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Philips Joins The Corporate FCPA Repeat Offender Club

Philips

The Foreign Corrupt Practices Act corporate repeat offender club is getting so large, that it really is not all that exclusive.

In 2013, Koninklijke Philips Electronics N.V. (“Philips”), a Netherlands-based company with shares listed on the New York Stock Exchange, resolved a $4.5 million FCPA enforcement action concerning conduct in Poland. (See here for the prior post).

In resolving the matter, Philips consented to entry of the Order prohibiting future FCPA violations.

Yesterday, the SEC announced that Philips agreed to pay “more than $62 million to resolve charges that it violated the FCPA” with respect to conduct related to its sales of medical diagnostic equipment in China.”

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The “Golden Share”

goldenshare

An interesting recent article in the Wall Street Journal discusses how various levels of the Chinese government are taking stakes in private companies.

According to the article: “the government stakes are sometimes very small [sometimes a 1% holding] but they tend to give the government board seats, voting power and sway over business decisions. Colloquially, they are known as golden shares.”

The article states:

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Bankman-Fried Charged With FCPA Offense

bankman-Fried

In December 2022, the Department of Justice announced criminal charges against Samuel Bankman-Fried arising from an “alleged wide-ranging scheme by [him] to misappropriate billions of dollars of customer funds deposited with FTX, the international cryptocurrency exchange [he] founded …, and mislead investors and lenders to FTX and to Alameda Research, the cryptocurrency hedge fund [he] also founded.”

Specifically, Bankman-Friend was charged with conspiracy to commit wire fraud, wire fraud, conspiracy to commit commodities fraud, conspiracy to commit securities fraud, conspiracy to commit money laundering, and conspiracy to defraud the Federal Election Commission and commit campaign finance violations.

Yesterday, the DOJ filed a superseding indictment adding a Foreign Corrupt Practices Act conspiracy charge to the criminal charges Bankman-Fried is facing.

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Bill Seeks To Codify DOJ’s Prior China Initiative

senatorscott

As highlighted in this prior post, in November 2018 the Department of Justice announced a China Initiative. Among the numerous goals of the China Initiative was to ‘identify Foreign Corrupt Practices Act (FCPA) cases involving Chinese companies that compete with American businesses.”

In February 2022, the DOJ scrapped the China Initiative. According to this article, “the decision to end the program comes after a months-long review ordered by the new head of the National Security Division, Assistant Attorney General Matthew Olsen. “While I remain focused on the evolving, significant threat that the government of China poses, I have concluded that this initiative is not the right approach.”

Recently, Senator Rick Scott (R-FL) “announced a package of five national security focused bills to hold Communist China accountable and better protect American families. This legislative package contains bills which prohibit the U.S. Government from buying drones made by America’s adversaries, protect Taiwan from Communist China’s growing aggression, sever all financial transactions between the U.S. and Communist China once it engages in armed aggression against Taiwan, reestablish the China Initiative at Department of Justice, and require a list to be published listing all countries who have a bilateral security arrangement with Communist China to protect Americans abroad and prevent CCP police stations in the US.” (See here).

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That Stinks: Safran S.A. Quietly Resolves $17.2 Million Enforcement Action Involving “Train Lavatory Contracts”

Trainlavatory

Some Foreign Corrupt Practices Act enforcement actions are accompanied by DOJ press releases and much fanfare and some are not.

In the later category, earlier this week this letter was quietly posted to the DOJ’s FCPA website indicating that Safran S.A. (a French company) resolved a $17.2 “declination with disgorgement” enforcement action.

According to the DOJ letter, bribery was “committed by employees and agents of the Company’s U.S. subsidiary Monogram Systems (Monogram) and its German subsidiary EVAC GmbH (EVAC).”

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