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FCPA Flash – A Conversation With Thomas Gorman

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 Thomas Gorman, a lawyer with Dorsey & Whitney. Prior to private practice, Gorman spent several years at the SEC including as Senior Counsel in the SEC’s Division of Enforcement. Gorman focuses his practice on SEC and related public company issues including those arising under the Foreign Corrupt Practices Act. In addition, Gorman founded and runs the informative SEC Actions blog.

In the episode, Gorman talks about the FCPA’s books and records and internal controls provisions using the recent Las Vegas Sands enforcement action as a guide (see prior posts here and here). In addition, Gorman responds to the following questions: whether the books and records and internal controls provisions are essentially standardless and whether the SEC, with the perfect benefit of hindsight, advances expansive theories of liability; and whether with ever-expanding theories of enforcement, the time has come for an issuer to put the SEC to its burden of proof in an FCPA enforcement action.

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Issues to Consider From The Nortek And Akamai Technologies Enforcement Actions

Issues

Previous posts here and here highlighted the SEC’s recent Foreign Corrupt Practices Act enforcement actions against Nortek and Akamai Technologies.

This previous post highlighted the DOJ’s so-called “declination” letters and posed the salient question – what viable criminal charges did the DOJ actually “decline”?

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

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Friday Roundup

Roundup

DOJ seeks legislative changes, a focus on FCPA Inc., credit ratings, across the pond, scrutiny update, and for the reading stack.

It’s all here in the Friday Roundup

DOJ Seeks Legislative Changes

The DOJ’s efforts to eradicate corruption and bribery is broader than just Foreign Corrupt Practices Act enforcement and includes: “public integrity prosecutions, bribery prosecutions, prosecutions of taxpayers who seek to conceal foreign accounts, money laundering prosecutions, [and its] Kleptocracy Initiative.”

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Whistled For A Foul: Las Vegas Sands Agrees To Pay $9 Million To Resolve Books And Records And Internal Controls Action

CBA

The Foreign Corrupt Practices Act has always been a law much broader than its name suggests.

In addition to anti-bribery provisions, the FCPA also contains more generic books and records and internal controls provisions. While there are a few sentences in this 15 page administrative order released yesterday against Las Vegas Sands (LVS) that touch upon issues relevant to the anti-bribery provisions, the enforcement action was on balance a pure books and records and internal controls action.

Among other things, the SEC found that LVS lacked supporting documentation or appropriate authorization concerning the company’s involvement with a Chinese basketball team, the purchase of a building, a high-speed ferry service, and other aspects of its casino business in Macau.

The substance of yesterday’s enforcement action has been in the public domain for years. (See this 2012 New York Times article and this 2012 Wall Street Journal article). Indeed, FCPA Professor has been following LVS’s scrutiny since November 2010 upon the “noisy exist” of Steven Jacobs (the former President of Macau Operations) from the company. (See here for the original post).

In summary fashion, the order states:

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SEC Announces Blockbuster FCPA Enforcement Actions Against ALL Issuers

wow

[Today is April 1st, commonly referred to as April Fools Day. Please keep this in mind when reading this post. In other words, this post should not be taken literally. Even though this post is presented as satire, readers are encouraged to ponder the issues raised.]

Earlier today the SEC announced Foreign Corrupt Practices Act enforcement actions against all issuers subject to the FCPA.

Total SEC recovery in the enforcement actions – all resolved via administrative cease and desist orders and thus not subject to any judicial scrutiny was – approximately $925 billion dollars.

In announcing the enforcement actions, an SEC spokesperson stated:

“Using our data analytics tools, the SEC determined that it was more likely than not – given the SEC’s current FCPA enforcement theories – that all issuers subject to FCPA were in violation of the FCPA’s anti-bribery provisions, or at the very least the FCPA’s books and records and internal controls provisions.”

Pressed for more specifics on the enforcement actions, the SEC spokesperson stated:

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