DOJ, $85.3 million SEC). Brazil will collect $682.6 million. The remainder of this post provides an in-depth summary of the enforcement action.

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