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Facade Of Enforcement Across The Pond

By on January 8, 2020 in 2019 Enforcement Actions, Andrew Bell, Dr Cansun, Gaining Access to Confidential Documents, Inability to Pay, Natalie Pearce, South Korea, United Kingdom
Laughable

A facade of Foreign Corrupt Practices Act enforcement is when a business organization – often for reasons of risk aversion and efficiency – agrees to resolve an enforcement action in the absence of any judicial scrutiny even though no employee or agent of the company (business organizations obviously can only act through real human beings) was charged. (See here for the article “The Facade of FCPA Enforcement” and here for the article “Measuring the Impact of NPAs and DPAs on FCPA Enforcement.”)

Even more troubling is when employees are charged, put the government to its burden of proof, are acquitted yet the business organization still resolves an enforcement action based on the same underlying conduct.

This 2014 post, published after the United Kingdom formally adopted deferred prosecution agreements, was titled “The U.K. Enters the Facade Era.” As discussed below, recently there was a major facade moment in the U.K.

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Based On The Same Core Conduct Alleged In The 2018 Criminal Action, The SEC Also Brings Enforcement Action Against Former Goldman Executive Tim Leissner

By on December 17, 2019 in 2019 Enforcement Actions, Goldman Sachs, SEC Enforcement Action, Tim Leissner
Leissner

As highlighted in this prior post, in November 2018 the DOJ announced a Foreign Corrupt Practices Act and related enforcement action against Tim Leissner (the former Southeast Asia Chairman at Goldman Sachs) and others associated with Goldman Sachs for paying bribes to various Malaysian and Abu Dhabi officials in connection with 1Malaysia Development Berhad (1MDB), Malaysia’s state-owned and state-controlled investment development company.

Leissner pleaded guilty and was ordered to forfeit $43.7 million as a result of his crimes. As highlighted in this prior post, in March 2019 – based on the same core conduct – the Federal Reserve brought an enforcement action against Leissner in which he consented to a permanent ban from the banking industry and agreed to pay a $1.4 million fine.

Yesterday, the SEC returned to the same core action and announced an FCPA enforcement action against Leissner. The action was largely ceremonial as the SEC’s order requires Leissner to pay disgorgement of $43.7 million which will be offset by the amounts paid pursuant to the forfeiture order in the parallel criminal action.

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Swedish Company Bribes Foreign Officials, U.S. Collects $1.06 Billion In Record-Setting FCPA Enforcement Action

By on December 9, 2019 in 2019 Enforcement Actions, China, Djibouti, DOJ Enforcement Action, Ericsson, Foreign Issuers, Gaining Access to Confidential Documents, Indonesia, SEC Enforcement Action, Telecommunications Industry, Third Parties, Travel and Entertainment, Vietnam
ericsson

Late last Friday, the DOJ and SEC announced (here and here) a record-setting Foreign Corrupt Practices Act action Swedish telecom company Ericsson (a company with American Depositary Shares traded in the U.S.). The $1.06 billion settlement amount is the largest net FCPA settlement amount in history surpassing the $850 million FCPA enforcement action against Russian telecom company MTS in March 2019 (see here).

The enforcement action concerned conduct in Djibouti, China, Vietnam, Kuwait, Indonesia, and Saudi Arabia.

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South Korean Company Bribes Brazilian Officials Through Brazilian Agents, U.S. Collects $37.7 Million

By on November 25, 2019 in 2019 Enforcement Actions, Brazil, Foreign Non-Issuer Company, Jurisdiction, Oil and Gas Industry, Pride International, Samsung Heavy Industries, Valaris
SamsungHeavy

Last Friday, the Department of Justice announced that Samsung Heavy Industries (SHI – a South Korea-based engineering company that provides shipbuilding, offshore platform construction, and other construction and engineering services with a branch office in Houston) agreed to resolve a net $37.5 million Foreign Corrupt Practices Act enforcement action.

As highlighted below, the conduct at issue involved SHI’s relationship with Pride International (which is now part of Valaris plc) through which it sold a $636 million drillship to Petrobras.

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DOJ Criminally Charges Former Braskem CEO Jose Grubisich In Connection With The Same Core Conduct Alleged In The 2016 Corporate Enforcement Action

By on November 21, 2019 in 2019 Enforcement Actions, Braskem SA, Brazil, Chemical Industry, DOJ Enforcement Action, Executive Enforcement Action, Foreign Nationals, Individual Enforcement Action, Odebrecht
grubisich

As highlighted in this prior post, in late 2016 the DOJ and SEC brought a Foreign Corrupt Practices Act enforcement action against Odebrecht S.A. (a Brazilian holding company) and Braskem S.A. (a Brazil-based petrochemical company with shares traded on the NYSE in which Odebrecht owned a majority of voting shares).

The conduct at issue was egregious and largely centered on a business unit, the Division of Structured Operations, housed within an Odebrecht subsidiary that allegedly served as little more than a bribe-paying department for the benefit of Odebrecht and Braskem. According to the resolution documents, former senior executives authorized approximately $788 million in bribes, largely through the Division of Structured Operations, to alleged foreign officials in at least twelve countries. While the principal focus of the DOJ’s action (and the exclusive focus of the SEC action) concerned conduct in Brazil including the companies relationships with Petrobras, the DOJ action also alleges improper payments in Angola, Argentina, Brazil, Colombia, Dominican Republic, Ecuador, Guatemala, Mexico, Mozambique, Panama, Peru, and Venezuela.

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