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Additional Data Points Relevant To Brockmeyer’s Tenure As SEC FCPA Unit Chief

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Earlier this week, the SEC announced that its FCPA Unit Chief, Kara Brockmeyer, will soon be leaving.

Similar to prior DOJ/SEC press releases upon FCPA enforcement attorneys leaving the government, the SEC’s release largely defines Brockmeyer’s tenure in terms of quantity of enforcement actions brought and settlement amounts secured. (See here for a prior post discussing this dynamic). The vast majority of this FCPA enforcement, because of the prominence of SEC administrative actions as well as NPAs and DPAs, occurred in the absence of any judicial scrutiny.

This post highlights additional data points relevant to Brockmeyer’s tenure as SEC FCPA Unit Chief, a position she assumed in September 2011 after the SEC’s first formal FCPA Unit Chief Cheryl Scarboro departed (see here for the prior post).

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The First Time Baker Hughes Resolved An FCPA Enforcement Action

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[This post is part of a periodic series regarding “old” FCPA enforcement actions]

As highlighted in this prior post, in 2001 KPMG Siddharta Siddharta & Harsono (KPMG-SSH) and Sonny Harsono resolved a joint DOJ/SEC civil FCPA enforcement regarding alleged improper payments in connection with an Indonesia tax assessment.

As detailed in the prior post, it was a unique FCPA enforcement action at the time (believed to be the first time the DOJ/SEC had ever brought an FCPA action against a professional services firm – i.e. a law firm or accounting firm) and still remains unique in that the DOJ/SEC are believed to have never again brought an FCPA enforcement action against a professional services firm. As further detailed in the prior post, KPMG-SSH was an agent of Baker Hughes and thus it was not surprising that a related FCPA enforcement action against Baker Hughes soon followed.

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A Unique FCPA Enforcement Action Then And Still Unique Now

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[This post is part of a periodic series regarding “old” FCPA enforcement actions]

As highlighted in this prior post, the DOJ used to civilly enforce the Foreign Corrupt Practices Act. One of enforcement actions highlighted, indeed the last time the DOJ used this express statutory provision, was a 2001 enforcement action against KPMG Siddharta Siddharta & Harsono and Sonny Harsono.

It was a unique FCPA enforcement action at the time (believed to be the first time the DOJ/SEC had ever brought an FCPA action against a professional services firm – i.e. a law firm or accounting firm) and still remains unique in that the DOJ/SEC are believed to have never again brought an FCPA enforcement action against a professional services firm.

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Former Och-Ziff Executives To Mount A Defense Against SEC’s FCPA (And Related) Claims

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I am not suggesting that the following is a very meaningful statistic, but it is a fact: there has been more FCPA enforcement in the first week of the Trump administration than the first week of the Obama administration.

But then again “assigning” to the Trump administration yesterday’s SEC enforcement action against Michael Cohen (pictured) and Vanja Baros (former Och-Ziff executives) based on the same core conduct as the DOJ and SEC’s September 2016 enforcement action against Och-Ziff is foolish just as it is foolish to “assign” FCPA enforcement in the first months (indeed the first year) of the Obama administration to the Obama Administration.

Yesterday’s enforcement action is not surprising as it was fairly obvious (as detailed in this prior post) that the main actors in the Och-Ziff matter were Cohen and Baros (even though not specifically named in the September 2016 resolution documents).

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Another Week, Another Repeat FCPA Offender As Orthofix International Joins The Club

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In 2012, Orthofix International N.V. (“Orthofix”), a limited liability orthopedic medical device company formed under the law of Netherlands Antilles with administrative offices in Lewisville, Texas and common stock traded on Nasdaq, resolved a $7.4 million Foreign Corrupt Practices Act enforcement action ($2.2 million via a DOJ deferred prosecution agreement, and $5.2 million via a settled SEC civil complaint) based primarily on the conduct of its wholly-owned Mexican subsidiary.

In an enforcement action that was expected (see here for the August 2016 post highlighting how Orthofix International was poised to join the FCPA repeat offender club), the SEC announced yesterday that the company agreed to pay $6 million in disgorgement and penalties to settle FCPA books and records and internal controls findings “when its subsidiary in Brazil schemed to use high discounts and make improper payments through third-party commercial representatives and distributors to induce doctors under government employment to use Orthofix’s products.”

This is the second instance in the past week of a company resolving a second FCPA enforcement action in the span of approximately five years (see here for the prior post regarding Zimmer Biomet).

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