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The Many Issues To Consider From The Cognizant Technology Enforcement Action

Issues

Previous posts here and here highlighted the recent Foreign Corrupt Practices Act enforcement action against Cognizant Technology Solutions and two of its former executives.

This post continues the analysis by highlighting several issues to consider.

Timeline

As highlighted in this prior post, Cognizant disclosed its FCPA scrutiny in a September 2016 SEC filing. Thus from start to finish, Cognizant’s FCPA scrutiny lasted approximately 2.5 years. While 2.5 years is shorter than recent medians of over 4 years (see here), 2.5 years is still too long for FCPA scrutiny to last.

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Friday Roundup

Roundup

Interesting, from the DOJ’s perspective, pay them more, sanctioned, scrutiny update, exit, and for the reading stack. It’s all here in the Friday roundup.

Interesting

As highlighted here, in December 2016 Odebrecht S.A. (a Brazilian holding company) and Braskem S.A. (a Brazil-based petrochemical company in which Odebrecht owns a majority of voting shares) resolved a large FCPA and related enforcement action largely concerning conduct in Brazil including the companies relationships with Petrobras as well as allegations of improper payments in Angola, Argentina, Brazil, Colombia, Dominican Republic, Ecuador, Guatemala, Mexico, Mozambique, Panama, Peru, and Venezuela.

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A Focus On Third Parties

focus

Navex Global recently released this report titled “2018 Third-Party Risk Management Benchmark Report.” I am always a bit skeptical of such survey data given that the results often seem to dovetail nicely with the product offering of the company publishing the survey. Indeed, a final section of the report is titled “About Navex Global’s Third-Party Risk Management Solution.”

Moreover, I often wonder whether such surveys are even statistically valid.

In any event, there were certain survey findings which caught my eye.

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What Congress Intended The Third-Party Payment Provisions To Capture As Well As Not Capture

FCPAat40

Call me old-fashioned or a rule of law purist.

However, in this the Foreign Corrupt Practice Act’s 40th year, it is prudent to take a step back and ponder what Congress actually intended to capture, and not capture, by enacting the FCPA.

Indeed, as the recent Hoskins decision yet again demonstrated (see here) a common thread in most FCPA judicial decisions is judges consulting the legislative history in interpreting the FCPA.

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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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