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Issues To Consider From The Sanofi Enforcement Action

Issues

This previous post highlighted the SEC’s $25.2 million FCPA enforcement action against Sanofi and this post continues the analysis by highlighting additional issues to consider.

Timeline

Sanofi’s FCPA scrutiny began in mid-2014 (see this prior post). Thus, from start to finish, its scrutiny lasted approximately 4 years.

At the risk of sounding like a broken record to regular readers … if the FCPA enforcement agencies want the public to have confidence in their FCPA enforcement programs, they must resolve instances of FCPA scrutiny much quicker. The validity and credibility of FCPA enforcement depends on this. Having FCPA scrutiny linger for over four years is inexcusable particularly since Sanofi, in the words of the SEC:

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Friday Roundup

Roundup

Impasse, quotable, scrutiny alerts, um excuse me but, and for the reading stack. It’s all here in the Friday roundup.

Impasse

Walmart’s FCPA scrutiny began in late 2011. Yet, nearly seven years later there still has not been an enforcement action.

Bloomberg reports: “Walmart Inc. set aside nearly $300 million last fall for a possible resolution with the U.S. government over international bribery allegations, a sign that an end to the years-long investigation was imminent. But eight months later, the sides are deadlocked, three people familiar with the matter said. It’s not about the money: One source of tension is prosecutors’ insistence that Walmart, the world’s largest retailer, admit to certain misconduct as part of any deal, one of the people said.”

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SEC’s FCPA Charges Against Former Och-Ziff Executives Cohen And Baros Dismissed

Judicial Decision

This previous post highlighted the SEC’s Foreign Corrupt Practices Act (and related) enforcement action 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 post noted that the meaty 80 page complaint against Cohen and Baros was a clear signal that a negotiated settlement was unable to be reached and that the defendants would put the SEC to its burden of proof. It was further noted that the SEC is rarely put to its burden of proof in FCPA enforcement actions (corporate or individual) and indeed has never prevailed in FCPA history when put to its ultimate burden of proof. Prior posts here and here summarized the issues in the motion to dismiss briefing.

Yesterday, in yet another blow to the SEC when put to its burden of proof in an FCPA enforcement action, Judge Nicholas Garaufis (E.D.N.Y.) dismissed the SEC’s complaint finding the SEC’s claims time-barred.

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FCPA Flash Podcast – A Conversation With Bradley Bondi Regarding His Recent FCPA Relevant House Testimony

Podcast Logo

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 Bradley Bondi (Cahill Gordon & Reindel LLP). As highlighted in this recent post, Bondi testified at a House hearing titled “Ensuring Effectiveness, Fairness, and Transparency in Securities Law Enforcement” that touched upon several FCPA relevant issues. In the podcast, Bondi elaborates on certain of these issues including: disgorgement and statute of limitation issues. In addition, based on his comment during the hearing that “few would consider a local police force successful in deterring crime if it announced record numbers of arrests year after year,” Bondi opines whether the FCPA is being successful in accomplishing its objectives.

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Kokesh – One Year Later

oneyear

As highlighted in this previous post, on June 5, 2017 in Kokesh v. SEC the Supreme Court unanimously rejected the SEC’s position and held that disgorgement “in the securities-enforcement context is a ‘penalty’ within the meaning of [28 U.S.C.] 2462 and so disgorgement actions must be commenced within five years of the date the claim accrues.”

Although Kokesh was not a Foreign Corrupt Practices Act enforcement action, it most certainly was FCPA relevant because ever since the SEC first sought a disgorgement remedy in an FCPA enforcement action in 2004, disgorgement has become the dominant remedy sought by the SEC in corporate FCPA enforcement actions.

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