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Do Your Hiring And Employment Practices Live Up To The DOJ’s New Expectations?

HR

An aspect of Foreign Corrupt Practices Act compliance that likely drives many compliance professionals crazy is that the FCPA’s internal controls provisions lack specifics and are thus, for the most part, standardless.

The provisions state that issuers shall “devise and maintain a system of internal accounting controls sufficient to provide reasonable assurances that” certain limited financial objectives are met.

This standardless aspect of the internal controls provisions was highlighted in the notable World-Wide Coin decision (believed to be the only substantive judicial decision to construe the internal controls provisions). In the decision, the judge stated:
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Issues To Consider From The Credit Suisse Enforcement Action

Issues

This post highlighted the recent $77 million Foreign Corrupt Practices Act enforcement action against Credit Suisse concerning its internship and hiring practices involving family members of alleged Chinese “foreign officials.” This post continues the analysis by highlighting additional issues to consider.

Timeline

Credit Suisse’s FCPA scrutiny appears to have begun in late 2013 (see here). Thus from start to finish, its scrutiny lasted approximately 4.5 years.

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Next Up – A $77 Million Enforcement Action Against Credit Suisse

CS

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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Canada-Based Kinross Gold Corp. Resolves Approximate $1 Million SEC Action Because Its Acquired Indirect African Subsidiaries Had Deficient Internal Controls

Kinross

Silly you for believing certain commentator hype that the Trump SEC would stop enforcing the Foreign Corrupt Practices Act or for thinking that the general lull in SEC corporate enforcement during the fourth quarter of 2017 meant anything.

In the second SEC corporate FCPA enforcement action in the last 2.5 weeks (see here for the prior Elbit Imaging action), the SEC announced yesterday that Canada-based Kinross Gold Corporation (a company with shares traded on the New York Stock Exchange) resolved an enforcement action “arising from the company’s repeated failure to implement adequate accounting controls of two African subsidiaries.” Without admitting or denying the SEC’s finding in this administrative order, Kinross agreed to, among other things, pay a $950,000 civil penalty.

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Issues To Consider From The SBM Offshore Enforcement Action

Issues

This previous post went in-depth into the $238 million DOJ Foreign Corrupt Practices Act enforcement action against Netherlands-based SBM Offshore for alleged bribery schemes in Brazil, Angola, Equatorial Guinea, Kazakhstan and Iraq.

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

DOJ Explains Its Original “Declination”

As highlighted in the original post, in 2014 SBM Offshore resolved a $240 million Dutch law enforcement action alleging bribery schemes in Equatorial Guinea, Angola and Brazil between 2007 through 2011. In connection with that action, SBM Offshore disclosed: “the United States Department of Justice has informed SBM Offshore that it is not prosecuting the Company and has closed its inquiry into the matter.”

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