It’s been said that strange things happen in threes.
Until very recently, the last time the SEC was challenged in a Foreign Corrupt Practices Act enforcement action was 2002 in the Eric Mattson and James Harris enforcement action. As noted in this previous post, the SEC lost.
After a 10 year period enforcing the FCPA against cooperating corporate and individual defendants, this past summer Mark Jackson and James Ruehlen’s challenged the SEC in an FCPA enforcement action. (See here for the briefing, oral arguments are set for Halloween).
This post last week noted that former Maygar Telekom executives Elek Straub, Andras Balogh and Tamas Morvai plan on challenging the SEC’s enforcement action against them. Briefing is to be completed in mid-December and oral arguments are scheduled for mid-January 2013.
Strange things happen in threes.
Last week, Chris Matthews (Wall Street Journal – Corruption Currents) reported here that former Siemens executive Herbert Steffen has filed a motion to dismiss the SEC’s charges against him.
As noted in this previous post, Steffen is among a group of former Siemens executives charged by the SEC (and DOJ) in connection with the Argentina conduct at issue in the widespread Siemens enforcement action from 2008.
In his motion to dismiss (here) Steffen moves to dismiss the SEC complaint for lack personal jurisdiction and for the SEC’s failure to file the complaint within the applicable five-year statute of limitations.
The motion states as follows.
“Mr. Steffen, 74 years of age, is a German citizen residing in Germany. He is trained as an engineer, and spent his entire career at Siemens Aktiengesellschaft (“Siemens”) and its subsidiaries with postings in Germany, Brazil, and Argentina. He was never employed in the United States, and never travelled to the United States on business for Siemens during the entire period alleged in the complaint. The complaint alleges he had managerial positions in Siemens’ Argentina business from 1983 through 1989 and again in 1991. There are no allegations of any improprieties during the period he had such responsibilities. He retired from Siemens nearly ten years ago and has not been employed since. The complaint alleges that between 2000 and 2003, when Mr. Steffen was Group President of Siemens Transportation Systems in Germany, he was recruited to assist in efforts to recover a contract that the Argentine government planned to terminate. It further alleges that in that capacity he engaged in conduct that the SEC contends violated or aided and abetted violations of Sections 13(b)(2), 13(b)(5) and 30A of the Securities Exchange Act of 1934. The last alleged act attributed to Mr. Steffen in the complaint is alleged to have occurred sometime in “the first half of 2003.” The complaint does not allege that Mr. Steffen ever entered the United States. Nor does it allege that he initiated any contact with anyone in the United States. Although it alleges that he participated in “one or more telephone conversations with defendant Sharef” (another Siemens employee), it expressly alleges that Mr. Sharef “called him from the United States.” Because the complaint fails to plead facts sufficient to establish personal jurisdiction over Mr. Steffen, and because the SEC’s claims are barred because they were not filed within the applicable five-year statute of limitations, we respectfully move to dismiss all the claims against Mr. Steffen pursuant to Fed R. Civ. P. 12.”
The statute of limitations portion of Steffen’s states, among other things, as follows.
“At the September 28, 2012 scheduling conference before this Court, the SEC expressed the view that the applicable statute of limitations was tolled indefinitely because Mr. Steffen is a foreign defendant who has not been in the United States and does not own property in the United States. The SEC’s rationale for this novel argument was language in a sixty-year-old statute that neither expressly mentions tolling the statute of limitations nor has been held by any court to support the interpretation offered by the SEC. The interpretation advanced by the SEC is particularly nonsensical, given the relative ease with which service of process can be effected on foreign defendants residing abroad. Moreover, the proposed interpretation—which as a practical matter would extend indefinitely the statute of limitation as to those individuals with the least connection to the United States— disregards, with no indication from Congress, the strong judicial policy favoring statute of limitations. [… Because the SEC cannot overcome its lack of diligence in pursuing its claims within the five-year statute of limitations, its claims against Mr. Steffen should be dismissed.”
As noted in Chris Matthew’s Corruption Currents post, “the SEC said in a court letter filed last Friday it had reached an agreement with Uriel Sharef, a former member of Siemens’ managing board, to settle the foreign bribery charges pending against him.”
On the same day the SEC enforcement action was brought in December 2011, the SEC announced settlement of the charges against Bernd Regendatz. As to the other defendants charged by the SEC, the docket notes a default by Ulrich Bock and Stephan Singer and that Andrews Truppel was recently served. The docket contains no information as to Carlos Sergi.
As noted in the December 2011 post, the DOJ also charged several former Siemens executives as well. The docket does not contain any entries since December 2011.