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Yet Another FCPA-Related Securities Fraud Lawsuit Dismissed

By on May 6, 2019 in General Cable Corp., Related Civil Litigation
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.

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Friday Roundup

By on July 27, 2018 in Country Exits, ERISA, General Cable Corp., ISO 37001, Related Civil Litigation, United Technologies, World Acceptance Corp
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.”

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Friday Roundup

By on June 1, 2018 in Azat Martirossian, Basil Al Jarah, Dun & Bradstreet, FCPA Related Charges, FCPA Statistics, General Cable Corp., Latin America, Legg Mason, Leighton Holdings, Media Reporting, Media Reporting About the FCPA, Petros Contoguris, Rolls-Royce, Serious Fraud Office, Third Parties, United Kingdom, Vitaly Leshkov, Ziad Akle
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:

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Issues To Consider From The General Cable Enforcement Action

By on January 2, 2017 in Collateral Effects, General Cable Corp., Gray Cloud, Internal Controls
Issues

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.

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In-Depth – General Cable Resolves $75.8 Million FCPA Enforcement Action, Former Senior VP Also Resolves SEC Action

By on December 29, 2016 in 2016 Enforcement Actions, Angola, Anything of Value, Bangladesh, China, Distributor Issues, DOJ Enforcement Action, Egypt, General Cable Corp., Individual Enforcement Action, Indonesia, Karl Zimmer, Non-Prosecution Agreement, SEC Enforcement Action, Thailand, Third Parties, Voluntary Disclosure
generalcable

Don’t yet close the books on 2016 Foreign Corrupt Practices Act enforcement.

Yesterday, the DOJ and SEC announced (here and here) an FCPA (and related) enforcement action against Kentucky-based General Cable Corporation (a manufacturer and distributor of cable and wire). The conduct at issue occurred in Angola, Bangladesh, Indonesia, Thailand, China, and Egypt.

The $75.8 million enforcement action involved a DOJ non-prosecution agreement in which the company agreed to pay an approximate $20.5 million penalty and an SEC administrative cease and desist order in which the company agreed to pay approximately $55.3 million in disgorgement and prejudgment interest.

In addition, the SEC also announced that Karl Zimmer, General Cable’s former Senior Vice President responsible for sales in Angola, agreed to pay a $20,000 civil penalty without admitting or denying the SEC’s findings that he knowingly circumvented internal accounting controls and caused FCPA violations when he approved certain improper payments.

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