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So Much For That Tone At The Top Thing As SEC Returns To Bring Enforcement Action Against SQM’s Former CEO

gonzelez

Foreign Corrupt Practices Act enforcement often seems more robust than it actually is because, in the relatively rare instances in which there is an individual prosecution in connection with a corporate action, the individual action often (but not always) occurs long before or long after the corporate action. Many FCPA Inc. participants, who have a vested interest in portraying more not less FCPA enforcement, count these occurrences as multiple enforcement actions when in reality they are the same core enforcement action. (This article highlights this dynamic as well as other dubious and haphazard FCPA Inc. counting methods).

Reflective of the above dynamic, as highlighted in prior posts here and here in January 2017 the DOJ and SEC announced a $30.5 million enforcement action against Sociedad Quimica y Minera de Chile S.A. (SQM), a chemical and mining company based in Chile, in relation to its interactions with Chilean officials. The bulk of the enforcement action involved use of the CEO’s “discretionary fund to direct payments to Chilean politicians, political candidates, and individuals connected to them “many of which violated Chilean tax law and/or campaign finance limits” and falsely recording such payments in SQM’s books and records.

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Second Circuit Rejects DOJ’s Expansive Jurisdictional Theory Of Prosecution In U.S. v. Hoskins

Judicial Decision

Appellate decisions construing the Foreign Corrupt Practices Act are extremely rare. Thus, many in the FCPA community have been awaiting the Second Circuit’s long-awaited (oral argument was held in March 2017 – see here) decision in U.S. v. Hoskins.

In this decision, the court rejected the DOJ’s expansive jurisdictional theory of prosecution against Lawrence Hoskins, a U.K. national. In many respects, the Second Circuit’s decision was based on the FCPA’s legislative history – demonstrating once again that the legislative history matters (see here for a prior post).

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An FCPA Enforcement Action That Slipped Through The Cracks

petroecuador

There is not much that goes unnoticed by the Foreign Corrupt Practices Act media.

However, this April 19, 2018 indictment of Frank Roberto Chatburn Ripalda (a dual United States and Ecuadorian citizen) appears to have slipped through the cracks.

The indictment alleges that between 2013 and 2015, Chatburn conspired with others by making corrupt payments to PetroEcuador officials in order to obtain and retain contracts for Galileo (described as an Ecuadorian company that provided services in the oil and gas industry) from PetroEcuador.

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Friday Roundup

Roundup

Motion to dismiss filed, guilty plea, role reversal, adequate procedures, for the reading stack, and viewing suggestion. It’s all here in the Friday roundup.

Motion to Dismiss Filed

As highlighted in this prior post, in November 2017 the DOJ announced that Chi Ping Patrick Ho (of Hong Kong, China) and Cheikh Gadio (of Senegal) were criminally charged with conspiring to violate the Foreign Corrupt Practices Act, violating the FCPA, conspiring to commit international money laundering, and committing international money laundering.

Earlier this week, Ho filed this motion to dismiss certain of the FCPA and money laundering charges.

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