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In Connection With A 2006 Argentine Labor Dispute, Chilean Airline Pays U.S. Government $22 Million

July 26, 2016

LATAM

Five months ago, the SEC brought a Foreign Corrupt Practices Act enforcement action against Ignacio Cueto Plaza (“Cueto”), the Chilean CEO of Santiago, Chile based LAN Airlines S.A. (“LAN”) for authorizing payments in 2006 and 2007 to a third party consultant in Argentina in connection with LAN’s attempts to settle disputes on wages and other work conditions between LAN Argentina S.A. (“LAN Argentina”), a subsidiary of LAN, and its employees.

Yesterday, the DOJ and SEC returned to the same conduct by announcing (here and here) parallel FCPA enforcement actions against LAN.

In short, the end result of an old labor dispute between a Chilean airline and Argentine workers is approximately $22 million flowing into the U.S. Treasury because LAN has shares that are traded on a U.S. exchange.

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Eighth Circuit Affirms Dismissal Of Wal-Mart Derivative Actions

July 25, 2016

Wal-Mart

As highlighted in this prior post, in March 2015 a federal district court dismissed eight Wal-Mart shareholder derivative actions (consolidated into one) brought in the aftermath of the company’s FCPA scrutiny.

Last Friday in this opinion, the Eighth Circuit affirmed the dismissal.

Those who predicted that the Wal-Mart derivative actions would set a new standard for director liability were once again proven wrong (see here for the prior post).

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Friday Roundup

July 22, 2016

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:

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FCPA Flash – A Conversation With Jonathan Pickworth Regarding The 5th Anniversary Of The U.K. Bribery Act

July 21, 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 have come to expect from the written posts on FCPA Professor.

This FCPA Flash episode is a conversation with Jonathan Pickworth, a lawyer in the London office of White & Case. Pickworth and his colleagues at White & Case recently published a series titled “UK Bribery Act – 5 Lessons in 5 Years.

In the episode, Pickworth discusses various aspects of the Bribery Act including the still lack of clarity regarding the so-called “failure to prevent bribery” offense as well as the “adequate procedures” defense. Pickworth also opines that the U.K.’s recently adopted deferred prosecution agreement regime is a step backwards in terms of motivating corporate self-reports.

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Criminal Books And Records And Internal Controls Enforcement Actions

July 20, 2016

books and records

I sometimes read certain FCPA commentators and just shake my head in disbelief. Does the author have any regard for facts and/or any interest in conducting basic research to discover the facts?

For instance, in this recent post a commentator states:

“Until now, the Justice Department has not brought a criminal circumvention of internal controls case. If the Justice Department brings such a case, it will be subject to scrutiny. The Justice Department has been very careful when conducting enforcement actions against individuals under the FCPA, and I am sure they will look for the “right set of facts” to bring such a precedent setting case. A criminal prosecution of internal controls and books and records violations will raise the stakes on the wisdom and applicability of the provisions. It is one thing to bring a civil action – it is quite another to bring a criminal action, especially against individuals for violating so-called internal rules and regulations.”

The notion that the DOJ has never brought a criminal enforcement action involving books and records and internal controls violations is just plain false.

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