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Short Seller Believes That Ormat Technologies Is Engaged In “Widespread And Systematic Acts Of International Corruption”


Foreign Corrupt Practices Act scrutiny can arise in a variety of ways. Although not common, occasionally (see here for a prior example) a short seller (generally speaking an investor hoping to profit if a company’s shares fall) alleges that a company is engaged in corruption.

Recently, Hindenburg Research issued this lengthy report suggesting that Ormat Technologies (a Nevada-based geothermal power company with shares traded on the New York Stock Exchange that owns and operates power plants in Kenya, Guadalupe, Guatemala, Honduras and the United States)”has engaged in what we believe to be widespread and systematic acts of international corruption.”

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Yet Another FCPA-Related Securities Fraud Lawsuit Dismissed


It is as predictable as the sun rising in the east and dogs barking.

In the aftermath of a Foreign Corrupt Practices Act enforcement action (or mere instances of FCPA scrutiny), plaintiffs’ lawyers representing shareholders on a contingent fee basis file securities fraud claims against the company and/or certain officers or directors. Such FCPA-related claims are frequently dismissed, but the claims nevertheless continue to be filed.

In the latest example, U.S. District Court Judge Ann Donnelly (E.D.N.Y.) recently granted a motion to dismiss filed by Mobile Telesystems PJSC (“MTS) and various individual defendants. As highlighted in prior posts here and here, in 2019 Russia-based MTS agreed to resolve an $850 million DOJ/SEC FCPA enforcement action concerning a telecom bribery scheme in Uzbekistan (the same scheme that previously resulted in FCPA enforcement actions against VimpelCom and Telia).

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DOJ Announces Individual Criminal Charges In Connection With Ecuador Bribery Scheme


Yesterday, the DOJ announced criminal charges against Jorge Cherrez Mino (pictured) and John Robert Luzuriaga Aguinaga in connection with a bribery scheme in Ecuador.

According to this criminal complaint, Cherrez (a citizen of Ecuador who is currently located in Mexico) served as the manager, president, and director of the “U.S. Investment Fund Companies” (a domestic concern under the FCPA).

According to this separate criminal complaint, Luzuriaga (a citizen of Ecuador who is currently located in Florida) served as the Risk Director for Instituto de Seguridad Social de la Policia Nacional (“ISSPOL” – an Ecuadorian public institution responsible for managing the financial contributions by Ecuadorian police officers toward their social security). The complaint alleges that “ISSPOL was controlled by the government of Ecuador and performed a function that Ecuador treated as its own, and was an ‘instrumentality’ of the Ecuadorian government.”)

Even though the Cherrez complaint provides a jurisdictional basis for FCPA anti-bribery offenses and indeed alleges that Cherrez violated the FCPA, the Cherrez and Luzuriaga complaints charge money laundering offenses.

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FCPA Institute – Zoom (April 12-14)

FCPA Institute - Zoom

Since 2014, the FCPA Institute has elevated the Foreign Corrupt Practices Act knowledge and practical skills of hundreds of professionals from around the world. In the current COVID environment, the traditional two-day in-person FCPA Institute is still not yet possible.

However, there remains a need for FCPA knowledge and skill development. After the inaugural FCPA Institute – Zoom was offered in November 2020 to a worldwide audience, I am pleased to offer another FCPA Institute – Zoom on April 12-14. The FCPA Institute – Zoom will consist of 9 hours of integrated and cohesive instruction (each day from 9 a.m. – noon central) led by Professor Koehler, an FCPA expert with FCPA practice and teaching experience.

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If An Unethical Or Illegal Act Yields Positive Societal Results, Is The Act Necessarily Bad?

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As a college basketball player (many years ago), I organized a Make-A-Wish Foundation fundraiser for a local fan with a serious medical issue. (Good news 20+ years later the individual is doing relatively well).

Recently, Frank Shankwitz (the inspiration behind the Make-A-Wish Foundation) passed away at 77. According to this article, after granting the first “wish,” Shankwitz ran into hurdles when trying to grant the second “wish.” The article states:

“The second wish he and his colleagues granted involved a visit to Disneyland. Calling from Arizona, Mr. Shankwitz (a motorcycle officer with the Arizona Highway Patrol,) had trouble finding anyone at Disneyland to listen to his request for help. Finally, he called back and pretended he had a warrant for a Disney employee’s arrest. That caught the attention of a senior person, who took the call. Mr. Shankwitz admitted he had lied about the warrant. Then he made his plea. Disneyland came through with full cooperation. “Sometimes you have to cheat a little bit,” Mr. Shankwitz said after telling that story in a speech several years ago.”

Today, Make-A-Wish Foundation has 64 chapters in the United States and 36 internationally and has delivered more than 500,000 “wishes” to critically ill children.

The above story raises the question: if an unethical or illegal act yields positive societal results, is the act necessarily bad?

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