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Friday Roundup

By on April 7, 2017 in Braskem SA, Enforcement Agency Policy, FCPA Inc., Monitor, Odebrecht, Related Civil Litigation, SEC, Siemens
Roundup

Clayton responds, from the dockets, Bitkower to FCPA Inc., and a student writing competition. It’s all here in the Friday roundup.

Clayton Responds

This previous post highlighted the FCPA portion of the recent confirmation hearing of SEC Chair nominee Jay Clayton. In follow-up written questions, Senator Sherrod Brown (D-OH) asked: “The Foreign Corrupt Practices Act (FCPA) forbids U.S. companies and their subsidiaries from paying foreign government officials to obtain or retain business. What is your specific plan for enforcement of the FCPA.”

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Why The Odebrecht / Braskem FCPA Enforcement Action Is Unique (And Interesting)

By on December 26, 2016 in Braskem SA, Foreign Issuers, Foreign Policy, Odebrecht, Petrobras
Unique

The Foreign Corrupt Practices Act enforcement action last week against Odebrecht / Braskem was unique – specifically the DOJ’s and SEC’s bribery charges against the companies relating to conduct with alleged Brazilian “foreign officials.”

What makes it unique is that it is believed to be the first FCPA enforcement action in history against a foreign issuer for allegedly bribing its own domestic officials. In other words, a large portion of the U.S. enforcement action against the Brazilian companies is that they bribed Brazilian officials.

All previous FCPA enforcement actions against foreign issuers have not addressed this dynamic. In other words, German companies Siemens and Daimler did not bribe German officials; French companies Alstom, Total and Technip did not bribe French officials; Japanese company JGC did not bribe Japanese officials, etc., etc.

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Odebrecht / Braskem Bribery Schemes Net Approximate $420 Million FCPA Enforcement Action

By on December 21, 2016 in 2016 Enforcement Actions, Angola, Argentina, Braskem SA, Brazil, Colombia, DOJ Enforcement Action, Dominican Republic, Ecuador, Foreign Issuers, Guatemala, Internal Controls, Jurisdiction, Mexico, Monitor, Mozambique, Obstruction Charges, Odebrecht, Panama, Permits / Licenses / Customs / Tax, Peru, SEC Enforcement Action, Statute of Limitations, Third Parties, Venezuela
oder

Yesterday, the DOJ and SEC announced (here and here) a Foreign Corrupt Practices Act enforcement action against Odebrecht S.A. (a Brazilian holding company) and Braskem S.A. (a Brazil-based petrochemical company in which Odebrecht owns 50.1% of the voting shares, 38.1% of the total share capital and which Odebrecht “effectively controlled” according to the DOJ). Braskem has American Depositary Receipts registered with the SEC and traded on the NYSE and thus the enforcement action also included an SEC component.

Perhaps because of the less than clear DOJ release (clear once one actually reads the original source documents), this action is being reported in various places as a $3.5 billion FCPA enforcement action. While that figure represents the overall global settlement amount (Brazil and Swiss law enforcement also brought related actions), yesterday’s action was most certainly not a $3.5 billion FCPA enforcement action. Not even close.

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Friday Roundup

By on October 14, 2016 in Braskem SA, Declination Decisions, Embraer, Foreign Issuers, Grifols S.A., Jurisdiction, SEC
Roundup

A focus on the numbers, scrutiny alerts and updates, legal extortion?, and who said shareholder meetings are dull. It’s all here in the Friday roundup.

A Focus on the Numbers

Earlier this week, the SEC announced its FY2016 enforcement results and how it filed 868 enforcement actions, a “new single year high for SEC enforcement actions.” As noted in this Wall Street Journal article, this “marks the third year in a row the 82-year old agency has filed the most cases in its history.”

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In Times Like These, We Need To Ask: Is The FCPA Effective?

By on April 5, 2016 in Advanced Drainage Systems, Biomet, BP, Braskem SA, Elbit Imaging, Odebrecht, Unaoil, Zimmer Holdings
question marks2

In passing the Foreign Corrupt Practices Act, Congress anticipated that the “criminalization of foreign corporate bribery will to a significant extent act as a self-enforcing preventative mechanism.” Likewise since the FCPA’s earliest days, the DOJ has recognized that the “most efficient means of implementing the FCPA is voluntary compliance by the American business community.”

In short, the FCPA was never intended to be just a mechanism to achieve “hard enforcement” (actual enforcement actions), but more a mechanism to achieve “soft enforcement” (compliance) in furtherance of the statutory objective of  reducing bribery and corruption. Indeed, as stated by the Sixth Circuit in Lamb v. Phillip Morris Inc., 915 F.2d 1024 (1990) and repeated by several other courts, the FCPA’s statutory scheme “clearly evinces a preference for compliance in lieu of prosecution.”

Yet, as the FCPA nears its 40th anniversary those in this space need to start asking the question of whether the FCPA – as currently written and currently enforced – has been effective?

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