Top Menu

What You Need To Know From Q3

q3

This post provides a summary of Foreign Corrupt Practices Act enforcement activity and related developments from the third quarter of 2018. (See here for a similar post for the first quarter and here for the second quarter).

DOJ Enforcement (Corporate)

The DOJ brought three corporate FCPA enforcement action in the third quarter. DOJ recovery in these actions was approximately $132 million in net FCPA settlement amounts.

None of the three corporate enforcement actions have resulted (at least yet) in any related DOJ FCPA enforcement actions against company employees.

  Petrobras (Sept. 27th)

See here and here for prior posts

Charges: None, although the non-prosecution agreement refers to the FCPA’s books and records and internal controls provisions

Resolution Vehicle: NPA

Guidelines Range: The NPA does not contain a specific guidelines calculation, but generally refers “to 25% off of the bottom of the U.S. Sentencing Guidelines fine range”

Settlement Amount: $85.3 million after accounting for credits and deductions for related enforcement actions

Origin: Foreign law enforcement investigation

Monitor: By the DOJ no – the NPA states Petrobras “will be subject to oversight by Brazilian authorities, including Brazil’s Tribunal de Contas da Uniao and Comissao de Valores Mobiliarios, the Fraud Section and the Office determined that an independent compliance monitor was unnecessary.”

Individuals Charged by the DOJ: No

  Insurance Corporation of Barbados (August 23rd)

See here for the prior post

Charges: None

Resolution Vehicle: “Declination with Disgorgement”

Guidelines Range: Not set forth in the letter agreement

Settlement Amount: Approximately $94,000

Origin: Voluntary disclosure

Monitor: No

Individuals Charged by the DOJ: No

  Credit Suisse (July 5th)

See here and here for prior posts

Charges: None

Resolution Vehicle: NPA

Guidelines Range: The NPA does not contain a specific guidelines calculation, but generally refers to “a discount of 15% off of the bottom of the U.S. Sentencing Guidelines fine range”

Settlement Amount: $47 million

Origin: Likely an industry sweep connected to JPMorgan’s FCPA scrutiny

Monitor: No

Individuals Charged by the DOJ: No

DOJ Enforcement (Individual)

In the DOJ’s long-standing enforcement action (charges were first brought in late 2015) in connection with alleged corrupt schemes to secure contracts from Venezuela’s state-owned and state-controlled energy company, PDVSA, the DOJ brought or announced in the third quarter additional charges against two individuals: Jose Manuel Gonzalez and Juan Carlos Castillo. (See here and here).

SEC Enforcement (Corporate)

The SEC brought 7 corporate FCPA enforcement actions in the third quarter. SEC recovery in these actions was approximately $205 million.

Stryker (Sept. 28th)

See here for the prior post.

Charges: None.  Administrative cease and desist order finding violations of FCPA’s books and records and internal controls provisions

Settlement: $7.8 million civil penalty

Origin: The administrative order states: “in response to the Commission’s investigation, Stryker retained outside counsel and forensic auditors to conduct an internal investigation into the company’s compliance with the FCPA concerning Stryker’s activities in India, China, and Kuwait. (Note: in 2013 Stryker also resolved an FCPA enforcement action).

Individuals Charged: No

Related DOJ Enforcement Action: No

Petrobras (Sept. 27th)

See here and here for prior posts

Charges: None.  Administrative cease and desist order finding violations of FCPA’s books and records and internal controls provisions as well as other securities law provisions.

Settlement: $85.3 million after accounting for credits and deductions for related enforcement actions

Origin: Foreign law enforcement investigation

Individuals Charged: Not by the SEC

Related DOJ Enforcement Action: Yes

United Technologies Corp. (Sept. 12th)

See here and here for prior posts

Charges: None.  Administrative cease and desist order finding violations of FCPA’s anti-bribery, books and records and internal controls provisions

Settlement: $13.9 million (disgorgement of $9,067,142, prejudgment interest of $919,392, and a civil money penalty of $4,000,000)

Origin: Voluntary disclosure

Individuals Charged: No

Related DOJ Enforcement Action: No

Sanofi (Sept. 4th)

See here and here for prior posts

Charges: None.  Administrative cease and desist order finding violations of FCPA’s books and records and internal controls provisions

Settlement: $25.2 million ($17.5 million in disgorgement, $2.7 million in prejudgment interest, and a civil penalty of $5 million)

Origin: Media reports suggest a voluntary disclosure, however the SEC’s order is silent on this topic

