The First FCPA Enforcement Action Of 2017 Is A $13 Million Joke
On Friday, the SEC announced the first Foreign Corrupt Practices Act enforcement action of 2017 against Mondelēz International, Inc.
The basic findings in this short administrative action are the following: (i) in February 2010, Kraft Foods (which re-named itself Mondelez International in 2012) acquired Cadbury (a U.K.-based confectionary and snack beverage company that had securities registered with the SEC) and its subsidiaries, including Cadbury India; (ii) in early 2010 Cadbury India retained an agent to interact with Indian government officials to obtain licenses and approvals for a chocolate factory; (iii) Cadbury India failed to conduct appropriate due diligence on and monitor the activities of the agent which “created the risk” that funds paid to the agent (approximately $100,000) could be used for improper or unauthorized purposes and (iv) Cadbury’s India’s books and records did not accurately and fairly reflect the natures of the services rendered by the agent.
Without admitting or denying the SEC’s findings, Mondelez agreed to pay a $13 million civil penalty.
This enforcement action is a complete joke (as is the fact that the scrutiny began in February 2011).