The U.K.’s Second DPA Is Much Different Than Its First
Deferred prosecution agreements (not to mention non-prosecution agreements) are problematic across various points on a spectrum.
As U.S. use of such agreements has demonstrated (see here), alternative resolution agreements allow egregious instances of corporate conduct to be resolved too lightly without adequate sanctions and without achieving maximum deterrence (“under prosecution”) while at the same time, because of the “carrots” and “sticks” relevant to resolving corporate criminal liability, facilitate the “over-prosecution” of business conduct in instances in which it is an open question whether a legal violation actually occurred.
Deceived By Its Indirect Chinese Subsidiary, Johnson Controls Agrees To Pay $14.4 Million To Resolve SEC FCPA Enforcement Action, DOJ Markets Another “Declination”
According to the SEC, “several members” of Johnson Controls indirect Chinese subsidiary “colluded with each other and circumvented and manipulated JCI’s internal and financial controls …”.
The end result was this SEC administrative order released yesterday in which the SEC found that Johnson Controls (JCI) violated the books and records and internal controls provisions of the Foreign Corrupt Practices Act. Without admitting or denying the SEC’s findings, JCI agreed to pay approximately $14.4 million.
Also yesterday, the DOJ released this June 21st letter to JCI’s counsel stating that it has closed its inquiry “concerning possible violation of the FCPA … despite the bribery by employees of JCI’s subsidiary in China.” The DOJ’s letter is the focus of a separate post today.
Danish Subsidiary Exposes Analogic To $14.9 Million Enforcement Action
Yesterday the DOJ and SEC announced (see here and here) a parallel Foreign Corrupt Practices Act enforcement action against medical device manufacturer Analogic Corp. and BK Medical ApS (Analogic’s Danish subsidiary) in which the entities agreed to pay approximately $14.9 million.
The conduct at issue involved alleged improper payments by BK Medical, primarily in Russia through distributors, and the government alleged that BK Medical took various steps to conceal its conduct from Analogic.
The enforcement action involved a DOJ non-prosecution agreement with BK Medical in which the company agreed to pay a $3.4 million criminal penalty and an SEC administrative order against Analogic in which the company agreed to pay approximately $11.5 million in disgorgement and prejudgment interest. In connection with the same administrative order, the SEC also announced that “Lars Frost, BK Medical’s former Chief Financial Officer, agreed to pay a $20,000 civil penalty to settle charges that he knowingly circumvented the internal controls in place at BK Medical and falsified its books and records.
Two For Tuesday In FCPA Enforcement Land – Akamai Technologies
Just when you think you’ve seen all possible combinations of Foreign Corrupt Practices Act enforcement, along comes yesterday’s “two for Tuesday” in which the SEC announced in the same press release two non-prosecution agreements against two separate companies and the DOJ simultaneously released two so-called “declination” letters against the same two companies.
This post highlights the enforcement action against Akamai Technologies and today’s first post highlights the enforcement action against Nortek Inc.. From there future posts will highlight issues to consider from the enforcement actions (and there are many including the question of just what charges – based on the SEC’s statement of facts – did the DOJ actually decline?”).
Two For Tuesday In FCPA Enforcement Land – First Up Nortek
Just when you think you’ve seen all possible combinations of Foreign Corrupt Practices Act enforcement, along comes yesterday’s “two for Tuesday” in which the SEC announced in the same press release two non-prosecution agreements against two separate companies and the DOJ simultaneously released two so-called “declination” letters against the same two companies.
This post highlights the enforcement action against Nortek Inc. and a second post today highlights the enforcement action against Akamai Technologies. From there future posts will highlight issues to consider from the enforcement actions (and there are many including the question of just what charges – based on the SEC’s statement of facts – did the DOJ actually decline?”).