Foreign Corrupt Practices Act enforcement actions against a company based on the conduct of a Chinese subsidiary are numerous (including instances in which the Chinese subsidiary is part of the resolution process).
FCPA enforcement actions against Chinese companies for violations of the FCPA’s books and records and internal controls provisions outside the context of foreign bribery (so-called non-FCPA, FCPA enforcement actions) have occurred. (See here, here and here for instance).
The FCPA enforcement action earlier this week involving BIT Mining (500.com) is believed to be the first FCPA enforcement action in history to involve a “Chinese issuer.”
Well, sort of.*
At least as close to a “Chinese issuer” “resolving” an FCPA enforcement action without technically a “Chinese issuer” “resolving” an FCPA enforcement action.
Technically, 500.com was not involved in the DOJ or SEC resolutions for the simple reason that it no longer exists. And technically 500.com was not even a China issuer (it was incorporated in the Cayman Islands “with headquarters and major business operations in Shenzhen, China).
Even so, the conduct at issue in the enforcement action took place between 2017 and 2019 when 500.com had American Depositary Shares (ADSs) traded on the New York Stock Exchange.
Since 2021, 500.com is now known as BIT Mining (a crypto assets mining business incorporated in the Cayman Islands and headquartered in Akron, Ohio. BIT Mining’s ADSs are traded on the NYSE.
Even though BIT Mining the entity technically resolving the DOJ and SEC enforcement actions, none of the conduct involved that entity.
So, what do you think?
Is this the first FCPA enforcement action to involve a “Chinese issuer”?
[As highlighted in this prior post, in 2017 Sinovac Biotech, a company with shares traded on NASDAQ, was the focus of media scrutiny for allegedly bribing a member of the Chinese Food and Drug Administration to assist its vaccine clinical trial and approval and the company disclosed an SEC investigation into the conduct. However, in 2018 the company disclosed that the DOJ and SEC had closed investigations into the matter]
