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Glencore Resolves An Approximately $443 Million Net FCPA Enforcement Action

glencore

In mid-2018 Glencore (a commodities company incorporated in the United Kingdom and headquartered in Switzerland disclosed that it was under scrutiny by the DOJ. (See here for the prior post).

Specifically, the company disclosed:

“Glencore Ltd, a subsidiary of Glencore plc, has received a subpoena dated 2 July, 2018 from the US Department of Justice to produce documents and other records with respect to compliance with the Foreign Corrupt Practices Act and United States money laundering statutes.  The requested documents relate to the Glencore Group’s business in Nigeria, the Democratic Republic of Congo and Venezuela from 2007 to present. Glencore is reviewing the subpoena and will provide further information in due course as appropriate.”

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Fifth Circuit Concludes That An SEC FCPA Enforcement Approach Is Unconstitutional

Judicial Decision

SEC administrative settlements in the FCPA context were rare prior to 2010 largely because the SEC could not impose monetary penalties in such proceedings absent certain exceptions.

However, in the Dodd-Frank Wall Street Reform Act of 2010 Congress granted the SEC authority to impose civil monetary penalties in administrative proceedings in which the SEC staff seeks a cease-and-desist order. Specifically, Section 929P(a) of Dodd-Frank eliminated prior limitations and expanded the SEC’s ability to obtain monetary penalties in administrative proceedings from any person who violates the federal securities laws.

Since 2010, the vast majority of issuer FCPA enforcement actions have been administrative proceedings and in many of these actions the SEC has imposed a monetary penalty. For instance, the SEC’s enforcement action against Goldman Sachs involved an administrative order in which the SEC imposed a $400 million penalty (see here). The SEC’s enforcement action against MTS involved an administrative order in which the SEC imposed a $100 million penalty (see here). The SEC’s enforcement action against Credit Suisse involved an administrative order in which the SEC imposed a $65 million penalty (see here).

Recently, the Fifth Circuit held in Jarkesy v. SEC that the SEC’s practice of imposing civil monetary penalties in administrative proceedings was unconstitutional because Congress delegated its legislative power to the SEC without providing an intelligible principle by which the SEC could exercise the delegated power. Although Jarkesy was not a Foreign Corrupt Practices Act enforcement action, the decision (for the reasons mentioned above) is most certainly FCPA relevant.

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Martinelli Brothers Sentenced To Prison In Connection With Odebrecht Bribery Scheme

Prison

As highlighted here, in November 2021 announced the unsealing of a 2020 criminal complaint against agents associated with Odebrecht in connection with the company’s 2016 FCPA enforcement action (see here for the prior post).

Brothers Luis Enrique Martinelli Linares and Ricardo Alberto Martinelli Linares (both citizens of Panama and Italy and the sons of former Panamanian President Ricardo Martinelli) allegedly “participated in the Odebrecht bribery scheme by, among other things, serving as intermediaries for bribe payments and the provision of other things of value that Odebrecht offered and provided to the Panama Government Official (their father). The complaint alleged that, among other things, the defendants “established offshore bank accounts in the names of offshore shell companies to receive and disguise bribe payments from Odebrecht made for the benefit of the Panama Government Official.

The brothers pleaded guilty and were recently sentenced to 36 months in prison and were ordered to forfeit more than $18.8 million, pay a $250,000 fine, and serve two years’ supervised release. (See here for the DOJ release).

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Free Webinar – Exploring The Mechanisms Used to “Fund” Bribery Schemes

funding

On June 9th, I will be participating in a free webinar hosted by Lextegrity titled “Exploring the Mechanisms Used to ‘Fund’ Bribery Schemes.”

Generally speaking, a corporate bribery scheme often involves the creation of a “pot of money” within a business organization to “fund” a scheme. In such cases, employees often use existing corporate mechanisms (beyond third parties) to fund these schemes. This webinar will highlight various examples from recent FCPA enforcement actions.

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Elevate Your FCPA Knowledge And Practical Skills With The FCPA Institute Online

InstituteOnline

The FCPA Institute Online is the most comprehensive online FCPA training course available and is a time and cost efficient way for in-house and outside counsel; compliance professionals; finance, accounting, and auditing professionals; business executives and others to elevate their FCPA knowledge and practical skills.

The FCPA Institute Online consists of over 12 hours of narrated instruction from Professor Koehler (as well as availability to answer questions) and guides professionals through the following FCPA topics in an integrated and cohesive manner.

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