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United Technologies Corp. Resolves $13.9 Million Enforcement Action

UTC

Yesterday, the SEC announced that United Technologies Corporation resolved a $13.9 million Foreign Corrupt Practices Act enforcement action.

The conduct at issue concerned Otis Elevator Co. (a wholly-owned subsidiary of UTC), Pratt & Whitney (an operating division of UTC), and International Aero Engines (a joint venture of five aerospace companies including Pratt & Whitney) regarding a Russian and Azerbaijani improper payment scheme, a China aviation scheme, improper payments for Otis Elevator sales in China, and leisure travel for foreign officials from several countries including China, Kuwait, South Korea, Pakistan, Thailand, and Indonesia.

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Judge Sentences Bahn To 6 Months And Rejects DOJ’s Request For A 70-87 Month Sentence, SEC Brings Related Enforcement Action

Bahn

As highlighted in this previous post, in January 2017 the DOJ announced Foreign Corrupt Practices Act, and related charges, against four individuals for their roles in a scheme to pay $2.5 million in bribes to facilitate the $800 million sale of a commercial building in Vietnam (the so-called Landmark 72 pictured) to a Middle Eastern sovereign wealth fund.

It certainly was not a typical FCPA enforcement action. In fact it was downright strange in that the bribery scheme was unsuccessful and the third party intended to facilitate the bribery scheme simply pocketed the money for himself.

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SEC Finally Announces Its FCPA Enforcement Action Against Legg Mason

LG

Prior posts here and here highlighted the DOJ’s June FCPA enforcement action against Legg Mason regarding business conduct in Libya. It was noted in the prior post that FCPA enforcement actions against issuers that involve a DOJ and SEC component are almost always announced on the same day. Yet for some reason, back in June the i’s were not dotted or the t’s crossed at the SEC and the DOJ’s June enforcement action clearly had a placeholder for the forthcoming SEC prong.

That happened earlier today as the SEC finally announced its enforcement action.

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It’s Been Over A Year Since The SEC Has Brought An Individual FCPA Enforcement Action

SEC

The SEC (like the DOJ) often talks about the importance of individual FCPA enforcement actions. For instance, SEC enforcement officials have stated:

“Companies cannot engage in bribery without the actions of culpable individuals. The Enforcement Division is broadly committed to holding individuals accountable when the facts and the law support doing so.”

“Pursuing individual accountability [in FCPA enforcement actions] is a critical part of deterrence.”

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A Summary Of The SEC’s Trial Court Woes In FCPA Enforcement Actions

You be the Judge

This recent post summarized the dismissal of the SEC’s Foreign Corrupt Practices Act (and related) charges against against Michael Cohen 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.  The enforcement action is believed to be only the fourth time in FCPA history in which the SEC was put to its ultimate burden of proof in an FCPA enforcement action.

As highlighted in this post, the SEC also lost in the other three instances and in the FCPA’s 40 year history the SEC has never prevailed when put to its ultimate burden of proof.

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