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Words Matter As Ninth Circuit Concludes In Wadler Matter That The FCPA Is Not A “Rule Or Regulation” Of The SEC

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These pages have closely followed the civil lawsuit of Sanford Wadler (the former General Counsel and Secretary of Bio-Rad Laboratories) against the company and certain executive officers and board members alleging various unfair employment practices including that Wadler was terminated for blowing the whistle on certain potential FCPA issues.

As highlighted in this previous post, Wadler’s claims were fully litigated and in February 2017 a jury awarded Wadler $2.9 million in back pay and stock compensation and $5 million for punitive damages. The district court doubled the compensatory award pursuant to Dodd-Frank for a total award of approximately $11 million. As highlighted in this previous post, Bio-Rad filed an appeal in the Ninth Circuit challenging various aspects of the trial court decision.

Yesterday in this fragmented decision the Ninth Circuit largely ruled in favor of Wadler. Nevertheless, the court did conclude that the Foreign Corrupt Practices Act was not a “rule or regulation of the SEC” as that phrase in used in Section 806 of SOX which prohibits in certain instances issuers from retaliating against an employee who reports misconduct.

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FCPA Flash Podcast – A Conversation With James Noe Regarding FCPA Issues In The Oil And Gas Industry

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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 James Noe (special counsel with Jones Walker LLP who previously served in various in-house counsel and executive roles with several oil and gas companies). During the podcast, Noe discusses: the easiest and most difficult aspects of FCPA compliance in the oil and gas industry; the extent of facilitating payments in the industry; whether oil and gas companies are too risk averse when it comes to FCPA issues; and civil actions by industry participants when business is lost because of a refusal to make bribe payments.

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Walmart’s $160 Million Ripple

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The article “Foreign Corrupt Practices Act Ripples” highlights how settlement amounts in an actual FCPA enforcement action are often only a relatively minor component of the overall financial consequences that can result from FCPA scrutiny or enforcement.

Among other ripples are private shareholder suits.

In the aftermath of the New York Times April 2012 article (an article which did not lead to Wal-Mart’s FCPA scrutiny, but certainly magnified it to a whole new level) numerous shareholder suits rained down on the company.

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L-3 Exec Testifies That Representative Agreement With Qatar Company “Was Cover For Any Kind Of Allegation That [L-3] Has Violated The FCPA”

Judicial Decision

This post concerns a judicial opinion recently released by the Southern District of New York in a bench trial concerning the claims of Capital Security Systems (a company located in Qatar) against L-3 Communications Security and Detection Systems.

The underlying claims were garden variety breach of contract and related causes of actions with Foreign Corrupt Practices Act issues sprinkled in.

In terms of relevant background information, the decision states in pertinent part:

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A Few FCPA Related Securities Fraud Claims Are Allowed To Proceed

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This recent post highlighted how securities fraud class actions in the aftermath of Foreign Corrupt Practices Act enforcement actions or mere instances of FCPA scrutiny are frequently dismissed.

This remains a true statement, but as highlighted in this post, sometimes a claim or two does advance past the motion to dismiss stage as was recently the case in matters involving Cognizant Technology Solutions and Obebrecht.

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