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What You Need To Know From Q1

Q1

This post provides a summary of Foreign Corrupt Practices Act enforcement activity and related developments from the first quarter of 2019. Although three quarters remain in 2019, FCPA enforcement this year is already the 5th largest in FCPA history (from a settlement amount perspective – $1.11 billion) (see here).

DOJ Enforcement (Corporate)

The DOJ brought three corporate FCPA enforcement action in the first quarter. DOJ actual recovery in these actions was approximately $835 million.

 Cognizant Technology Solutions (Feb. 15)

See here, here and here for prior posts.

Charges: None

Resolution Vehicle: Declination with disgorgement

Guidelines Range: Not mentioned in the letter agreement

Settlement: None, the letter agreement refers to disgorgement of $19,370,561 which the DOJ credited based on the parallel resolution with the SEC

Origin: Voluntary disclosure

Monitor: No

Individuals Charged: Yes

MTS (March 6)

See here and here for prior posts

Charges: As to Kolorit Dizayn Ink LLC, criminal information charging conspiracy to violate the FCPA’s anti-bribery and books and records provisions; as to MTS criminal information charging conspiracy to violate the FCPA’s anti-bribery and books and records provisions

Resolution Vehicle: Kolorit resolved the charges through a plea agreement; MTS resolved the charges through a DPA

Guidelines Range: The DPA references an advisory guidelines range of $673 million to $1.35 billion

Settlement: $750 million

Origin: The related Uzbekistan matters (MTS, Telia, and Vimpelcom) began with foreign media reporting

Monitor: Yes

Individuals Charged: No

Fresenius (March 29)

See here for a prior post

Charges: None

Resolution Vehicle: NPA

Guidelines Range: None referenced in the NPA although it states “40% off of the bottom” of the guidelines range

Settlement: $84.7 million

Origin: Voluntary disclosure

Monitor: Yes

Individuals Charged: No

DOJ Enforcement (Individual)

The DOJ brought or announced five core individual actions in the first quarter against nine individuals.

As highlighted here, former Credit Suisse bankers Andrew Pearse, Surjan Singh, and Detelina Subeva were criminally charged with conspiracy to violate the FCPA’s anti-bribery and internal controls provisions in connection with financing various Mozambican maritime projects.

As highlighted here, James Lyon (the owner of Lyon Associates Inc. – a privately-held engineering and consulting company headquartered in Hawaii) was criminally charged and pleaded guilty to charges concerning bribery of Micronesian and Hawaiian officials.

As highlighted here, in connection with the Cognizant matter, former executives Gordon Coburn and Steven Schwartz were criminally charged with FCPA violations.

As highlighted here, in connection with is long-standing PDVSA bribery scheme enforcement action, the DOJ announced criminal FCPA and related charges against Rafael Pinto and Franz Muller.

As highlighted here, in connection with the MTS matter, the DOJ criminally charged former MTS executive Bekhzod Akhmedov with FCPA and related offenses.

SEC Enforcement (Corporate)

The SEC brought three corporate FCPA enforcement actions in the first quarter. SEC recovery in these actions was approximately $272 million.

Cognizant Technology Solutions  (Feb. 15)

See herehere and here for prior posts

Charges:  None (administrative order findings violations of the FCPA’s anti-bribery, books and records and internal controls provisions)

Settlement: $25 million

Origin: Voluntary disclosure

Individuals Charged: Yes

Related DOJ Enforcement Action: Yes

MTS  (March 6)

See here and here for prior posts

Charges:  None (administrative finds violations of the FCPA’s anti-bribery, books and records and internal controls provisions)

Settlement: $100 million

Origin: The related Uzbekistan matters (MTS, Telia, and Vimpelcom) began with foreign media reporting

Individuals Charged: No

Related DOJ Enforcement Action: Yes

Fresenius  (March 29)

See here for a prior post

Charges:  None (administrative order finds violations of the FCPA’s anti-bribery, books and records and internal controls provisions)

Settlement: $147 million

Origin: Voluntary disclosure

Individuals Charged: No

Related DOJ Enforcement Action: Yes

SEC Enforcement (Individual)

As highlighted here, in connection with the Cognizant matter, the SEC charged Coburn and Schwartz with violating the FCPA’s anti-bribery, books and records and internal controls provisions.

Other Developments or Items of Interest

As highlighted here, the DOJ made revisions to its FCPA Corporate Enforcement Policy.

As highlighted here, the Commodity Futures Trading Commission issued an enforcement advisory concerning companies and individuals “that timely and voluntarily disclose to the Division violations of the Commodity Exchange Act involving foreign corrupt practices, where the voluntary disclosure is followed by full cooperation and appropriate remediation.”

The Ninth Circuit concluded in a whistleblower action that the FCPA is not a “rule or regulation” of the SEC (see here ).

As highlighted here , Canada is experiencing an OECD Article 5 moment as allegations of political interference are lodged against the Prime Minister’s office for attempting to persuade prosecutors to go light on SNC-Lavalin.

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