SQM’s $62.5 Million 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 tend to be a relatively modest consequence of the overall financial ramifications of FCPA scrutiny and enforcement.
Pre-enforcement action professional fees and expenses are often 3-5 times (and sometimes higher) the actual FCPA settlement amount and post-enforcement action professional fees and expenses quickly add up as well.
In addition, many instances of FCPA scrutiny result in shareholder litigation – whether a derivative action against officers and directors for alleged breaches of fiduciary duty and/or a securities fraud action.
Issues To Consider From The World Acceptance Corp. Enforcement Action
This prior post went in-depth into the SEC’s recent $21.7 million Foreign Corrupt Practices Act enforcement action against World Acceptance Corp. (WAC) and this post highlights additional issues to consider.
Timeline
As highlighted in this post, WAC disclosed its FCPA scrutiny in mid-2017. Thus, from start to finish, its scrutiny lasted more than three years. I’ve said it many times, and will continue saying it until the cows come home, if the SEC wants its FCPA enforcement program to be viewed as credible and effective it must resolve instances of FCPA scrutiny much quicker.
From The Dockets
This post summarizes a strange state law claim filed by a former Walmart attorney and recent decision by a federal court judge concluding that resolving a Foreign Corrupt Practices Act enforcement action through a deferred prosecution agreement does not constitute a conviction.
Walmart Matter
Recently Shane Perry (a former Walmart attorney who worked on Walmart’s internal FCPA investigation in Mexico in 2011 and later became the Ethics Officer for Walmart de Mexico) filed this lawsuit in Arkansas state court claiming that on July 6, 2017 “he was terminated in a ruthless fashion based on information carelessly gathered and processed at the orders of senior management for punishment and retaliation.”
Friday Roundup
Monitor costs, scrutiny alert, quotable, and survey says. It’s all here in the Friday roundup.
Monitor Costs
As highlighted in prior posts here and here, in late 2019 Ericsson resolved a Foreign Corrupt Practices Act enforcement action and the $1.06 billion settlement amount was the largest net FCPA settlement amount in history. As a condition of settlement, Ericsson was required to engage an independent compliance monitor for a three-year period.
Recently, Ericsson disclosed “a provision of SEK 0.6 billion [approximately $60 million] was made to cover future monitoring costs.” (See here for the article “FCPA Ripples.”)
Friday Roundup
Scrutiny alert, investor wants answers, sentenced, to Bribery Act Inc., compliance, and for the reading stack.
It’s all here in the Friday roundup.
Scrutiny Alert
Raytheon recently disclosed: