Beverage Industry Archives

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

By Mike Koehler on October 28, 2020 in 2020 Enforcement Action, Beam Inc., Beverage Industry, Corrupt Intent, DOJ Enforcement Action, Foreign Lawyers, India, Permits / Licenses / Customs / Tax, SOX Certification Issues, Uncategorized

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.

200,000 Permits And Approvals Each Year To Do Business

By Mike Koehler on November 12, 2019 in Beverage Industry, India

Why do Foreign Corrupt Practices Act enforcement actions happen?

Often times – as highlighted numerous times on these pages – the root cause of an FCPA enforcement action is a foreign law or regulation that results in a real point of contact between a real company’s employees or agents and a real “foreign official.”

Regulatory burdens (ranging from customs procedures, licensing and certification requirements, foreign government procurement policies, etc.) create bureaucracy, bureaucracy creates interactions with foreign officials, and the more interactions with foreign officials, the greater the FCPA risk will be. It really is not that complex of a formula.

Issues To Consider From The Beam Enforcement Action

By Mike Koehler on July 10, 2018 in Beam Inc., Beverage Industry, Gray Cloud, India, Root Causes

This post highlighted the SEC’s recent $8.2 million FCPA enforcement action against Beam Inc. (now known as Beam Suntory Inc.) concerning conduct in India. This post continues the analysis by highlighting additional issues to consider.

Time Line

As highlighted in this prior post, Beam was under FCPA scrutiny since late 2012. Thus from start to finish, its FCPA scrutiny lasted approximately 6 years.

Beam Pours $8.2 Million Into The Treasury And Becomes The Latest Alcoholic Beverage Company To Resolve An FCPA Enforcement Action Based On India Conduct

By Mike Koehler on July 3, 2018 in 2018 Enforcement Actions, Beam Inc., Beverage Industry, Books and Records, India, Internal Investigation Issues, Merger Issues, Permits / Licenses / Customs / Tax, SEC Enforcement Action, Third Parties

First it was alcoholic beverage company Diageo based on conduct in India and elsewhere (see here).

Then it was alcoholic beverage company ABInBev based on conduct in India (see here).

Yesterday, the SEC announced yet another Foreign Corrupt Practices Act enforcement action against an alcoholic beverage company for conduct in India.

This time it was Beam Inc. (now known as Beam Suntory Inc.) which up until April 2014 had shares traded on the New York Stock Exchange until Suntory Holdings Limited (a Japanese company) acquired Beam which thereafter delisted from the NYSE.

Issues To Consider From The AB InBev Enforcement Action

By Mike Koehler on October 5, 2016 in Anheuser-Busch InBev, Beverage Industry, Books and Records, Disgorgement, Gray Cloud, Internal Controls, Joint Venture, Root Causes

This previous post went in-depth into the SEC’s Foreign Corrupt Practices Act enforcement action against AB InBev.

This post continues the analysis by highlighting additional issues to consider from the enforcement action.

Timeline

Per the SEC’s order, the SEC began its inquiry in October 2011.

Thus from start to finish, AB InBev’s FCPA scrutiny lasted just shy of five years.

It is absolutely inexcusable on any level for FCPA scrutiny to last five years. If the SEC wants the public to view its FCPA enforcement program as legitimate, credible, and effective, it must resolve instances of FCPA scrutiny much faster.

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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

200,000 Permits And Approvals Each Year To Do Business

Issues To Consider From The Beam Enforcement Action

Beam Pours $8.2 Million Into The Treasury And Becomes The Latest Alcoholic Beverage Company To Resolve An FCPA Enforcement Action Based On India Conduct

Issues To Consider From The AB InBev Enforcement Action

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