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The UK Serious Fraud Office 2020 Deferred Prosecution Agreement Guidance: Something Old and Something New

October 30, 2020

A guest post from Gibson Dunn attorneys Sacha Harber-Kelly and Steve Melrose.

Mr. Harber-Kelly is a former prosecutor at the SFO and was appointed to lead the SFO’s engagement in the cross-governmental working group which devised the DPA legislative framework, and subsequently appointed to draft the DPA Code of Practice, which sets out how prosecutors will operate the DPA regime.

On October 23, 2020, the UK Serious Fraud Office published a new chapter from its internal Operational Handbook, which it describes as “comprehensive guidance on how we approach Deferred Prosecution Agreements (DPAs), and how we engage with companies where a DPA is a prospective outcome.”

At the time of its publication, the Director of the SFO, Lisa Osofsky, remarked, “Publishing this guidance will provide further transparency on what we expect from companies looking to co-operate with us.” Director Osofsky’s full remarks are here.

The 2020 DPA Guidance (“the Guidance”) is here.

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Additional Issues To Consider From The Goldman Enforcement Action

October 29, 2020

This prior post highlighted the net $1.66 billion Foreign Corrupt Practices Act enforcement action against Goldman Sachs and a related entity.

This prior post posed the question, based on the government’s allegations, what should happen when compliance is decent (and often good), but not great? The prior post also highlighted how the Goldman enforcement action was much different than certain other top ten FCPA enforcement actions.

This prior post discussed various developments related to the Goldman FCPA enforcement action.

This post continues the analysis by highlighting additional issues to consider from the enforcement action.

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In A Highly Unusual Development, DOJ Brings A $19.6 Million Enforcement Action Against Beam Approximately 2.5 Years After The SEC’s Related Action

October 28, 2020

DOJ and SEC Foreign Corrupt Practices Act enforcement actions against issuers based on the same core conduct are relatively common. However, such actions are nearly always coordinated and announced on the same day.

In a highly unusual (although not unprecedented) development, the DOJ announced yesterday a $19.6 million FCPA enforcement action against Beam Suntory Inc. based on the same core conduct in India at issue in the SEC’s July 2018 FCPA enforcement action against the company (see here).

Another unusual aspect of the Beam DOJ action was the DOJ’s position that the company did not voluntarily disclose. In contrast, in the 2018 SEC enforcement action the SEC said that the company voluntarily disclosed.

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Goldman – What Should Happen When Compliance Is Decent (And Often Good), But Not Great?

October 27, 2020

The recent Foreign Corrupt Practices Act enforcement action against Goldman Sachs was the largest in FCPA history in terms of actual settlement amount ($1.66 billion).

Yes, the conduct at issue involved large bribe payments (according to the DOJ approximately $1.6 billion). Yes, the conduct at issue resulted in (according to the DOJ) Goldman obtaining “in excess of $600 million in fees and revenue across its divisions, and increased Goldman’s stature in SE Asia.” Yes, the conduct of the culpable Goldman employees criminally charged (Tim Leissner and Roger Ng) was egregious.

Viewed through the strict lens of respondeant superior, perhaps the record-setting FCPA enforcement action was justified. In this regard, the Goldman press release nicely stated in plain English: “We all share in the benefits when our colleagues perform well for our clients. The opposite must be true as well.  When a colleague knowingly violates a firm policy, or much worse, the law, we – as a firm – have to accept responsibility and recognize the broader failure that individual behavior represents for our firm.”

However, based on the DOJ’s (and SEC’s) allegations, the Goldman enforcement action was much different than certain other top ten FCPA enforcement actions.

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Goldman – Related Developments

October 26, 2020

As highlighted in this prior post, last week the DOJ and SEC announced a net $1.66 billion Foreign Corrupt Practices Act enforcement action (the largest ever) against Goldman Sachs in connection with the IMDB fund.

As highlighted below, in connection with the same core conduct, the Federal Reserve Board also announced that it had fined Goldman $154 million for engaging in “unsafe and unsound practices.”

In addition, as highlighted below, the SEC issued a temporary order granting Goldman affiliated entities an exemption from the Investment Company Act’s prohibition on serving or acting an investment advisor or depositor upon the conviction of a felony.

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