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A Focus On DOJ Individual Actions

Criminal Law

This recent post focused on SEC individual FCPA actions and this post highlights certain facts and figures concerning the DOJ’s prosecution of individuals for Foreign Corrupt Practices Act offenses in 2016 and historically.

As highlighted numerous times on FCPA Professor over the past several years, the DOJ frequently talks about the importance of individual FCPA prosecutions. During her tenure, Assistant Attorney General Leslie Caldwell (she recently left the DOJ) has stated that “certainly…there has been an increased emphasis on, let’s get some individuals” and that it is “very important for [the DOJ] to hold accountable individuals who engage in criminal misconduct in white-collar (cases), as we do in every other kind of crime.”

During his tenure DOJ FCPA Unit Chief Patrick Stokes (he recently left the DOJ) has said that the DOJ is “very focused” on prosecuting individuals as well as companies and that “going after one or the other is not sufficient for deterrence purposes.”

Against this backdrop, what do the facts actually show?

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A Focus On SEC Individual Actions

SEC

After a wild week or so in 2017 Foreign Corrupt Practices Act enforcement, back to some 2016 FCPA enforcement statistics.

This previous post highlighted various facts and figures from 2016 SEC FCPA enforcement actions against issuers.

As highlighted in the prior post, of the 24 corporate SEC FCPA enforcement actions from 2016, 7 (29%) have involved, at present, related SEC charges or findings against company employees.

In 2016, the SEC charged or found that 8 individuals violated the FCPA.

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Bahn, Et Al – Not A Typical FCPA Enforcement Action

landmark72

Last week the DOJ announced Foreign Corrupt Practices Act, and related charges, against four individuals for their roles in a scheme to pay $2.5 million in bribes to facilitate the $800 million sale of a commercial building in Vietnam (the so-called Landmark 72 pictured at left) to a Middle Eastern sovereign wealth fund.

It certainly was not a typical FCPA enforcement action.

In fact it was downright strange in that the bribery scheme was unsuccessful and the third party intended to facilitate the bribery scheme simply pocketed the money for himself.

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Further To The Clustering Phenomenon, DOJ Announces Additional Guilty Pleas In Connection With PDVSA Bribery Scheme

cluster

Few corporate Foreign Corrupt Practices Act enforcement actions involve related criminal charges against company employees.

Perhaps sensitive to its individual FCPA prosecution numbers, the DOJ sure seems to cluster enforcement around a few discreet instances of bribery almost always involving private business entities.

This dynamic was first highlighted in this 2014 post and further discussed in this 2016 statistical post.

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In-Depth – General Cable Resolves $75.8 Million FCPA Enforcement Action, Former Senior VP Also Resolves SEC Action

generalcable

Don’t yet close the books on 2016 Foreign Corrupt Practices Act enforcement.

Yesterday, the DOJ and SEC announced (here and here) an FCPA (and related) enforcement action against Kentucky-based General Cable Corporation (a manufacturer and distributor of cable and wire). The conduct at issue occurred in Angola, Bangladesh, Indonesia, Thailand, China, and Egypt.

The $75.8 million enforcement action involved a DOJ non-prosecution agreement in which the company agreed to pay an approximate $20.5 million penalty and an SEC administrative cease and desist order in which the company agreed to pay approximately $55.3 million in disgorgement and prejudgment interest.

In addition, the SEC also announced that Karl Zimmer, General Cable’s former Senior Vice President responsible for sales in Angola, agreed to pay a $20,000 civil penalty without admitting or denying the SEC’s findings that he knowingly circumvented internal accounting controls and caused FCPA violations when he approved certain improper payments.

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