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Glencore Pleads Guilty In The U.K.

glencore

In connection with the May Foreign Corrupt Practices Act enforcement action against Glencore, the U.K. Serious Fraud Office also announced that a Glencore entity was charged with seven counts of bribery in connection with its oil operations.

Yesterday, the SFO announced that:

“Glencore Energy (UK) Ltd has … been convicted on all charges of bribery brought against it by the Serious Fraud Office (SFO).  At Southwark Crown Court, the company admitted to multiple counts of paying bribes to secure access to oil and generate illicit profit. The SFO’s investigation exposed that Glencore, via its employees and agents, paid bribes of over $28 million for preferential access to oil, including increased cargoes, valuable grades of oil and preferable dates of delivery.  These actions were approved by the company across its oil operations in Nigeria, Cameroon, Ivory Coast, Equatorial Guinea and South Sudan. Glencore will be sentenced on 2nd  and 3rd November his year.”

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Issues To Consider From The Glencore Enforcement Action

Issues

This previous post highlighted the recent net $443 million Foreign Corrupt Practices Act enforcement action against Glencore.

This post highlighted the CFTC’s related enforcement action against the company.

This post discussed how the executive officer certification in the FCPA enforcement action sets up Glencore personnel to fail.

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

Timeline

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Dear Glencore Chief Executive Officer And Head Of Compliance: You Have Been Set Up To Fail

Dear

Foreign Corrupt Practices Act resolution documents have long contained: (i) legal standards that simply do not exist; (ii) internally inconsistent standards; and/or (iii) vague or ambiguous terms.

However, these issues now take on a greater importance given that the DOJ is apparently requiring (at least in some enforcement actions) – as a condition of settlement – executive officer certifications as to the company’s compliance program.

The recent Glencore FCPA enforcement action (see here for the prior post) contains a so-called Attachment H and as discussed in this post Glencore’s Chief Executive Officer and Head of Compliance (the contemplated signatories of the certification) have been set up to fail. Moreover, it is surprising that Glencore’s legal counsel (WilmerHale) allowed the company to agree to such a mess of a compliance certification.

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The CFTC’s Bribery Related Enforcement Action Against Glencore

CFTC

In 2019, the U.S. Commodity Futures Trading Commission (CFTC) issued an enforcement advisory concerning companies and individuals “that timely and voluntarily disclose to the Division violations of the Commodity Exchange Act involving foreign corrupt practices, where the voluntary disclosure is followed by full cooperation and appropriate remediation.” (See here).

Some claimed that the CFTC was going to begin investigating and prosecuting Foreign Corrupt Practices Act violations. This was false as the CFTC advisory clearly concerned violations of the Commodity Exchange Act.

Shortly thereafter, Glencore disclosed that the “CFTC is investigating whether Glencore and its subsidiaries may have violated certain provisions of the Commodity Exchange Act and/or CFTC Regulations through corrupt practices in connection with commodities.”

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Glencore Resolves An Approximately $443 Million Net FCPA Enforcement Action

glencore

In mid-2018 Glencore (a commodities company incorporated in the United Kingdom and headquartered in Switzerland disclosed that it was under scrutiny by the DOJ. (See here for the prior post).

Specifically, the company disclosed:

“Glencore Ltd, a subsidiary of Glencore plc, has received a subpoena dated 2 July, 2018 from the US Department of Justice to produce documents and other records with respect to compliance with the Foreign Corrupt Practices Act and United States money laundering statutes.  The requested documents relate to the Glencore Group’s business in Nigeria, the Democratic Republic of Congo and Venezuela from 2007 to present. Glencore is reviewing the subpoena and will provide further information in due course as appropriate.”

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