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Friday Roundup

Asset recovery, scrutiny alerts and updates, nominate, and for the reading stack. It’s all here in the Friday roundup.

Asset Recovery

FCPA enforcement is not the only prong of the DOJ’s bribery and corruption fight.

Asset recovery – part of the DOJ’s so-called Kleptocracy Initiative – is another prong and recently the DOJ announced its largest action ever brought under the program. As stated in this release [1]:

“[The DOJ] filed civil forfeiture complaints seeking the forfeiture and recovery of more than $1 billion in assets associated with an international conspiracy to launder funds misappropriated from a Malaysian sovereign wealth fund.

[…]

According to the complaints, from 2009 through 2015, more than $3.5 billion in funds belonging to 1Malaysia Development Berhad (1MDB) was allegedly misappropriated by high-level officials of 1MDB and their associates.  With today’s complaints, the United States seeks to recover more than $1 billion laundered through the United States and traceable to the conspiracy.  1MDB was created by the government of Malaysia to promote economic development in Malaysia through global partnerships and foreign direct investment, and its funds were intended to be used for improving the well-being of the Malaysian people.  Instead, as detailed in the complaints, 1MDB officials and their associates allegedly misappropriated more than $3 billion.”

See here [2] for Attorney General Loretta Lynch’s comments.

See here [3] for Assistant Attorney General Leslie Caldwell’s comments.

See here [4] for video of the DOJ’s press conference.

Scrutiny Alerts and Updates

JP Morgan

Similar predictive articles by the Wall Street Journal have not always panned out, but in any event the Wall Street Journal reports [5]:

“J.P. Morgan Chase & Co. is expected to pay around $200 million later this year to settle criminal and civil probes over its Asia hiring practices, including a China program in which it hired sons and daughters of powerful people, people familiar with the matter said.

[…]

The bank is likely to enter into a nonprosecution agreement, some of the people said, whereby it admits to wrongdoing and agrees to reforms but avoids the public filing of charges.

[…]

The settlement timing has been unclear for months, but people close to the case said the coming presidential election and prosecutors’ fiscal year-end of Sept. 30 may be pushing the process along.”

A $200 million FCPA enforcement would be the 10th largest of all-time and the 3rd largest of all-time against a U.S. company. That a dubious hiring practices case might be settled for such an amount, well, that would be interesting.

SBM Offshore

As highlighted in this post [6], in late 2014 Dutch-based SBM Offshore (a company with ADRs traded in the U.S.) resolved a Dutch enforcement action regarding alleged improper payments in Equatorial Guinea, Angola and Brazil. With a settlement amount of $240 million, the SBM Offshore enforcement action was one of the largest in recent years.

At the time, SBM Offshore issued a release stating “the United States Department of Justice has informed SBM Offshore that it is not prosecuting the Company and has closed its inquiry into the matter.” Since then, as highlighted here [7], the DOJ has re-opened its inquiry.

Earlier this week, SBM Offshore issued this release concerning a Brazil enforcement action:

“The Ministry of Transparency, Oversight and Control (Ministério da Transparência, Fiscalização e Controle – “MTFC”), the Public Prosecutor’s Office (Ministério Público Federal – “MPF”), the General Counsel for the Republic (Advocacia Geral da União – “AGU”), Petróleo Brasileiro S.A. – Petrobras (“Petrobras”) and SBM Offshore signed a settlement agreement (“Settlement Agreement”) today that closes out the inquiries of the MPF, the MTFC and Petrobras into the payment of undue advantages to employees of Petrobras.

[…]

The terms for final settlement negotiated between the Parties are made up as follows:

  • cash payment by SBM Offshore totalling US$162.8 million, of which US$149.2 million will go to Petrobras, US$6.8 million to the MPF and US$6.8 million to the Council of Control of Financial Activities (Conselho de Controle de Atividades Financeiras – “COAF”) for the implementation of units for massive electronic process of information and other instruments to be used in the prevention and combat against corruption by the MPF and the COAF. This amount will be paid in three installments. The first installment of US$142.8 million will be payable as of the effective date of the Settlement Agreement. The two further installments of US$10 million each will be due respectively one and two years following the effective date of the Settlement Agreement.”

Unaoil

The U.K. Serious Fraud Office recently announced:

“The SFO is conducting a criminal investigation into the activities of Unaoil, its officers, its employees and its agents in connection with suspected offences of bribery, corruption and money laundering.  We have been approached by a number of sources who may have information relevant to this investigation.”

According to the release: “The SFO opened its investigation in March 2016.”

For the origins of Unaoil’s scrutiny, see this prior post [8].

Nominate

If you are so moved, I would be grateful if you might take a few minutes to nominate FCPA Professor for the ABA Journal’s Blawg 100 list.

To do so, click here [9]. Many thanks.

For the Reading Stack

An interesting read here [10] from Law360 titled “Yates Memo Driving Wedge Between Companies and Workers.” It begins:

“Ten months after the U.S. Department of Justice released the so-called Yates Memo calling on prosecutors to pursue individual bad actors, experts say the new policy has employees and their employers at odds as both feel like they’ve been thrown under the bus.”

*****

A good weekend to all.