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In Depth Into The $519 Million Teva FCPA Enforcement Action

Copaxone

Records continue to be set as 2016 Foreign Corrupt Practices Act enforcement enters its final days.

Yesterday, the DOJ and SEC announced (here and here) a $519 million enforcement action against Teva Pharmaceutical Industries Ltd. (an Israeli company with American Depository Receipts traded in the U.S.) and a related entity. The settlement amount included a $283 million DOJ component and a related $236 million SEC component.

The action is believed to be the first-ever FCPA enforcement action against an Israeli company and by far the largest-ever FCPA enforcement action against a pharmaceutical company. (The $70 million 2011 enforcement action against Johnson & Johnson is second on that list). You better go ahead and update your top ten list again because the Teva enforcement action is the 4th largest of all-time. (Odebrecht / Braskem held that spot for less than 24 hours and is now bumped to 5th largest FCPA settlement amount of all-time).

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Odebrecht / Braskem Bribery Schemes Net Approximate $420 Million FCPA Enforcement Action

oder

Yesterday, the DOJ and SEC announced (here and here) a Foreign Corrupt Practices Act enforcement action against Odebrecht S.A. (a Brazilian holding company) and Braskem S.A. (a Brazil-based petrochemical company in which Odebrecht owns 50.1% of the voting shares, 38.1% of the total share capital and which Odebrecht “effectively controlled” according to the DOJ). Braskem has American Depositary Receipts registered with the SEC and traded on the NYSE and thus the enforcement action also included an SEC component.

Perhaps because of the less than clear DOJ release (clear once one actually reads the original source documents), this action is being reported in various places as a $3.5 billion FCPA enforcement action. While that figure represents the overall global settlement amount (Brazil and Swiss law enforcement also brought related actions), yesterday’s action was most certainly not a $3.5 billion FCPA enforcement action. Not even close.

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Friday Roundup

Roundup

Checking in on the Hoskins appeal, checking in up north, checking in across the pond, for the younger generation, if that would happen in a company, and another one dismissed. It’s all here in the Friday roundup.

But first, if you got your FCPA from FCPA Professor in 2016, please consider a donation to help defray the yearly costs of running this free public website.

Checking In on the Hoskins Appeal

This previous post highlighted how U.S. District Court Judge Janet Bond Arterton (D.Conn) significantly trimmed the DOJ’s criminal FCPA enforcement action against Lawrence Hoskins. Unhappy with the decision, the DOJ filed a motion for reconsideration which Judge Arterton denied (see here).

The DOJ appealed to the Second Circuit and this previous post highlighted the DOJ’s opening brief. Recently Hoskins filed this response which states in pertinent part.

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FCPA Flash – A Conversation With Andrew Levine Regarding Nu Skin, Charitable Donations, And Strict Liability Enforcement

FCPA Flash

The FCPA Flash podcast provides in an audio format the same fresh, candid, and informed commentary about the Foreign Corrupt Practices Act and related topics as readers have come to expect from the written posts on FCPA Professor.

This FCPA Flash episode is a conversation with Andrew Levine (Debevoise & Plimpton). Levine is a primary author of the always informative Debevoise & Plimpton FCPA Update and a recent update included an article about the recent Nu Skin FCPA enforcement action that caught my eye.

As highlighted in this prior post, the SEC found that Nu-Skin violated the FCPA’s books and records and internal controls provisions based on a single charitable donation that its Chinese subsidiary made under circumstances in which subsidiary employees concealed relevant information from the parent company and otherwise acted inconsistent with parent company instructions. While the $765,000 settlement amount was not notable, often less high-profile FCPA enforcement actions present the most interesting and troubling issues.

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United Airlines Resolves Books And Records And Internal Controls Action Based On Domestic Bribery And The SEC’s Inconsistencies Are Once Again Highlighted

united

If the above headline is confusing, you’ve forgotten (as it seems some commentators have) that the Foreign Corrupt Practices Act is a law much broader than its name suggests.

Because of the FCPA’s generic books and records and internal controls provisions, most FCPA enforcement actions (as a technical matter) do not involve any allegations or findings regarding foreign bribery. (This dynamic – termed non-FCPA FCPA enforcement actions for lack of a better term – has been highlighted in prior posts here, here and here).

Case in point is last week’s SEC enforcement action against United Continental Holdings Inc., the parent company of United Airlines Inc.

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