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In A Highly Unusual Development, DOJ Brings A $19.6 Million Enforcement Action Against Beam Approximately 2.5 Years After The SEC’s Related Action

Beam

DOJ and SEC Foreign Corrupt Practices Act enforcement actions against issuers based on the same core conduct are relatively common. However, such actions are nearly always coordinated and announced on the same day.

In a highly unusual (although not unprecedented) development, the DOJ announced yesterday a $19.6 million FCPA enforcement action against Beam Suntory Inc. based on the same core conduct in India at issue in the SEC’s July 2018 FCPA enforcement action against the company (see here).

Another unusual aspect of the Beam DOJ action was the DOJ’s position that the company did not voluntarily disclose. In contrast, in the 2018 SEC enforcement action the SEC said that the company voluntarily disclosed.

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DOJ / SEC Announce Net $1.66 Billion (The Largest Of All-Time) FCPA Enforcement Action Against Goldman Sachs In Connection With 1MDB Fund

Goldman

As highlighted in this prior post, in November 2018 the DOJ announced criminal charges against former Goldman Sachs employees Roger Ng and Tim Leissner, and Low Taek Jho (Jho Low – an individual “known to be close to various high-ranking officials in Malaysia and Abu Dhabi” who “worked as an intermediary in related to 1MDB and other foreign government officials on numerous financial transactions and projects involving Goldman and others) 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.

This prior post asked: what does this mean for Goldman Sachs?

We now know the answer as the DOJ and SEC announced (here and here) a net $1.66 billion FCPA enforcement action against Goldman Sachs and a related entity. This represents the largest FCPA enforcement action of all-time (see here for the prior top ten list).

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Brazilian Company Bribes Brazilian Officials, U.S. Collects Net $155 Million In FCPA Enforcement Action

J&F

This recent post posed the question of whether “foreign” in the FCPA’s “foreign official” element means as it relates to the U.S. or as it relates to the specific company at issue. The post highlighted how in recent years the FCPA enforcement agencies have adopted the former interpretation in bringing FCPA enforcement actions against foreign companies for allegedly bribing their own “domestic” officials – but “foreign” as it relates to the U.S.

In yet another example, the DOJ and SEC announced yesterday (see here and here) that J&F Investimentos S.A. (J&F a private investment holding company based in Brazil that owns approximately 250 companies primarily involved in the meat and agriculture business) and a related entity resolved a net $155 million FCPA enforcement action for allegedly bribing Brazilian officials.

The enforcement action involved a: (i) DOJ component against J&F resolved through a plea agreement in which the company paid net $128.2 million; and (ii) an SEC component against J&F, a related entity, and two individuals in which the related entity paid approximately $26.8 million and the two individuals each paid a $550,000 civil penalty.

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Individual Enforcement Actions In Connection With Sargeant Marine Matter Span Several Years

Sargeant Marine

[Just when you think 2020 can’t get any more strange, there were no SEC FCPA enforcement actions during the final days of September. Why is this strange? Because as highlighted in this prior post, approximately 15% of SEC FCPA enforcement actions in recent years have occurred during the last week of September. This was the first year since 2014 that there was not an SEC FCPA enforcement action in the final days prior to the SEC’s fiscal year ending on September 30th. COVID-19 related? Perhaps, but through three quarters thus far in 2020 FCPA enforcement has been generally consistent with prior years numbers].

Prior posts here and here highlighted the DOJ’s recent Foreign Corrupt Practices Act enforcement action against Sargeant Marine (SMI) in connection with bribery schemes in Brazil, Venezuela, and Ecuador.

This post highlights the related individual actions against seven individuals (five individuals for FCPA offenses and two alleged foreign officials for money laundering). What is interesting is that there were no individual charges in connection with the Ecuador conduct alleged in the SMI enforcement action and that the individual action began in September 2017 –  a full three years prior to the SMI enforcement action.

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Sargeant Marine Cements $16.6 FCPA Resolution With DOJ Regarding Bribery Schemes In Brazil, Venezuela, And Ecuador

Sargeant Marine

Earlier this week, the DOJ announced that Sargeant Marine Inc. (SMI – an asphalt company based in Florida) “pleaded guilty and agreed to pay $16.6 million to resolve foreign bribery charges stemming from conduct by the company and its employees and agents in Brazil, Venezuela and Ecuador.”

The total criminal penalty was actually $90 million, but because of SMI’s “inability to pay” the settlement amount was only $16.6 million.

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