The Gray Cloud Of FCPA Scrutiny Lasted Too Long In 2016
This recent post highlighted the origins of corporate Foreign Corrupt Practices Act enforcement actions in 2016.
Continuing with the FCPA statistical feast, this post follows the chronology of FCPA scrutiny to FCPA enforcement and highlights one of the most troubling policy issues when it comes to FCPA enforcement.
That is – FCPA scrutiny simply lasts too long. Specifically, as highlighted below, 4.25 years was the median length of time companies that resolved FCPA enforcement actions in 2016 were under scrutiny.
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.
Issues To Consider From The Teva Enforcement Action
This previous post went in-depth into the $519 million Foreign Corrupt Practices Act enforcement action against Teva Pharmaecutical (the first-ever FCPA enforcement action against an Israeli company, by far the largest-ever FCPA enforcement action against a pharmaceutical company, and 4th largest FCPA settlement of all-time).
Set forth below are additional issues to consider.
Timeline
As highlighted in this prior post, Teva’s FCPA scrutiny began in July 2012. Thus from start to finish the company’s FCPA scrutiny lasted approximately 4.5 years. If the DOJ and SEC want the public to view its FCPA enforcement program as legitimate, credible, and effective, it must resolve instances of FCPA scrutiny much faster.
Issues To Consider From The Odebrecht / Braskem Enforcement Action
As highlighted in this prior post, last week’s Foreign Corrupt Practices Act enforcement action against Odebrecht / Braskem was egregious and largely centered on a business unit, the Division of Structured Operations, housed within an Odebrecht subsidiary that allegedly served as little more than a bribe-paying department for the benefit of Odebrecht and Braskem in connection with projects and other issues in Brazil and eleven other countries.
Given the egregious and wide-spread improper conduct, the Odebrecht / Braskem global (Brazil, U.S. and Switzerland) settlement of approximately $3.5 billion set a record. After accounting for various credits and deductions (including for payments to Brazil and Swiss law enforcement agencies and a claimed inability to pay) the net FCPA settlement amount (subject to potential future adjustments) was approximately $420 million (the 5th largest FCPA settlement amount of all-time). [Note, in April 2017 the DOJ trimmed the Odebrecht criminal penalty by $167 million to $93 million (it originally was $260 million). Thus, the overall net FCPA settlement amount is $252 million].
Just because the conduct was egregious does not mean that there are not legal and policy issues to consider from the enforcement action. This prior post highlighted why the Odebrecht / Braskem enforcement action was unique (the bulk of the conduct focused on Brazil and it is believed to be the first FCPA enforcement action ever against a foreign issuer for bribing its own “domestic” officials) and this post continues the analysis by highlighting additional issues to consider.
Issues To Consider From The JP Morgan Enforcement Action
This previous post went in-depth into the recent Foreign Corrupt Practices Act enforcement action against JP Morgan based on its alleged improper hiring and internship practices that the U.S. government labeled bribery and corruption
This post continues the analysis by highlighting several additional issues to consider.
Other Internship / Hiring Enforcement Actions
While the JPMorgan hiring and internship enforcement action was the most high-profile based on the settlement amount, it certainly was not the first FCPA enforcement action based on alleged improper internship and hiring practices.