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The Supreme Court’s Recent Unanimous Decision In A Restitution Case Provides Yet Another Reason Not To Voluntarily Disclose

supremecourt

The scenario is relatively common. Whether in the Foreign Corrupt Practices Act context or otherwise, an individual acts contrary to the law and when his or her conduct is discovered various business organizations impacted by the illegal activity conduct an internal investigation.

The question arises: if the individual engaged in the illegal activity is convicted, may the impacted business organizations recover from the individual internal investigation expenses under the Mandatory Victims Restitution Act (MVRA) and, if so, under what circumstances? In recent years, circuit courts have split on the relevant issues.

Last week though the Supreme Court provided clarity in Lagos v. U.S. In the unanimous decision authored by Justice Breyer, the court concluded that the words “investigation” and “proceedings” in the MVRA are limited to government investigations and criminal proceedings. After excerpting the case, this post highlights how business organizations can best position themselves for MVRA restitution in certain FCPA matters by not voluntarily disclosing.

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Friday Roundup

Roundup

A home run, quotable, monitors, up north, scrutiny alerts and updates, irksome, and for the reading stack. It’s all here in the Friday roundup.

Home Run

The latest issue of the always informative FCPA Update from Debevoise & Plimpton (released by the way on the opening day of the Major League Baseball season) hits a home run.

The lead article by Paul Berger (former Associate Director of the SEC’s Enforcement Division) concerns the recent Elbit Imaging enforcement action (see here for the prior post) and states in pertinent part:

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Friday Roundup

Roundup

Ironic, scrutiny update, and for the reading stack. It’s all here in the Friday roundup.

Ironic

As highlighted in this previous post, in February 2016 SAP (a German company with American Depository Shares registered with the SEC) resolved a $3.9 million FCPA enforcement action based on conduct in Panama and was ordered to cease and desist from committing or causing any violations and any future violations of the FCPA’s books and records and internal controls case.

Fresh off its 2016 FCPA enforcement action, SAP again became the subject of FCPA scrutiny. (See here for the prior post). Indeed, yesterday the Wall Street Journal reported:

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Internal Investigations: A Challenging Decision By The English Courts

Judicial Decision

A guest post today from White & Case attorneys Jonathan Pickworth, Alex Davey and Mhairi Fraser.

*****

In recent years the UK Serious Fraud Office (SFO) has been making aggressive statements regarding assertions of legal professional privilege by corporates and has launched two significant legal cases in this area.

The first of these challenges occurred in the criminal courts regarding the Barclays Qatar investigation, which saw Barclays eventually partially waive privilege and provide the SFO with the documents requested, rather than having an acrimonious court battle on the topic – something the SFO was prepared to do. The second was a civil test case, instigated by the SFO in the UK High Court, to challenge assertions of privilege in the case of The Serious Fraud Office v ENRC.

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Bio-Rad Internal Investigation Documents Highlight The Lack Of Transparency In FCPA Enforcement

Foggy

The DOJ and SEC frequently speak about the importance of transparency in Foreign Corrupt Practices Act enforcement – as well they should because transparency is a fundamental tenet of the rule of law.

Those in the know however have long recognized that FCPA enforcement is seldom transparent. However, assessing this is nearly impossible in most instances because FCPA internal investigation documents are seldom in the public domain.

Yet, as highlighted in this post, certain Bio-Rad FCPA internal investigation documents were recently publicly disclosed as exhibits in an FCPA-related whistleblower action and the documents call into question the transparency of the FCPA enforcement action against the company.

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