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Goldman’s $79.5 Million Ripple

Ripple

Foreign Corrupt Practices Act settlement amounts are one obvious consequence of FCPA non-compliance and tend to generate the most headlines.

However, as has been discussed on these pages for years  including in this article “FCPA Ripples”, settlement amounts are only one consequence of the overall financial ramifications of FCPA scrutiny and enforcement.

As highlighted in this prior post, in October 2020 Goldman Sachs resolved a net $1.66 billion DOJ/SEC FCPA enforcement action in connection with its participation in 1MDB (Malaysia’s state-owned and state-controlled investment development company).

As often happens in connection with FCPA scrutiny or enforcement, lawyers representing shareholders filed civil actions including derivative actions alleging that Goldman officers and directors breached fiduciary duties in connection with the underlying conduct.

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Ericsson “Ripple Effects”

Ripple

Prior posts hereherehere, and here covered the 2019 Foreign Corrupt Practices Act enforcement action against Ericsson resolved through a deferred prosecution agreement; how the DOJ in 2021 accused Ericsson of breaching its DPA obligations; recent reports suggesting that “Ericsson may have made payments to the ISIS terror organization to gain access to certain transport routes in Iraq;” and the recent release by the International Consortium of Investigative Journalists of the “Ericsson List.”

As highlighted here, most recently Ericsson disclosed: “On March 1, 2022, the DOJ informed Ericsson that the disclosure made by the company prior to the DPA about its internal investigation into conduct in Iraq in the period 2011 until 2019 was insufficient. Furthermore, it determined that the company breached the DPA by failing to make subsequent disclosure related to the investigation post-DPA.”

This post highlights certain ripple effects from the recent activity.

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New Chinese Anti-Bribery Guideline Calls For Blacklisting And Expulsion Of Foreign Companies That Pay Bribes In China

chinaflag

Today’s post is from Dechert attorneys Andrew Boutros, Shriram Harid, David Kelley, Jay Schleppenbach, and Maria Sit.

China’s top anti-corruption watchdogs recently released a new anti-bribery Guideline designed to focus on multi-national corporations and individuals that pay bribes in China, as opposed to bribe recipients, the Chinese Communist Party’s traditional focus. With the threat of being barred from doing business in China, the Guideline raises significant concerns for entities doing business there.

In particular, business organizations should be aware that resolving bribery allegations that involve China elsewhere in the world (say, in the United States) could potentially result in a “carbon copy prosecution” in China with the full range of potentially devastating penalties. Similarly, multi-national corporations that face bribery charges (or even just an investigation) in China could later find themselves prosecuted in the United States or elsewhere in the world based on the same facts.

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Cognizant’s $95 Million Ripple

Ripple

Foreign Corrupt Practices Act settlement amounts are one obvious consequence of alleged FCPA non-compliance and tend to generate the most headlines.

However, as has been discussed on these pages for years  including in this article “FCPA Ripples”, settlement amounts are only one consequence of the overall financial ramifications of FCPA scrutiny and enforcement.

As highlighted in this prior post, in early 2019 Cognizant Technology Solutions, without admitting or denying the SEC’s findings, resolved a $25 million SEC enforcement action in connection with various licenses and permits in India. To get to that point, the company spent approximately $75 million in pre-enforcement action professional fees and expenses. (See here).

Like many instances of FCPA scrutiny and enforcement, Cognizant was also hit with a variety of civil lawsuits by shareholders. (See here).

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Senators Renew Request That CFIUS Review U.S. Transactions Of FCPA Violator

JBS

As highlighted in this prior post, in October 2020 J&F Investimentos S.A. (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 JBS as well as J&F owners Joesley Batista and Wesley Batista resolved a net $155 million Foreign Corrupt Practices Act enforcement action for allegedly bribing Brazilian officials.

Recently, in this letter to Secretary of Treasury Janet Yellen, U.S. Senators Marco Rubio (R-FL) and Bob Menendez (D-NJ) renewed their request that the Committee on Foreign Investment in the United States (CFIUS) conduct a formal review of the transactions of Brazilian meatpacking conglomerate JBS S.A., its holding company J&F Investimentos, and any entity owned or controlled by Wesley and Joesley Batista.

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