New DOJ FCPA Unit Chief, “noisy exit” lawsuit settled, an Uber instrumentality?, and for the reading stack.
It’s all here in the Friday roundup.
DOJ FCPA Unit Chief
According to this report: “The U.S. Justice Department has named Daniel S. Kahn to lead the government’s Foreign Corrupt Practices Act unit … Mr. Kahn has led the Justice Department’s anti-bribery unit since March on a temporary basis, taking over from Patrick Stokes. Mr. Stokes was made senior deputy chief in the Fraud Section.”
As noted in this bio:
“Daniel Kahn has been with the Department of Justice, Criminal Division, Fraud Section since 2010 and has been an Assistant Chief in the Foreign Corrupt Practices Act (“FCPA”) Unit since 2013. […] Prior to joining the Department of Justice, Professor Kahn spent six years at Davis Polk & Wardwell LLP …”
See this prior post which highlighted desired attributes for the FCPA Unit Chief.
“Noisy Exit” Lawsuit Settled
Since 2010 (see here for the original post) FCPA Professor has been following the “noisy exit” lawsuit of Steven Jacobs (the former President of Macau Operations for Las Vegas Sands Corp.) against LVS after being terminated by the company.
As highlighted in the post, in his October 2010 complaint filed against LVS in Nevada state court, Jacobs brought breach of contract and tort-based causes of action based on allegations, among other things, that LVS’s “notoriously bellicose” Chief Executive Officer and majority shareholder made several “outrageous demands” upon him including, but not limited to the following:
“demands that Jacobs use improper ‘leverage’ against senior government officials of Macau in order to obtain Strata-Title for the Four Seasons Apartments in Macau;”
“demands that Jacobs threaten to withhold Sands China business from prominent Chinese banks unless they agreed to use influence with newly-elected senior government officials of Macau in order to obtain Strata-Title for the Four Seasons Apartments and favorable treatment with regards to labor quotas and table limits;”
“demands that secret investigations be performed regarding the business and financial affairs of various high-ranking members of the Macau government so that any negative information obtained could be used to exert ‘leverage’ in order to thwart government regulations/initiatives viewed as adverse to LVSC’s interests;” and
“demands that Sands China continue to use the legal services of a Macau attorney […][an individual media is reporting as a member of a Chinese local government executive council] despite concerns that [the individual’s] retention posed serious risks under the criminal provisions of the United States code commonly known as the Foreign Corrupt Practices Act (‘FCPA’).”
Jacobs’s lawsuit was the origin of LVS’s FCPA scrutiny which was resolved in April 2016 when LVS agreed to pay $9 million to resolve SEC books and records and internal controls findings.
According to this report, LVS has agreed to pay between $75 – $100 million to resolve the civil lawsuit brought by Jacobs. According to reports, LVS also incurred more than $100 million in associated legal fees in connection with the lawsuit and related investigations.
The LVS-Jacobs lawsuit is highlighted in “FCPA Ripples” an article which documents that settlement amounts in an actual FCPA enforcement action are often only a relatively minor component of the overall financial consequences that can result from FCPA scrutiny or enforcement.
An Uber Instrumentality?
At what point does Uber Technologies become an instrumentality of the Saudi Arabian government?
As noted here and here, the company recently received $3.5 billion from Saudi Arabia’s Public Investment Fund. As part of the investment, the managing director at the Public Investment Fund, Yasir Al Rumayyan, will take a seat on Uber’s board.
Regardless of the question posed is the related issue that the Managing Director of the Investment Fund would likely be considered a “foreign official” by the enforcement agencies and the Uber board seat likely something of value to the “foreign official.” Was this something of value offered to the “foreign official” to influence the “foreign official’s” discretion?
So-called “overcriminalization” is a frequent topic of conversation among lawyers, policy makers and others.
On this issue, you may want to check out the excellent article “Why Don’t Courts Dismiss Indictments” by James Burnham (Jones Day). The thesis of the article is that many “suggested solutions to overcriminalization overlook a tool for combating [it] that is perhaps simpler and more readily available than the heavy artillery of constitutional law – making it easier for criminal defendants to secure a legal ruling before trial on whether their alleged conduct actually constitutes a federal crime.”
As noted in the article:
“Fortunately, fixing this problem is not much harder than identifying it: Courts should simply begin interpreting the federal criminal rules in accordance with their text, and in harmony with their civil counterparts. Realigning the criminal rules in this direction accords with the few Supreme Court cases to address the issue.”
A good weekend to all.