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SEC Director Of Enforcement Ceresney On …

Ceresney

Yesterday’s post highlighted comments made by Deputy Attorney General Sally Yates at a recent Foreign Corrupt Practices Act event and this post provides equal time to comments made by SEC Director of Enforcement Andrew Ceresney at the same event.

Similar to the DOJ speech, much of Ceresney’s speech represents the same old, same old something even he acknowledged during his speech.

When reading Ceresney’s comments about the importance of individual FCPA prosecutions keep in mind the following facts. In 2016 there have been 21 SEC corporate FCPA enforcement actions and 15 actions (72%) have not resulted (at least yet) in any related FCPA charges against company employees. This figure is generally consistent with the overall figure since 2008 in which approximately 80% of SEC corporate FCPA enforcement actions have not resulted in any related FCPA charges against company employees.

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Same Old, Same Old From The DOJ On Individual FCPA Prosecutions

DOJ2

In running a Foreign Corrupt Practices Act news source for seven years running, there is a “been there, done that” aspect to some of the writing.

For instance, every late November FCPA Professor highlights speeches by DOJ and SEC enforcement officials at a certain FCPA conference run by a for-profit conference company which engages in the disgraceful practice of marketing our public officials to draw attendance to its paid event as if the public officials are a commodity they own. (See here, here, and here for prior posts regarding this practice).

Why DOJ and SEC officials allow themselves to be used in such a way is beyond me.

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Potpourri

Potpourri

Individual FCPA Charges

One reason to read FCPA Professor is to stay ahead of the curve.

For instance, this October 2015 post highlighted alleged bribery at the United Nations charging John Ashe (described as having various positions at the U.N. including serving as the Permanent Representative of Antigua to the U.N. and recently serving as the President of the U.N. General Assembly) and others with a variety of criminal offenses based on allegations that payments were made to Ashe in connection with a U.N. sponsored conference center in Macau, China and to influence business interactions with Antiguan government officials.

The post noted that although the alleged bribery was charged under 18 USC 666 (theft or bribery concerning programs receiving federal funds) on account of the U.N. receiving U.S. federal government funds, Ashe was likely a “foreign official” under the FCPA given that the definition of “foreign official” includes individuals associated with “public international organizations” and the U.N. has been designated as such an organization.

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SEC Brings Historic FCPA Enforcement Action Against Daniel Och (CEO And Chairman Of Och-Ziff) and Joel Frank (CFO)

Daniel Och

In connection with the $412 million Foreign Corrupt Practices Act enforcement action against Och-Ziff (the 4th largest of all-time – stay tuned for additional coverage as original source documents become available), the SEC also found that Daniel Och (CEO and Chairman of Och-Ziff – pictured) was a cause of certain of the company’s FCPA books and records violations and that Joel Frank (CFO) was a cause of certain of the company’s FCPA books and records and internal controls violations.

This represents, what is believed to be, the first time in FCPA history that the SEC also found the current CEO and CFO of the issuer company liable for company FCPA violations.

Without admitting or denying the SEC’s findings, Och agreed to pay approximately $2.2 million ($1,900,000 – reflecting his estimated share of gain to Och-Ziff resulting from the transactions with a Democratic Republic of Congo Partner and $273,718 in prejudgment interest). The $2.2 million Och agreed to pay is the largest settlement amount in FCPA history by an individual in an SEC action.

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SEC Brings FCPA Enforcement Action Against Former Executive Of Harris Corp’s Dissolved Chinese Subsidiary

Ping

As highlighted in this prior post, in April 2011 Harris Corporation completed an acquisition of Carefx and in the process acquired its subsidiaries including Carefx China. In connection with its integration activities and the subsequent audit of the financials of the Carefx China operations, Harris Corp. became aware that certain entertainment, travel and other expenses in connection with the Carefx China operations may have been incurred or recorded improperly. In response, Harris Corp. voluntarily disclosed to the DOJ and SEC.

As highlighted in this prior post, a few months ago Harris Corp. disclosed that “during the second quarter of fiscal 2016, the DOJ advised us that they have determined not to take any action against us related to this matter.” The same disclosure stated that the company is “continuing to cooperate with the SEC regarding its investigation.”

In the meantime, earlier this week the SEC announced this administrative action finding that Jun Ping Zhang (pictured – a U.S. citizen and former Chairman and CEO of CareFx China who was terminated in mid-2012) violated the Foreign Corrupt Practices Act. Zhang is currently Senior Vice President, Product Innovation and Chief Technology Officer at MedeAnalytics. (See also here).

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