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The U.K. Deferred Prosecution Agreement Regime: Aligning Rhetoric And Reality

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A guest post from David Corker (a Partner at Corker Binning Corker in London).

The cornerstone of the Deferred Prosecution Agreement (‘DPA’) regime in our jurisdiction is the centrality of the court. At the start of both his preliminary and final judgments delivered in the first DPA in 2015, Leveson P intended that his affirmation of this principle would become, as indeed it has, axiomatic. Almost every subsequent judgment endorsing a DPA has recited his words about the indispensable judicial role. Opening her 32-page judgment concerning the Airbus DPA in 2020[1], for example, Sharp P (Sir Brian’s successor as head of the Queen’s Bench Division) reproduced (paras 7 and 8) the relevant passages in full.

For this article this extract provides sufficient colour:

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Is The SEC Finished With NPAs And DPAs?

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In early 2010, the SEC (see here) announced a series of measures “to further strengthen its enforcement program by encouraging greater cooperation from individuals and companies in the agency’s investigations and enforcement actions.”

The SEC’s then Director of Enforcement called the measures “a potential game-changer for the Division of Enforcement.”

Among the measures the SEC adopted was use of deferred prosecution agreements and non-prosecution agreements – resolution vehicles the SEC described as “tools [that] have been regularly and successfully used by the Justice Department in its criminal investigations and prosecutions” (which of course was and still remains a debatable point).

However, since this “game-changing” moment at the SEC over a decade ago, the agency has only used a DPA twice to resolve an issuer FCPA enforcement action and an NPA three times. Moreover, the SEC’s last use of an NPA or DPA to resolve an issuer FCPA enforcement was in mid-2016. All of which begs the question: is the SEC finished using NPAs and DPAs to resolve issuer FCPA enforcement actions?

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Ng Files Motion To Dismiss

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As highlighted in this prior post, in November 2018 the DOJ criminally charged former Goldman Sachs executives Tim Leissner and Ng Chong Hwa (Roger Ng) (along with Low Taek Jho – Jho Low) with Foreign Corrupt Practices Act offenses for paying bribes to various Malaysian and Abu Dhabi officials in connection with 1Malaysia Development Berhad (1MDB), Malaysia’s state-owned and state-controlled investment development company.

Leissner pleaded guilty and in October Goldman Sachs resolved a net $1.66 billion FCPA enforcement action based on the same conduct. (See additional posts here and here).

Ng is mounting a defense and recently filed this motion to dismiss (an entire section of which is redacted). As highlighted below, Ng argues that the DOJ’s case against him suffers from several factual errors and legal deficiencies. Ng also suggests that the DOJ scripted Leissner’s guilty plea and that Goldman’s DPA was entered into for reasons of risk aversion and otherwise compromises his ability to defend himself.

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Observations From The OECD’s Phase 4 U.S. Review Report

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Recently, the OECD released its Phase 4 review of the United State’s implementation of the OECD Anti-Bribery Convention … in effect a review of the FCPA, its enforcement, and related issues.

The first question one needs to ask themselves is whether they care what “experts from Argentina and the United Kingdom” (as stated by the OECD “the report and its recommendations reflect the findings of experts from Argentina and the United Kingdom”) think about the U.S. Foreign Corrupt Practices Act, U.S. law enforcement (DOJ and SEC) policies and practices, and U.S. jurisprudence.

In any event, the Phase 4 Report “explores issues such as detection, enforcement, corporate liability, and international cooperation, as well as covering unresolved issues from prior reports.” (See here for a 2010 post summarizing the OECD’s Phase 3 review).

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The UK Serious Fraud Office 2020 Deferred Prosecution Agreement Guidance: Something Old and Something New

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A guest post from Gibson Dunn attorneys Sacha Harber-Kelly and Steve Melrose.

Mr. Harber-Kelly is a former prosecutor at the SFO and was appointed to lead the SFO’s engagement in the cross-governmental working group which devised the DPA legislative framework, and subsequently appointed to draft the DPA Code of Practice, which sets out how prosecutors will operate the DPA regime.

On October 23, 2020, the UK Serious Fraud Office published a new chapter from its internal Operational Handbook, which it describes as “comprehensive guidance on how we approach Deferred Prosecution Agreements (DPAs), and how we engage with companies where a DPA is a prospective outcome.”

At the time of its publication, the Director of the SFO, Lisa Osofsky, remarked, “Publishing this guidance will provide further transparency on what we expect from companies looking to co-operate with us.” Director Osofsky’s full remarks are here.

The 2020 DPA Guidance (“the Guidance”) is here.

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