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Lennox International – The Most Absurd FCPA Voluntary Disclosure Ever?


Lennox International is involved in the heating, air conditioning, and refrigeration markets.

The question needs to be asked: what made the company so hot as to recently disclose to the DOJ and SEC an investigation into a $475 payment in Russia to release a shipment of goods being held by customs officials?

The disclosure is arguably one of the most absurd FCPA disclosures ever.

There is of course no legal obligation to voluntarily disclose, something even the DOJ acknowledges in its April 2016 FCPA Pilot Program. But then again, returning to an issue first highlighted in this 2009, voluntary disclosure is the fuel that feeds FCPA enforcement and is extremely lucrative for FCPA Inc. Indeed, who can forget the words of the former DOJ Fraud Section Chief in this Wall Street Journal article “if you get two of these [FCPA investigations] a year as a partner, you’re pretty much set.”

Lennox’s decision to disclose was presumably a business decision made by the board of directors or audit committee based on the advise of FCPA counsel. If FCPA counsel did indeed advise company leaders to disclose, that advise needs to be seriously questioned.

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FCPA Flash – A Conversation With Lee Dunst Regarding Voluntary Disclosure And Cooperation

FCPA Flash

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 the written posts on FCPA Professor.

This FCPA Flash episode is a conversation with Lee Dunst (Gibson, Dunn & Crutcher) who recently penned a piece that caught my eye about the DOJ’s expectations for voluntary disclosure and cooperation. In the episode, Dunst elaborates on points discussed in the piece including how senior executives and corporate directors have come to resent the DOJ’s paternalistic commands embodied in various FCPA enforcement policies. Dunst also touches upon the “Yates Memo” and the DOJ’s “FCPA Pilot Program.”

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Thoughts Regarding “Principles And Practices Of High-Quality Ethics & Compliance Programs”

If Only

Recently, the Ethics & Compliance Initiative (ECI) released this “Principles and Practices of High-Quality Ethics & Compliance Programs.” As stated in the report, the ECI convened a group of 24 thought leaders and challenged them to identify the qualities that distinguish … ‘high-quality’ ethics and compliance programs.”

I have no doubt that the thought leaders worked hard and in good faith in drafting the report. However, the report was disappointing unless of course one loves checklists, charts, bullet points, vague generalities and other Compliance 2.0 (or has Compliance 3.0 arrived) buzzwords.

More substantively, as highlighted below, the report contains an asserted best practice that few (including former high-ranking DOJ officials) are likely to agree with.

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It Is Pure Speculation To Say That Nortek / Akamai Benefited Or Received An Excellent Result From Its Disclosure


Several law firm client alerts and commentary about last week’s Nortek and Akamai Technologies enforcement actions are carrying forward the conventional wisdom that the companies benefited from their voluntary disclosure and cooperation because the SEC resolved the matters via non-prosecution agreements and the DOJ “declined” to prosecute. Taking it a stop further, this commentator asserts that “these enforcement actions resulted in excellent results for both companies.”

However, it is pure speculation to say that Nortek or Akamai benefited or that the enforcement actions resulted in excellent results for the companies.

To state the obvious, in the Nortek and Akamai enforcement actions (as well as other enforcement actions which originate from voluntary disclosures) we know what we know and we don’t know what we don’t know.

What we don’t know is what would have happened if Nortek and Akamai did not disclose its internal findings of possible FCPA issues to the SEC and DOJ.

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FCPA Insanity: Doing The Same Thing Over And Over Again And Expecting Different Results


Albert Einstein is credited with saying that insanity is “doing the same thing over and over again and expecting different results.”

You don’t need to be an Einstein to realize that the main thrust of the DOJ’s recently announced FCPA “pilot program” (that is to encourage voluntary disclosure) is nothing new.

All you need to have done over the past decade is pay attention to DOJ enforcement agency speeches because the DOJ has been saying the same thing over and over again.

As noted in this original post announcing the DOJ’s “new” “pilot program,” the DOJ’s latest attempt to encourage voluntary disclosure should most certainly be seen as an acknowledgement that its long-standing efforts have not been as successful as the DOJ might hope.

Does the DOJ honestly believe that this most recent iteration is going to lead to any different results – particularly since (as will be explored in a future post) the “pilot program” really does not represent anything new despite the DOJ’s best effort to convince the corporate community otherwise?

Set forth below are numerous DOJ speeches since 2005 to encourage voluntary disclosure, including the DOJ’s repeated assurances that voluntary disclosure results in meaningful credit.

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