This post highlighted the SEC’s recent $8.2 million FCPA enforcement action against Beam Inc. (now known as Beam Suntory Inc.) concerning conduct in India. This post continues the analysis by highlighting additional issues to consider.
Time Line
As highlighted in this prior post, Beam was under FCPA scrutiny since late 2012. Thus from start to finish, its FCPA scrutiny lasted approximately 6 years.
First it was alcoholic beverage company Diageo based on conduct in India and elsewhere (see here).
Then it was alcoholic beverage company ABInBev based on conduct in India (see here).
Yesterday, the SEC announced yet another Foreign Corrupt Practices Act enforcement action against an alcoholic beverage company for conduct in India.
This time it was Beam Inc. (now known as Beam Suntory Inc.) which up until April 2014 had shares traded on the New York Stock Exchange until Suntory Holdings Limited (a Japanese company) acquired Beam which thereafter delisted from the NYSE.
One instance of Foreign Corrupt Practices Act scrutiny that has attracted significant investor interest over the past few years (because it occurred in the context of an M&A transaction) involved Alere Inc.
As highlighted in this previous post, the company disclosed in August 2015 that it received an SEC subpoena inquiring about its foreign business practices. Thereafter, Alere announced that it would be acquired by Abbott in a $5.8 billion transaction.
Those who were predicting that FCPA enforcement would wane in a Trump administration were encouraged to take a deep breath. (See here for the prior post). Among other things, it was noted that “if you believe that FCPA enforcement will decline in a Trump administration then you presumably must think that the DOJ and the SEC will start refusing to “process” corporate voluntary disclosures” (the single largest source of corporate FCPA enforcement actions).
Here is a fact to contemplate. The number of DOJ corporate FCPA enforcement actions in the first five months of the Trump administration (2 – both originating from corporate voluntary disclosures) equals the number of DOJ corporate FCPA enforcement actions in 2015 (2).
Yesterday, the DOJ once again quietly updated its FCPA Pilot Program “declinations” page to release this June 21st letter agreement addressed to Nathaniel Edmonds (Paul Hastings) counsel for CDM Smith Inc. (“CDM Smith”), a privately held engineering and construction firm incorporated and headquartered in Boston, Massachusetts.
[This post is part of a periodic series regarding “old” FCPA enforcement actions]
As highlighted in this prior post, in 2001 KPMG Siddharta Siddharta & Harsono (KPMG-SSH) and Sonny Harsono resolved a joint DOJ/SEC civil FCPA enforcement regarding alleged improper payments in connection with an Indonesia tax assessment.
As detailed in the prior post, it was a unique FCPA enforcement action at the time (believed to be the first time the DOJ/SEC had ever brought an FCPA action against a professional services firm – i.e. a law firm or accounting firm) and still remains unique in that the DOJ/SEC are believed to have never again brought an FCPA enforcement action against a professional services firm. As further detailed in the prior post, KPMG-SSH was an agent of Baker Hughes and thus it was not surprising that a related FCPA enforcement action against Baker Hughes soon followed.