Individuals Charged: No

Related DOJ Enforcement Action: No

Legg Mason (August 27th)

See here for the prior post

Charges: None.  Administrative cease and desist order finding violations of FCPA’s internal controls provisions

Settlement: $34.5 million in disgorgement and prejudgment interest

Origin: Pro-active government investigation and subpoena

Individuals Charged: No

Related DOJ Enforcement Action: Yes

Credit Suisse (July 5th)

See here and here for prior posts

Charges: None.  Administrative cease and desist order finding violations of FCPA’s anti-bribery and internal controls provisions

Settlement: $29.8 million (approximately $25 million in disgorgement and approximately $4.8 million in prejudgment interest).

Origin: Likely an industry sweep connected to JPMorgan’s FCPA scrutiny

Individuals Charged: No

Related DOJ Enforcement Action: Yes

Beam (July 2nd)

See here and here for prior posts

Charges: None.  Administrative cease and desist order finding violations of FCPA’s books and records and internal controls provisions

Settlement: $8.2 million (disgorgement of $5,264,340, prejudgment interest of $917,498, and a civil monetary penalty of $2 million)

Origin: Voluntary disclosure

Individuals Charged: No

Related DOJ Enforcement Action: No

SEC Enforcement (Individual)

The SEC brought two individual enforcement actions in the third quarter.

As highlighted here, in connection with the DOJ and SEC’s January 2017 enforcement action against Sociedad Quimica y Minera de Chile S.A. (SQM), a chemical and mining company based in Chile, in relation to its interactions with Chilean officials, the SEC brought an administrative action against former CEO Patricio Contesse Gonazlez. Gonzalez agreed to pay a $125,000 civil penalty.

As highlighted here, related to the DOJ’s January 2017 enforcement action concerning a bribery scheme in connection with the sale of a commercial building in Vietnam to a Middle Eastern sovereign wealth fund, the SEC found in an administrative order that Joo Hyun Bahn, “while acting as a broker for Colliers International Group, Inc.” violated the FCPA’s antibribery provisions, caused violations of the Act’s books and records provisions, intentionally circumvented Colliers’ internal accounting controls, and falsified its corporate books and records.  Bahn agreed to pay $225,000 in disgorgement, which was deemed satisfied by the forfeiture and restitution ordered at his September 6, 2018 sentencing in a related criminal proceeding.”

Other Developments or Items of Interest

Deputy Attorney General Matthew Miner delivered an FCPA speech that touched upon a variety of issues. This post summarizes the speech and provides commentary.

As highlighted here, in an FCPA-related civil case a federal court judge found the term “instrumentality” in the FCPA’s “foreign official” definition “unclear” and otherwise narrowly construed the term in a way contrary to the DOJ’s current position.

Sticking with FCPA-related civil cases, as highlighted in this post several securities fraud class actions were dismissed while this post highlights a few claims that survived the motion to dismiss stage.

As highlighted in this guest post , Canada now has deferred prosecution agreements.

As highlighted here, in a rare FCPA appellate court decision, the Second Circuit rejected the DOJ’s expansive jurisdictional theory of prosecution involving a foreign national in U.S. v. Hoskins. This post further analyzes the decision and various “big picture” issues and this post rounds up commentary from others.

As highlighted here, the Second Circuit recently had another FCPA appeal hits its docket and will have the opportunity in U.S. v. Seng to interpret the FCPA’s corrupt intent and obtain and retain business elements.

This post highlights another recent FCPA speech by the DOJ’s Deputy Assistant Attorney General and this post describes how the DOJ’s latest FCPA rhetoric doesn’t even pass the smell test.

As highlighted here, the SEC’s FCPA (and related) enforcement action against Michael Cohen and Vanja Baros (former Och-Ziff executives) based on the same core conduct as the 2016 Och-Ziff enforcement action was recently dismissed on statute of limitations grounds.

This post previews a Second Circuit FCPA appeal by Ng Lap Seng who was previously convicted of FCPA and related offenses for his role in a scheme to bribe United Nations ambassadors to obtain support to build a conference center in Macau that would host, among other events, the annual United Nations Global South-South Development Expo.

FCPA Institute - Phoenix (January 17-18, 2019)

A unique two-day learning experience ideal for a diverse group of professionals seeking to elevate their FCPA knowledge and practical skills through active learing. Learn more, spend less. CLE credit is available.

Learn More & Register

Powered by WordPress. Designed by WooThemes