A Focus On SEC Individual Actions
This previous post highlighted various facts and figures from 2018 SEC FCPA enforcement actions against issuers.
As highlighted in the prior post, of the 14 corporate SEC FCPA enforcement actions in 2018, 1 (7%) has involved, at present, related SEC FCPA charges or findings against company employees.
In 2018, the SEC charged or found that three individuals violated the FCPA: Joo Hyun Bahn (associated with Colliers International Group); Patricio Contesse Gonazlez (associated with SQM which resolved an FCPA enforcement action in 2017); and Paul Margis (associated with Panasonic Avionics). (Note: the SEC’s enforcement action against Takeshi Uonaga (Panasonic Avionics former CFO) is not included in FCPA enforcement statistics for the simple reason that this was a revenue recognition matter and thus a non-FCPA FCPA enforcement action).
Former Credit Suisse Bankers Charged With FCPA And Other Offenses In Connection With Various Mozambican Maritime Projects
Yesterday this criminal indictment was unsealed charging former Credit Suisse bankers Andrew Pearse, Surjan Singh, and Detelina Subeva with conspiracy to violate the FCPA’s anti-bribery and internal controls provisions in connection with financing various Mozambican maritime projects.
In many respects, the action is similar to the November 2018 enforcement action against various individuals associated with Goldman Sachs in connection with Malaysia’s 1MDB fund (see here for the prior post).
DOJ Adds Additional Defendant To Haiti Port Project Case
As highlighted here, in August 2017 (in connection with an undercover sting) the DOJ announced criminal charges against Joseph Baptiste (a retired U.S. Army Colonel, practicing dentist, and former founder/president of a Maryland-based Haitian focused non-profit) “for his alleged role in a foreign bribery and money laundering scheme in connection with a planned $84 million port development project in Haiti” in an area known as Mole Saint Nicolas.
With Baptiste’s trial set to begin in early December, the DOJ returned to the same alleged core conduct by announcing additional criminal charges against Roger Boncy (pictured – 74, a dual U.S. and Haitian citizen who resides in Madrid, Spain).
Stephanie Avakian (Co-Director Of The SEC’s Enforcement Division) Ponders The Meaning Of Success
In this, the Foreign Corrupt Practices Act’s 40th year, it is prudent to take a step back and ponder the question of whether the FCPA has been successful in achieving its objectives. This of course begs the question: what is the definition of success? (See here a 25 minute video which explores this issue, see also posts here, here, and here).
Recently, Stephanie Avakian (Co-Director of the SEC’s Enforcement Division) delivered this speech. While the speech does not specifically mention the FCPA, Avakian nevertheless ponders the meaning of success when it comes to SEC enforcement (and after all, the SEC does have a specialized FCPA Unit – one of only five such specialized units).
So Much For That Tone At The Top Thing As SEC Returns To Bring Enforcement Action Against SQM’s Former CEO
Foreign Corrupt Practices Act enforcement often seems more robust than it actually is because, in the relatively rare instances in which there is an individual prosecution in connection with a corporate action, the individual action often (but not always) occurs long before or long after the corporate action. Many FCPA Inc. participants, who have a vested interest in portraying more not less FCPA enforcement, count these occurrences as multiple enforcement actions when in reality they are the same core enforcement action. (This article highlights this dynamic as well as other dubious and haphazard FCPA Inc. counting methods).
Reflective of the above dynamic, as highlighted in prior posts here and here in January 2017 the DOJ and SEC announced a $30.5 million enforcement action against Sociedad Quimica y Minera de Chile S.A. (SQM), a chemical and mining company based in Chile, in relation to its interactions with Chilean officials. The bulk of the enforcement action involved use of the CEO’s “discretionary fund to direct payments to Chilean politicians, political candidates, and individuals connected to them “many of which violated Chilean tax law and/or campaign finance limits” and falsely recording such payments in SQM’s books and records.