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FCPA Related Securities Fraud Action Against Ericsson Dismissed


This prior post covered the 2019 Foreign Corrupt Practices Act enforcement action against Ericsson. The enforcement action concerned conduct in Djibouti, China, Vietnam, Kuwait, Indonesia, and Saudi Arabia and included a DOJ and SEC component. The DOJ matter involved a one count criminal information against Ericsson subsidiary Ericsson Egypt Ltd. charging conspiracy to violate the FCPA’s anti-bribery provisions resolved through a plea agreement and a criminal information against Ericsson charging conspiracies to violate the FCPA’s anti-bribery, books and records, and internal controls provisions resolved through a deferred prosecution agreement. The DOJ matter was resolved through payment of a $520 million criminal penalty.

As highlighted in this prior post, in 2021 the DOJ suggested that Ericsson was in breach of its DPA obligations and in March 2023 the DOJ announced that “Ericsson has agreed to plead guilty and pay a criminal penalty of more than $206 million after breaching a 2019 Deferred Prosecution Agreement (DPA).” (See here for the prior post).

In between, reports suggested that “Ericsson may have made payments to the ISIS terror organization to gain access to certain transport routes in Iraq.” (See here for the prior post).

As sure as the sun rises in the east and dogs bark, investors brought a securities fraud class action in related to the above events.

Recently, Judge William Kuntz (E.D.N.Y.) dismissed the complaint.

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It is always a bit humorous (among other things) when a former FCPA enforcement official changes his/her position on a topic when they leave the government and go into or back into private practice (as nearly all do).

While at the DOJ, Daniel Kahn (like other FCPA enforcement officials) was a big proponent of voluntary disclosure.

However, in this Law360 article, commenting on recent DOJ policy charges (see here for the prior post) Kahn stated that the discount for companies that self-disclose is a nice reward, but that there is still a question about whether it will incentivize companies to report if they were otherwise not inclined to disclose or cooperate.

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Judicial Bribery

As highlighted in this article:

“A Venezuelan Supreme Court justice and former president of that court [Maikel Jose Moreno Perez] has been indicted in Florida on charges he accepted bribes totaling around $10 million in exchange for leniency or case dismissals, spending the money on luxury homes and vacations abroad.”

According to the indictment, the bribes were intended to influence the justice to resolve cases in a manner favorable to Venezuelan contractors who owned companies that received funds from Venezuelan government-controlled entities. Certain of the bribe payments were used to purchase real estate in the U.S. and/or passed through U.S. bank accounts.

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Friday Roundup


Back to the Bolivian tear gas contract, more misinformation from the FCPA Blog, and surprising.

It’s all here in the Friday roundup.

Back to the Bolivian Tear Gas Contract

This May 2021 post highlighted a DOJ enforcement action against Bryan Berkman, Luis Berkman, Philip Lichtenfeld and Sergio Mendez for their roles in a Bolivian bribery scheme to secure a tear gas contract. Bryan Berkman, a U.S. citizen, was described as owning a Florida company (“Intermediary Company”) that sold tactical equipment including to the Bolivian Ministry of Defense. Sergio Mendez, a citizen of Bolivia, served as an official in the Bolivian Ministry of Government. Luis Berkman, also a U.S. citizen and Bryan’s father, was described as a “close associate” of Mendez as well as an “associate” of co-conspirator 1 (described as a high ranking official in the Bolivian Ministry of Government). Lichtenfeld, a U.S. citizen, is described as an associate of the Berkmans and Mendez.

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Seventh Circuit: “The United Nations Convention Against Corruption Is Not Binding Federal Law”

Judicial Decision

It has not been a good month for Instituto Mexicano del Seguro Social (IMSS – the Mexican Social Security Institute) in U.S. appellate courts.

This recent post discussed a Sixth Circuit decision affirming the dismissal of a civil lawsuit on forum non conveniens grounds filed by IMSS against Stryker in the aftermath of the company’s FCPA enforcement action which involved, among other conduct, alleged bribery of IMSS officials.

As highlighted in this prior post, in 2017 Biomet became an FCPA repeat offender as the DOJ and SEC brought a parallel FCPA enforcement action in which the company agreed to an overall settlement amount of $30.4 million. A portion of the enforcement action involved conduct in Mexico and in the words of the DOJ: “Biomet’s subsidiaries used a customs broker whose five subagents bribed Mexican customs officials to allow Biomet to export mislabeled products to Mexico.” In the words of the SEC: “Biomet subsidiary 3i Mexico engaged Mexican Customs Broker and certain subagents to pay bribes to Mexican customs officials for the purpose of circumventing Mexican customs laws regarding importing unregistered and improperly labeled products into Mexico.”

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