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Friday Roundup

Roundup

Esquenazi speaks, checking in on Goldman Sachs, and released. It’s all here in the Friday roundup.

Esquenazi Speaks

In 2011, Joel Esquenazi was convicted of one count of conspiracy to violate the FCPA and wire fraud; seven counts of FCPA violations; one count of money laundering conspiracy; and 12 counts of money laundering for a bribery scheme involving Haiti Teleco. Esquenazi was sentenced to an FCPA record 15 years in prison and his conviction was affirmed by the 11th Circuit in 2014 (see here) resulting in the two factor control and function test for determining whether an enterprise is an “instrumentality” under the FCPA.

Esquenazi was recently released from prison due to COVID concerns to serve the remainder of his sentence at home. In this approximate 25 minute podcast with his appellate counsel (Markus Funk – Perkins Coie), Esquenazi talks about the circumstances of his case, the conduct of the trial court judge, his journey through the federal prison system and his time in prison (including over 7,000 hours of tutoring).

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SEC’s Recent FCPA Complaint May Reveal Benefits Of Company Compliance But Pleadings May Be Deficient

Analysis

A guest post from Arnall Golden Gregory LLP attorneys Cory Kirchert and Adriaen Morse. Previously both Kirchert and Morse were Senior Counsel in the SEC’s Enforcement Division.

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Introduction

The U.S. Securities and Exchange Commission (“SEC”) recently filed a case alleging violations of the anti-bribery provisions of U.S. securities laws that raises more questions than it answers. As most practitioners in this area know, press releases (or “litigation releases”) that accompany the announcement of new enforcement cases often discuss a company’s cooperation, in particular when the case came to the SEC’s attention via company self-disclosure or when the SEC wishes to signal that the company’s cooperation contributed to a low penalty or no penalty.

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SEC Charges Former Executive Director Of Goldman Sachs International With FCPA Offenses For Arranging A Bribery Scheme In Ghana On Behalf Of A Turkish Energy Company

Berko

Yesterday, the SEC announced the filing of a civil complaint charging Asante Berko (pictured – a former Executive Director of Goldman Sachs International) with Foreign Corrupt Practices Act violations and other charges for “orchestrating a bribery scheme to help a client [a Turkish energy company] win a government contract to build and operate an electrical power plant” in Ghana.

The Turkish energy company would appear to be Aksa Enerji (see here and here).

Of note, the SEC alleged that the “Holding Company” – that is Goldman Sachs – violated the FCPA’s anti-bribery provisions. However the SEC’s release states that Goldman Sachs “is not being charged.”

In summary fashion, the complaint alleges:

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Based On The Same Core Conduct Alleged In The 2018 Criminal Action, The SEC Also Brings Enforcement Action Against Former Goldman Executive Tim Leissner

Leissner

As highlighted in this prior post, in November 2018 the DOJ announced a Foreign Corrupt Practices Act and related enforcement action against Tim Leissner (the former Southeast Asia Chairman at Goldman Sachs) and others associated with Goldman Sachs for paying bribes to various Malaysian and Abu Dhabi officials in connection with 1Malaysia Development Berhad (1MDB), Malaysia’s state-owned and state-controlled investment development company.

Leissner pleaded guilty and was ordered to forfeit $43.7 million as a result of his crimes. As highlighted in this prior post, in March 2019 – based on the same core conduct – the Federal Reserve brought an enforcement action against Leissner in which he consented to a permanent ban from the banking industry and agreed to pay a $1.4 million fine.

Yesterday, the SEC returned to the same core action and announced an FCPA enforcement action against Leissner. The action was largely ceremonial as the SEC’s order requires Leissner to pay disgorgement of $43.7 million which will be offset by the amounts paid pursuant to the forfeiture order in the parallel criminal action.

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Friday Roundup

Roundup

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

Scrutiny Updates

Glencore

As highlighted in this prior post, in March the Commodity Futures Trading Commission issued an enforcement advisory concerning companies and individuals “that timely and voluntarily disclose to the Division violations of the Commodity Exchange Act involving foreign corrupt practices, where the voluntary disclosure is followed by full cooperation and appropriate remediation.”

Conventional wisdom was that this advisory just did not fall out of the sky, but was a reaction to something. In my own mind, that something was Glencore’s FCPA scrutiny which the company disclosed in July 2018 (see here).

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