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Former Herbalife China Executives Criminally Charged By DOJ, SEC Also Charges Former Executive

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In 2014, Avon resolved a Foreign Corrupt Practices Act enforcement based in large part on obtaining a direct selling permit in China. (See here for the prior post).

In 2016, Nu Skin Enterprises resolved an FCPA enforcement action based in large part on obtaining a direct selling permit in China. (See here for the prior post).

In 2017, Herbalife disclosed that it was under FCPA scrutiny concerning its conduct in China. With the company’s scrutiny still pending, yesterday the DOJ announced that Yanliang Li (a citizen of China and former Managing Director of a Chinese division of Herbalife) and Hongwei Yang (a citizen of China and former head the External Affairs Department of a Chinese division of Herbalife) were criminally charged “for their roles in a scheme to violate the anti-bribery and the internal controls provisions of the FCPA.” Not surprisingly, the alleged conduct focused on obtaining a direct selling permit.

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Westport Fuel Systems Resolves $4 Million FCPA Enforcement Action Based On Transfer Of Shares To A Private Equity Fund In Which A Chinese Official Held An Interest – Former CEO Also Resolves Action

Westport

In the third corporate Foreign Corrupt Practices Act is less than 24 hours, the SEC announced this afternoon that Westport Fuel Systems (a Canadian company with shares traded on NASDAQ) agreed to pay approximately $4 million for “paying bribes to a foreign government official in China.”

In addition, in connection with the same core conduct, Nancy Gougarty (a U.S. citizen who previously served as Chief Operating Officer and from mid-2016 until early 2019 as the CEO and member of the board of directors) agreed to pay a $120,000 civil penalty.

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Next Up – Barclays Hands Over $6.3 Million To Uncle Sam

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First, it was BNY Mellon Corp. in August 2015 for $14.8 million (see here and here for prior posts). Then, it was Qualcomm in March 2016 for $7.5 million (see here and here for prior posts). Then, it was JPMorgan in November 2016 for $202.6 million (see herehere, and here for prior posts). Then, it was Credit Suisse in July 2018 for $77 million (see here and here for prior posts). Then, it was Deutsche Bank in August 2019 for $16.2 million (see here and here for prior posts).

Next up in Foreign Corrupt Practices Act enforcement actions (mostly targeting the financial services industry) focusing, in whole or in part, on internship and hiring practices being a form of bribery is Barclays as the SEC announced that the U.K. bank with shares traded on the NYSE will pay approximately $6.3 million to “settle charges that it violated the FCPA by hiring the relatives and friends of foreign government officials in order to improperly influence them in connection with its investment banking business.”

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Hot Off The Press – Printing Company Quad/Graphics Resolves $10 Million FCPA Enforcement Action

quad

This post earlier this week told you that there would likely be more Foreign Corrupt Practices Act enforcement this week as the SEC’s fiscal year draws to a close.

Sure enough as late yesterday the SEC announced an approximate $10 million enforcement action against Wisconsin-based printing company Quad/Graphics for “engaging in multiple bribery schemes in Peru and China.”

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The Other Shoe Drops On TechnipFMC As The SEC Announces A $5 Million Enforcement Action

othershoe

The SEC’s fiscal year ends on September 30th. Thus, it is likely that many loose ends are being closed this week and, with history as a guide, there is likely to be more FCPA enforcement actions this week.

Most FCPA enforcement actions against issuers that include a DOJ and SEC component are resolved on the same day. However, as noted in prior posts here and here concerning the DOJ’s net $81.9 million FCPA enforcement action against TechnipFMC in June 2019, the SEC prong of the enforcement action was left open.

This loose end was closed yesterday as the SEC announced an approximate $5 million enforcement action against the company “for violations of the FCPA by FMC Technologies prior to its 2017 merger with Technip S.A.”

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