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Issues To Consider From The Deutsche Bank Enforcement Action

Issues

This prior post highlighted the SEC’s $16.2 million Foreign Corrupt Practices Act enforcement action against Deutsche Bank – the latest FCPA enforcement action focused on alleged improper internship and hiring practices primarily involving the financial services industry.

This post continues the analysis by highlighting additional issues to consider.

Timeline

The company’s FCPA scrutiny reportedly began in mid-2013. Thus, from start to finish, Deutsche Bank’s FCPA scrutiny lasted an unconscionable six years.

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Next Up – Deutsche Bank Hands Over $16.2 Million To Uncle Sam

deutsche

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 herehere, and here for prior posts). Then, it was Credit Suisse in July 2018 for $77 million (see 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 Deutsche Bank as the SEC announced yesterday that the German bank with shares traded on the NYSE will pay approximately $16.2 million “to settle changes that it violated the FCPA by hiring relatives of foreign government officials [in both the Asia Pacific Region and Russia] in order to improperly influence them in connection with investment banking business).

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Issues To Consider From The TechnipFMC Enforcement Action

Issues

This previous post went in-depth into the net $81.9 million DOJ FCPA enforcement action against TechnipFMC and how the company joined the FCPA repeat offender list. This post continues the analysis by highlighting additional issues to consider.

Statute of Limitations

Pardon me for being “that guy” but the bulk of the conduct at issue in the enforcement action (both the Technip USA information and plea involving alleged conduct in Brazil and the TechnipFMC  information and DPA involving alleged conduct in Iraq) took place between 2003 and 2010 (in other words approximately 10 – 15 years prior to the enforcement action).

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TechnipFMC Joins FCPA Repeat Offender Club, Resolves Net $81.9 Million DOJ FCPA Enforcement Action, SEC Enforcement Action Forthcoming, Individual Criminally Charged

technipfmc

That’s a dense headline, but there was much at play in this DOJ announcement from earlier this week.

First, Technip joined the ever growing list of FCPA repeat offenders (see here) as the company previously resolved a $340 million FCPA enforcement action in 2010 concerning conduct at Bonny Island, Nigeria. (See here and here for prior posts). For good measure, as highlighted in this prior post, in 2016 FMC Technologies resolved a so-called non-FCPA, FCPA enforcement action.

Second, most FCPA enforcement actions against issuers that include a DOJ and SEC component are resolved on the same day, however this week’s development was DOJ only and this company press release states “TechnipFMC has reached an agreement in principle with the SEC Staff, subject to final SEC approval.”

Third, in connection with the same core conduct alleged in the DOJ enforcement action the DOJ also criminally charged Zwi Skornicki (a citizen of Brazil).

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SEC Finds That Former Panasonic Executive Authorized Conduct Causing Company’s FCPA Violations, Another Former Executive Found To Engage In Improper Revenue Recognition Practices

Margis

As highlighted in prior posts (here, here and here) in April 2018 the DOJ and SEC announced a $280 million Foreign Corrupt Practices Act enforcement action against Japan-based Panasonic Corp.  and a U.S. subsidiary Panasonic Avionics Corp. (PAC).

In the words of the government “between 2007 and 2013, PAC employees, including senior executives, engaged in a scheme to retain consultants for improper purposes other than for providing actual consulting services.”

Earlier this week, the SEC returned to the same core conduct to bring administrative actions (here and here) against Paul Margis (pictured – a former President and CEO of PAC) and Takeshi Uonaga (PAC’s former CFO). The Margis action finds that he authorized various conduct giving rise to the company’s FCPA liability, whereas the Uonaga matter is materially different in that it is a revenue recognition matter.

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