This recent post highlighted the $6.5 million enforcement action against 3M based on findings that the company was duped by certain China subsidiary employees.
This recent post discussed how the type of conduct at issue in the 3M enforcement action would seem to fit squarely within prior SEC policy for when an enforcement action would not be warranted.
This post highlights additional issues to consider from the enforcement action.
Timeline
The SEC announced today that 3M resolved a $6.5 million Foreign Corrupt Practices Act enforcement.
The basics are as follows.
Approximately 6-10 years ago, a former Marketing Manager of a 3M China-based subsidiary “secretly” provided “tourism activities” for Chinese health care officials.
The Marketing Manager “would create a travel itinerary that included various legitimate business, training and marketing activities for submission to 3M-China’s compliance personnel for approval,” however there were “alternate itineraries” that “consisted of various tourism activities at or near the location of the educational events.”
There is no suggestion that anyone at 3M headquarters knew of or approved of the conduct. Indeed, subsidiary employees, among other things, “falsified internal compliance documents that affirmatively denied and/or omitted mention of the Tourism Activities that were planned as part of the overseas trip.”
Remember when a top-ranking DOJ official said in 2017 (see here) that the DOJ’s “intent is for our FCPA investigations to be measured in months, not years”?
Me too.
That was pretty funny.
As highlighted here, in mid- 2019 3M disclosed FCPA scrutiny and the company recently disclosed:
Remember when a top-ranking DOJ official said in 2017 (see here) that the DOJ’s “intent is for our FCPA investigations to be measured in months, not years”?
Me too. That was pretty funny.
Set forth below are scrutiny updates from companies that have been under FCPA scrutiny for approximately three years.
Pfizer
As highlighted here, Pfizer (a company that resolved a $60 million FCPA enforcement action in 2012 concerning conduct in Bulgaria, China, Croatia, Czech Republic, Italy, Kazakhstan, Russia, and Serbia) disclosed additional FCPA scrutiny in mid-2019.
Sentenced, another one dismissed, scrutiny alerts, clawback, and pardon me for being that guy but … It’s all here in the Friday roundup.
Sentenced
As highlighted in prior posts here and here, in January 2017 the DOJ announced a $170 million Foreign Corrupt Practices Act enforcement action against U.K. based Rolls-Royce concerning conduct in Thailand, Brazil, Kazakhstan, Azerbaijan, Angola, Iraq and elsewhere.
