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200,000 Permits And Approvals Each Year To Do Business

By on November 12, 2019 in Beverage Industry, India
redtape

Why do Foreign Corrupt Practices Act enforcement actions happen?

Often times – as highlighted numerous times on these pages – the root cause of an FCPA enforcement action is a foreign law or regulation that results in a real point of contact between a real company’s employees or agents and a real “foreign official.”

Regulatory burdens (ranging from customs procedures, licensing and certification requirements, foreign government procurement policies, etc.) create bureaucracy, bureaucracy creates interactions with foreign officials, and the more interactions with foreign officials, the greater the FCPA risk will be. It really is not that complex of a formula.

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SEC Brings Another Enforcement Action Against A Former Cognizant Executive

By on September 16, 2019 in 2019 Enforcement Actions, Executive Enforcement Action, India, Individual Enforcement Action, Permits / Licenses / Customs / Tax, SEC Enforcement Action
Thiruvengadam

Approximately 90% of SEC corporate FCPA enforcement actions in recent years have lacked any related charges against company employees.

A bit unusual then that the February 2019 enforcement action against Cognizant Technology Solutions (see here) has resulted in not one, not two, but three individual enforcement actions as last Friday the SEC announced an administrative action against Sridhar Thiruvengadam (pictured – an Indian national and resident who previously served as Cognizant’s Chief Operating Officer).

Unlike the two prior individuals charged by the SEC and DOJ (Gordon Coburn and Steven Schwartz) who appear to be putting the government to its burden of proof, Thiruvengadam, without admitting or denying the SEC’s findings, agreed to pay a $50,000 civil penalty in an enforcement action that lacked any U.S. jurisdictional allegation other than that Thiruvengadam participated in a video conference from India with certain executives who participated in the video conference from the U.S.

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Approximately 7.5 Years After Disclosing FCPA Scrutiny, Walmart FINALLY Resolves FCPA Enforcement Action

By on June 21, 2019 in 2019 Enforcement Actions, Anything of Value, Brazil, Charitable Contributions, China, Compliance, DOJ Enforcement Action, Franchise Relationships, India, Internal Controls, Mexico, Permits / Licenses / Customs / Tax, Retail Industry, SEC Enforcement Action, Wal-Mart
Wal-Mart

As highlighted in this prior post, in late 2011 Walmart disclosed that it began “an internal investigation into whether certain matters, including permitting, licensing and inspections, were in compliance” with the FCPA.

So began arguably one of the most high-profile instances of corporate scrutiny in Foreign Corrupt Practices Act. history. The scrutiny FINALLY came to an end yesterday as the DOJ and SEC announced (here and here) a coordinated $282 million enforcement action. As highlighted in this prior post, Walmart disclosed this likely settlement amount in November 2017,  yet it still took approximately 1.5 additional years to formally resolve the matter.

This post summarizes the DOJ and SEC’s enforcement action concerning alleged improper conduct in the following countries: Mexico, Brazil, India and China.  Future posts will explore numerous other issues relevant to the enforcement action.

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Earth To Secretary Ross … There Have Been Numerous FCPA Enforcement Actions Concerning Conduct In India

By on May 14, 2019 in India
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This is the second installment in the “earth to Secretary Ross” series. (See here for the first).

Recently, U.S. Commerce Secretary Wilbur Ross delivered this speech in India at a trade conference and remarked: “we are excited that so many U.S. companies are dedicated to building commercial relationships with the countries and customers in this region of the world.”

During the speech, Ross stated: “our strict Foreign Corrupt Practices Act also assures the Indian government that our companies will not cause scandals here.”

Earth to Secretary Ross … there have been numerous corporate FCPA enforcement actions concerning conduct, in whole or in part, in India as highlighted below.

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Former Cognizant Technology Solutions Executives Criminally And Civilly Charged In Connection With Indian Planning Permit – Company Resolves $25 Million SEC Enforcement Action

By on February 15, 2019 in 2019 Enforcement Actions, Cognizant Technology Solutions, DOJ Enforcement Action, Executive Enforcement Action, Gordon Coburn, India, Individual Enforcement Action, Permits / Licenses / Customs / Tax, SEC Enforcement Action, Steven Schwartz
coburnschwartz

In this 2016 post highlighting Cognizant Technology Solutions’s disclosure of Foreign Corrupt Practices Act scrutiny it was also noted that Gordon Coburn resigned from his position as President of Cognizant Technology Solutions. This follow-up post noted that the two disclosures were likely related.

Sure enough as today the DOJ announced that Coburn and Steven Schwartz (Executive Vice President, Chief Legal and Corporate Affairs Officer) were criminally charged with FCPA violations. If the defendants choose to put the DOJ/SEC to its burden of proof, disputed issues will likely focus on corrupt intent, obtain or retain business and the facilitating payments exception.

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