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What You Need To Know From Q4

FCPA Professor will once again be the place to visit in January for numerous 2018 year in review statistics.

But first, this post closes out the fourth quarter of 2018. (See here [1] for a similar post for the first quarter of 2018, here [2] for the second quarter of 2018, and here [3] for the third quarter of 2018).

DOJ Enforcement (Corporate)

The DOJ brought 1 corporate FCPA enforcement action in the fourth quarter. Recovery in this enforcement action was approximately $20.3 million.

Polycom (Dec. 20th)

See here [4] for the prior post

Charges: None, reference is made to “bribery committed by employees of the Company’s subsidiaries in China, and these subsidiaries’ knowing and willful causing of false books and records at Polycom.”

Resolution Vehicle: So-called declination with disgorgement

Guidelines Range: Not mentioned in the letter agreement

Settlement: $20.3 million.

Origin: Voluntary disclosure

Monitor: No

Individuals Charged by DOJ: No

[5]

DOJ Enforcement (Individual)

The DOJ brought or announced 3 core enforcement actions against 5 individuals in fourth quarter.

As highlighted here [6], the DOJ charged well-known Venezuelan billionaire Raul Gorrin with FCPA and related offenses.

As highlighted here [7], the DOJ announced FCPA and related charges against the following individuals associated with Goldman Sachs in connection with 1MDB fund: Low Taek Jho (Jho Low), Ng Chong Hwa (Roger Ng – a former managing director at Goldman Sachs), and Tim Leissner (the former Southeast Asia Chairman at Goldman Sach and Participating Manager Director).

As highlighted here [8], the DOJ added an additional defendant (Roger Boncy) to the Haiti port project case.

[9]

SEC Enforcement (Corporate)

The SEC brought 3 enforcement actions in the fourth quarter. Recovery in these enforcement actions was approximately $23.8 million. None of the enforcement actions involved related charges or findings against company employees.

Polycom (December 26th)

See here [4] for the prior post

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

Settlement: $16.3 million (disgorgement of $10,672,926, prejudgment interest of $1,833,410, and a civil penalty of $3,800,000)

Origin: Voluntary disclosure

Individuals Charged: No

Related DOJ Enforcement Action: Yes

Eletrobras (December 26th)

See here [10] for the prior post

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

Settlement: $2.5 million civil penalty

Origin: Foreign law enforcement investigation

Individuals Charged: No

Related DOJ Enforcement Action: No

Vantage Drilling (November 19th)

See here [11] and here [12] for prior posts

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

Settlement: $5 million in disgorgement

Origin: Foreign law enforcement investigation

Individuals Charged: No

Related DOJ Enforcement Action: No

SEC Enforcement (Individual)

As highlighted here [13] in connection with the previous Panasonic corporate enforcement action, the SEC found that Paul Margis (a former President and CEO of Panasonic Avionics Corp.) authorized various conduct giving rise to the company’s FCPA liability. Without admitting or denying the SEC findings, Margis agreed to pay a $75,000 penalty.

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Other Developments or Items of Interest

The FCPA turned 41 (see here [15]) and this post [16] weaves the over 200 companies that have resolved enforcement actions into a fictional story to demonstrate that it truly is an FCPA world.

It is simply unconscionable and inexcusable on any level for FCPA scrutiny to last over 7 years. Yet, as highlighted here [17] this is how long (and counting) Wal-Mart has been under FCPA scrutiny.

The DOJ announced a China Initiative and among the ten specifically identified components is to “identify Foreign Corrupt Practices Act (FCPA) cases involving Chinese companies that compete with American businesses.” However, as highlighted here [18] , this conflicts with the OECD Convention.

As highlighted here [19] , FCPA “tips” continue to be a minor component of the SEC’s whistleblower program.

Lots of speeches and writings by enforcement officials in the fourth quarter.

The SEC issued a report of investigation regarding certain cyber-related frauds relevant to the FCPA’s internal controls provisions. As highlighted here [29] , the report cites the FCPA’s legislative history, prior SEC FCPA guidance, and in the report the SEC takes positions that seemingly undermine its internal controls enforcement theories in many traditional FCPA enforcement actions involving alleged foreign bribery.

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