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Friday Roundup

Roundup

Listening in, SEC work continues, and for the reading stack. It’s all here in the Friday roundup.

Listening In

As highlighted in this recent post, Herbalife recently disclosed that it is poised to pay $123 million to resolve its long-standing FCPA scrutiny. In a recent investor conference call, John Agwunobi (CEO of the company) stated about the company’s disclosure: “we do believe that it [the disclosure] has freed us of any material, nonpublic information that would have affected our ability to repurchase shares.”

Goes to show that FCPA scrutiny and enforcement are often entwined with other legal issues.

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Scrutiny Alerts And Updates

scrutiny alert

This post highlights a new instance of Foreign Corrupt Practices Act scrutiny involving KT Corporation (a South Korean telephone company) and updates regarding long-standing FCPA scrutiny of Herbalife, World Acceptance Corp., Raytheon, and Stericyle.

KT Corporation

For several years, KT Corp (South Korea’s largest telecom company with shares traded on the New York Stock Exchange) has been under scrutiny by South Korean authorities for, among other things: donations to non-profit foundations at former President Park’s request; making certain donations or gifts to various lawmakers; and alleged improper hiring of college graduates.

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Friday Roundup

Roundup

Oops, scrutiny alert, and does Senator Rubio understand the FCPA? It’s all here in the Friday roundup.

Oops

It’s probably not a good idea for Department of Justice officials to boast about Foreign Corrupt Practices Act trial court verdicts when post-trial motions are pending.

Here is what Assistant Attorney General Benczkowski said about the Hoskins FCPA case on December 4, 2019.

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Issues To Consider From The Enforcement Action Against Former Herbalife China Executives

Issues

This prior post detailed the DOJ’s recent criminal indictment against Yanliang Li (a citizen of China and former Managing Director of a Chinese division of Herbalife) and Hongwei Yang (a citizen of China and former head of the External Affairs Department of a Chinese division of Herbalife). Yang was charged with one count of conspiracy to violate the FCPA and Li was charged with one count of conspiracy to violate the FCPA, one count of perjury and one count of destruction of records in a federal investigation. In addition, the SEC charged Li with violating the FCPA’s anti-bribery provisions and aiding and abetting books and records and internal controls violations.

This post highlights additional issues to consider from the enforcement action.

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Former Herbalife China Executives Criminally Charged By DOJ, SEC Also Charges Former Executive

herbalife

In 2014, Avon resolved a Foreign Corrupt Practices Act enforcement based in large part on obtaining a direct selling permit in China. (See here for the prior post).

In 2016, Nu Skin Enterprises resolved an FCPA enforcement action based in large part on obtaining a direct selling permit in China. (See here for the prior post).

In 2017, Herbalife disclosed that it was under FCPA scrutiny concerning its conduct in China. With the company’s scrutiny still pending, yesterday the DOJ announced that Yanliang Li (a citizen of China and former Managing Director of a Chinese division of Herbalife) and Hongwei Yang (a citizen of China and former head the External Affairs Department of a Chinese division of Herbalife) were criminally charged “for their roles in a scheme to violate the anti-bribery and the internal controls provisions of the FCPA.” Not surprisingly, the alleged conduct focused on obtaining a direct selling permit.

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