General Cable In Coverage Dispute With Insurers Regarding Prior FCPA Matter
In 2016, General Cable Corporation (a Kentucky based manufacturer and distributor of cable and wire) resolved a parallel DOJ and SEC enforcement action concerning conduct in Angola, Bangladesh, Indonesia, Thailand, China, and Egypt by agreeing to pay approximately $75 million. (See here for the prior post).
Recently, General Cable filed a civil lawsuit against Scottsdale Indemnity Company (Nationwide) alleging that the insurer has failed to provide coverage for settlement payments and defense costs associated with the Foreign Corrupt Practices Act and related matters.
The complaint alleges in pertinent part:
Yet Another FCPA-Related Securities Fraud Lawsuit Dismissed
It is as predictable as the sun rising in the east and dogs barking.
In the aftermath of a Foreign Corrupt Practices Act enforcement action (or mere instances of FCPA scrutiny), plaintiffs’ lawyers representing shareholders on a contingent fee basis file securities fraud claims against the company and/or certain officers or directors. Such FCPA-related claims are frequently dismissed, but the claims nevertheless continue to be filed.
In the latest example, U.S. District Court Judge William Bertelsman (E.D. KY) recently granted a motion to dismiss filed by General Cable (and various individual defendants) disposing of Section 10(b) and Rule 10-b5 claims. As highlighted in prior posts here and here, in late 2016 General Cable agreed to pay approximately $76 million to resolve an FCPA enforcement action concerning conduct in Angola, Bangladesh, Indonesia, Thailand, China, and Egypt.
Friday Roundup
Scrutiny alert, coincidence or FCPA-related, ripple dismissed, and more shallow commentary, and ISO 37001 laughable. It’s all here in the Friday roundup.
Scrutiny Alert
As highlighted in this previous post, in late 2013/early 2014 United Technologies Corp. (UTC) disclosed FCPA scrutiny concerning a non-employee sales representative retained in China. Recently, the company disclosed: “On March 7, 2018, the DOJ notified UTC that it had decided to close its investigation of this matter. Based on our ongoing discussions with the SEC staff to resolve this matter, UTC recorded a charge of approximately $11 million in the second quarter of 2018.”
Friday Roundup
Scrutiny alert, novice FCPA commentary matters, additional charges, survey says, across the pond, and for the reading stack. It’s all here in the Friday roundup.
Scrutiny Alert
Some companies disclose Foreign Corrupt Practices Act very early and then update the disclosure for years. Other companies have different disclosure practices. Global asset management firm Legg Mason Inc. (a company that has not previously disclosed FCPA scrutiny) recently disclosed:
Issues To Consider From The General Cable Enforcement Action
This prior post went in-depth into last week’s $75.8 million Foreign Corrupt Practices Act enforcement action against General Cable Corporation and this post continues the analysis by highlighting additional issues to consider.
Timeline
The SEC’s resolution document states that General Cable “promptly self-reported the potential FCPA violations to the Commission’s staff in January 2014.” As highlighted in this prior post, General Cable’s first mention of its FCPA scrutiny in SEC filings appears to be September 2014.
From start to finish, General Cable’s FCPA scrutiny lasted approximately three years. While three years is obviously shorter than the 4-6 years seen in certain FCPA inquiries, three years is still too long of time for FCPA scrutiny to last for a company that voluntarily disclosed and cooperated.