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Deutsche Bank Joins The Repeat Offender Club By Resolving Second FCPA Enforcement In Just 16 Months

deutsche

In August 2019, Deutsche Bank paid $16.2 million “to settle changes that it violated the FCPA by hiring relatives of foreign government officials [in both the Asia Pacific Region and Russia] in order to improperly influence them in connection with investment banking business).” (See here and here for prior posts).

Late Friday, Deutsche Bank (a German investment bank and financial services company with shares traded on the NYSE between 2009 and 2016) joined the ever expanding list of FCPA repeat offenders as the DOJ and SEC announced (here and here) an approximate $122.6 million Foreign Corrupt Practices Act enforcement action focused on the company’s relationship with third parties in Abu Dhabi, Saudi Arabia, Italy, and China.

The approximate 16 month gap between Deutsche Bank’s FCPA enforcement actions is the shortest among the large group of FCPA repeat offenders.

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Additional Issues To Consider From The Goldman Enforcement Action

Issues

This prior post highlighted the net $1.66 billion Foreign Corrupt Practices Act enforcement action against Goldman Sachs and a related entity.

This prior post posed the question, based on the government’s allegations, what should happen when compliance is decent (and often good), but not great? The prior post also highlighted how the Goldman enforcement action was much different than certain other top ten FCPA enforcement actions.

This prior post discussed various developments related to the Goldman FCPA enforcement action.

This post continues the analysis by highlighting additional issues to consider from the enforcement action.

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DOJ / SEC Announce Net $1.66 Billion (The Largest Of All-Time) FCPA Enforcement Action Against Goldman Sachs In Connection With 1MDB Fund

Goldman

As highlighted in this prior post, in November 2018 the DOJ announced criminal charges against former Goldman Sachs employees Roger Ng and Tim Leissner, and Low Taek Jho (Jho Low – an individual “known to be close to various high-ranking officials in Malaysia and Abu Dhabi” who “worked as an intermediary in related to 1MDB and other foreign government officials on numerous financial transactions and projects involving Goldman and others) 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.

This prior post asked: what does this mean for Goldman Sachs?

We now know the answer as the DOJ and SEC announced (here and here) a net $1.66 billion FCPA enforcement action against Goldman Sachs and a related entity. This represents the largest FCPA enforcement action of all-time (see here for the prior top ten list).

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Brazilian Company Bribes Brazilian Officials, U.S. Collects Net $155 Million In FCPA Enforcement Action

J&F

This recent post posed the question of whether “foreign” in the FCPA’s “foreign official” element means as it relates to the U.S. or as it relates to the specific company at issue. The post highlighted how in recent years the FCPA enforcement agencies have adopted the former interpretation in bringing FCPA enforcement actions against foreign companies for allegedly bribing their own “domestic” officials – but “foreign” as it relates to the U.S.

In yet another example, the DOJ and SEC announced yesterday (see here and here) that J&F Investimentos S.A. (J&F 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 resolved a net $155 million FCPA enforcement action for allegedly bribing Brazilian officials.

The enforcement action involved a: (i) DOJ component against J&F resolved through a plea agreement in which the company paid net $128.2 million; and (ii) an SEC component against J&F, a related entity, and two individuals in which the related entity paid approximately $26.8 million and the two individuals each paid a $550,000 civil penalty.

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World Acceptance Corp. Resolves $21.7 Million Enforcement Action Based On The Conduct Of A Former Wholly-Owned Mexico Subsidiary

world accept

As highlighted in this prior post, in June 2017 World Acceptance Corporation (a South Carolina based consumer finance company) disclosed that it was “conducting an internal investigation of its operations in Mexico, focusing on the legality under the U.S. Foreign Corrupt Practices Act and certain local laws of certain payments related to loans, the maintenance of the Company’s books and records associated with such payments, and the treatment of compensation matters for certain employees.”

As highlighted in this prior post, in May 2020 the company disclosed that “discussions with the SEC have progressed to a point that the Company can now reasonably estimate a probable loss and has recorded an aggregate accrual of $21.7 million with respect to the SEC matters.”

Yesterday, the SEC announced that World Acceptance Corp. agreed to resolve a $21.7 million FCPA enforcement action based on the actions of a former wholly-owned Mexican subsidiary it sold in July 2018.

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