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On National Drink Beer Day, AB InBev Agrees To Pay $6 Million To Resolve FCPA (And Related) Enforcement Action

September 29, 2016

ABInBev

Yesterday was National Drink Beer Day.

Fitting then that yesterday the SEC announced this administrative cease and desist order against Anheuser-Busch InBev, a Belgium brewer with American Depository Receipts traded on the New York Stock Exchange. The conduct at issue involved improper payments by an Indian joint venture “to Indian government officials to obtain beer orders and to increase brewery hours.” AB InBev held a minority interest in the joint venture which marketed and distributed the beer of AB InBev’s wholly-owned Indian subsidiary.

The SEC found that AB InBev violated the FCPA’s books and records and internal controls provisions. Without admitting or denying the SEC’s findings, AB InBev agreed to pay approximately $6 million to resolve the matter. As highlighted below, the SEC also found that AB InBev entered into a separation agreement with a former employee that violated an SEC Rule implementing Dodd-Frank’s whistleblower provisions.

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FCPA Flash – A Conversation With Ty Cobb Regarding FCPA Enforcement And Enforcement Policies

September 28, 2016

FCPA Flash

The FCPA Flash podcast provides in an audio format the same fresh, candid, and informed commentary about the Foreign Corrupt Practices Act and related topics as readers expect from the written posts on FCPA Professor.

This FCPA Flash episode is a conversation with Ty Cobb (Hogan Lovells), a former federal prosecutor and widely regarded as one of the leading white collar defense attorneys in the country. In the episode, Cobb discusses whether the SEC should formally announce an FCPA Pilot Program similar to what the DOJ announced in April 2016; the lack of judicial scrutiny of FCPA enforcement actions; what “success” means in FCPA enforcement; and dynamics relevant to foreign law enforcement actions concerning FCPA or similar conduct.

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Circling Back On The Ping / Harris Corp. Matter

September 27, 2016

Harris

This September 15th post regarding the SEC’s enforcement action against Jun Ping Zhang (the former Chairman and CEO of CareFx China, a dissolved Chinese subsidiary of Harris Corp) noted that the SEC, in the Ping Order, found that as a result of Ping’s conduct “Harris violated the FCPA’s books and records provisions.”

Elsewhere, the Order stated that as a result of the alleged improper conduct CareFx was awarded over $9.6 million in contracts.

Accordingly, the prior post wondered whether a future Foreign Corrupt Practices Act enforcement action against Harris Corp. would be forthcoming. Indeed, there have been several examples of the SEC first bringing an FCPA enforcement action against an individual and then following up with an FCPA enforcement action against the company. (For instance, in August 2015 the SEC brought an FCPA enforcement action against Vicente Garcia (a former head of Latin American sales for SAP) followed by SAP enforcement action in February 2016- see here).

It turns out that the answer to the question: will there be an FCPA enforcement action against Harris Corp. is no because in this SEC release issued on September 12th (a day before the September 13th Ping Order) the SEC states:

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Issues To Consider From The Nu Skin Enforcement Action

September 26, 2016

Issues

This previous post highlighted the SEC’s Foreign Corrupt Practices Act enforcement action against Nu Skin Enterprises.

This post continues the analysis by highlighting additional issues to consider from last week’s enforcement action.

Similar, Yet Different

Before the Nu Skin action, there have been several FCPA enforcement actions that have included, in whole or in part, charitable donations as highlighted in this recent post.

All of the prior enforcement actions though appear to have been involved pre-existing, presumably bona fide charitable organizations that a “foreign official” nevertheless was involved in or was valued by the “foreign official.”

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SEC Chair White On The FCPA

September 23, 2016

Mary Jo White, chair of the Securities and Exchange Commission, testifies to the House Financial Services Committee about the effects of the Volcker Rule on employment in Washington on February 5, 2014.      REUTERS/Joshua Roberts    (UNITED STATES - Tags: POLITICS BUSINESS) - RTX189AM

Earlier this week SEC Chair Mary Jo White delivered this speech.

Her speech focused on “a few priority areas that illustrate the dimensions of the SEC’s international role” and a substantial portion of the speech focused on the Foreign Corrupt Practices Act including how “vigorous enforcement of the FCPA is a high priority for both the SEC and DOJ.”

On individual actions, Chair White stated: “we prioritize charging individuals involved in bribery schemes where we have the necessary evidence and jurisdiction over the offender [and that] holding individuals accountable for their misconduct remains one of the most powerful deterrents in any enforcement area.”

Keep in mind however the following facts. In 2016 thus far, 70% of corporate SEC FCPA enforcement actions have not involved any related individual charges and since 2008 approximately 80% of corporate SEC FCPA enforcement actions have not involved any related individual charges.

The remainder of this post excerpts the FCPA portion of Chair White’s speech.

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