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Issues To Consider From The Telia Enforcement Action

Issues

This previous post went in-depth into the Telia Foreign Corrupt Practices Act enforcement action which contemplates a net $483 million settlement (after accounting for various credits and deductions for contemplated Swedish and Dutch enforcement actions) – the 5th largest net FCPA settlement of all-time.

Set forth below are several additional issues to consider from the enforcement action.

No Books and Records Findings

Off the top of my head, I can recall only one prior instance (BNY Mellon) of an SEC FCPA enforcement action not involving books and records violations or findings. The Telia action is the second instance which is odd given that the SEC found that the “bribe payments were funneled through payments for sham lobbying and consulting services to a front company controlled by the official.”

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FCPA Flash – A Conversation With David Bitkower (Former Principal Deputy Assistant Attorney General)

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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 written posts on FCPA Professor.

This FCPA Flash episode is a conversation with David Bitkower. Earlier this year, Bitkower left the DOJ where he served as Principal Deputy Assistant Attorney General for the Criminal Division, the second-highest ranking position in the division. In the podcast, Bitkower (currently a partner at Jenner & Block) discusses his recent article “DOJ Must Beware of Unintended Consequences, As Multilateral Settlements Rise.” Other topics discussed include: whether it is ever appropriate for the U.S. to bring FCPA enforcement actions against foreign companies from OECD Convention countries (see here for the prior post), and whether the FCPA (as it approaches 40) has been successful in achieving its stated objectives.

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Relevant To The Motions To Dismiss Filed In SEC v. Cohen & Baros

relevant

Yesterday’s post went in-depth into the recent motions to dismiss filed in SEC v. Cohen & Baros (a rare instance in which the SEC is being put to its burden of proof in a Foreign Corrupt Practices Act enforcement action).

As highlighted in the post, the disputed legal issues largely center around statute of limitations and (as relevant to Baros a foreign national defendant) general personal jurisdiction issues as well as specific FCPA jurisdictional issues.

There are several previously decided cases cited in the parties’ briefs that are relevant to the issues in dispute and to get you up to speed on these issues, this post highlights those cases (all previously covered by FCPA Professor).

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Motions To Dismiss Fully Briefed In SEC v. Cohen & Baros

Judicial Decision

As highlighted in this prior post, in January 2017 the SEC filed a civil complaint against former Och-Ziff executives Michael Cohen and Vanja Baros alleging the same core conduct as the DOJ and SEC’s September 2016 enforcement action against Och-Ziff.

The prior post noted that the defendants would be mounting a defense and further noted that the SEC is rarely put to its burden of proof in FCPA enforcement actions (corporate or individual). Indeed, the SEC has never prevailed in FCPA history when put to its ultimate burden of proof.

Late last week, the briefing on the motions to dismiss appeared (all at once) on the court’s docket and this post summarizes the disputed issues which largely center on statute of limitations issues and (as relevant to Baros, a foreign national defendant) general jurisdiction issues as well as FCPA specific jurisdiction issues).

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With Chi Guilty Verdict, Focus Shifts To Kinemetrics And Guralp Systems

focus

The DOJ recently announced that Heon-Cheol Chi (Chi) of South Korea, “the Director of South Korea’s Earthquake Research Center at the Korea Institute of Geoscience and Mineral Resources (KIGAM) was convicted … following a four-day jury trial of laundering bribes that he received from two seismological companies based in California and England through the U.S. banking system.”

As noted here, according to court documents the companies are Kinemetrics (a California company that designs technologies, products, and solutions for monitoring earthquakes and their effects on people and structures) and Guralp Systems Ltd. (a U.K. company that designs, manufactures and delivers products, services, systems and solutions for a wide range of applications for the seismological research community as well as the the oil & gas, civil engineering and energy sectors.)

With the Chi guilty verdict, focus shifts to Kinemetrics and Guralp Systems and when asked if there would be an FCPA enforcement action against these companies a DOJ spokesperson informed me via e-mail that “the investigation is ongoing.”

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