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Further To The Clustering Phenomenon, DOJ Announces Additional Guilty Pleas In Connection With PDVSA Bribery Scheme

cluster

Few corporate Foreign Corrupt Practices Act enforcement actions involve related criminal charges against company employees.

Perhaps sensitive to its individual FCPA prosecution numbers, the DOJ sure seems to cluster enforcement around a few discreet instances of bribery almost always involving private business entities.

This dynamic was first highlighted in this 2014 post and further discussed in this 2016 statistical post.

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In Depth Into The $519 Million Teva FCPA Enforcement Action

Copaxone

Records continue to be set as 2016 Foreign Corrupt Practices Act enforcement enters its final days.

Yesterday, the DOJ and SEC announced (here and here) a $519 million enforcement action against Teva Pharmaceutical Industries Ltd. (an Israeli company with American Depository Receipts traded in the U.S.) and a related entity. The settlement amount included a $283 million DOJ component and a related $236 million SEC component.

The action is believed to be the first-ever FCPA enforcement action against an Israeli company and by far the largest-ever FCPA enforcement action against a pharmaceutical company. (The $70 million 2011 enforcement action against Johnson & Johnson is second on that list). You better go ahead and update your top ten list again because the Teva enforcement action is the 4th largest of all-time. (Odebrecht / Braskem held that spot for less than 24 hours and is now bumped to 5th largest FCPA settlement amount of all-time).

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Issues To Consider From The GlaxoSmithKline Enforcement Action

Issues

This prior post highlighted the SEC’s recent Foreign Corrupt Practices Act enforcement action against GlaxoSmithKline.

In the action,  GSK coughed up $20 million to resolve an administrative action finding that employees and agents of its China-based subsidiary and China-based joint venture provided various things of value to healthcare professionals in China.

This post highlights additional issues to consider from the enforcement action.

By the Numbers

According to FCPAnalytics, the $20 million civil penalty GSK agreed to pay to resolve the matter is the 2nd largest SEC civil penalty in an FCPA enforcement action. In addition, the $20 million settlement is the 5th largest SEC only FCPA enforcement action of all-time (in other words an SEC enforcement action lacking a DOJ component).

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In Depth Into The Och-Ziff FCPA Enforcement Action

och ziff

Last week, the DOJ and SEC announced (here and here) a Foreign Corrupt Practices Act enforcement action against Och-Ziff Capital Management Group (and a related entity) for improper business practices in various African countries. The aggregate settlement amount was $412 million (a $213 million DOJ criminal penalty and a $199 million SEC resolution consisting of disgorgement and prejudgment interest), the 4th largest FCPA settlement amount of all-time.

As highlighted in this previous post, the SEC also found Daniel Och (CEO) and Joel Frank (CFO) culpable for certain of the improper conduct. As indicated in the post, this represents what is believed to be the first time in FCPA history that the SEC also found the current CEO and CFO of the issuer company liable, to some extent, for company FCPA violations. Moreover, the $2.2 million Och agreed to pay, without admitting or denying the SEC’s findings, is the largest settlement amount in FCPA history by an individual in an SEC action.

Whether the Och-Ziff enforcement action is the “first time a hedge fund has been held to account for violating the FCPA” (as the DOJ stated in its release) is a debatable point. (See here for the 2007 FCPA enforcement action on the DOJ’s FCPA website against hedge fund Omega Advisors).

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GlaxoSmithKline Coughs Up $20 Million In SEC FCPA Enforcement Action Based On China Conduct

GSKChina

In this 2016 preview post, I noted that the end of September was likely to be an active period for FCPA enforcement.

Why? Because the SEC’s fiscal year ends on September 30th that’s why.

In the third SEC FCPA enforcement action of the week, the SEC announced this enforcement action in which GlaxoSmithKline plc (a U.K. company with shares traded on the NYSE) will cough up $20 million to resolve an administrative cease and desist order based on employees and agents of its China-based subsidiary and China-based joint venture providing various things of value to healthcare professionals in China.

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