Issues To Consider From The Kinross Gold Enforcement Action
This previous post went in-depth into the recent SEC Foreign Corrupt Practices Act enforcement action against Kinross Gold Corp.
Set forth below are additional issues to consider.
Just the Second
The 2016 enforcement action against Nordion was believed to be the first ever FCPA enforcement action against a Canadian company (see here and here for prior posts). The Kinross enforcement action is believed to be just the second.
Friday Roundup
A home run, quotable, monitors, up north, scrutiny alerts and updates, irksome, and for the reading stack. It’s all here in the Friday roundup.
Home Run
The latest issue of the always informative FCPA Update from Debevoise & Plimpton (released by the way on the opening day of the Major League Baseball season) hits a home run.
The lead article by Paul Berger (former Associate Director of the SEC’s Enforcement Division) concerns the recent Elbit Imaging enforcement action (see here for the prior post) and states in pertinent part:
Canada-Based Kinross Gold Corp. Resolves Approximate $1 Million SEC Action Because Its Acquired Indirect African Subsidiaries Had Deficient Internal Controls
Silly you for believing certain commentator hype that the Trump SEC would stop enforcing the Foreign Corrupt Practices Act or for thinking that the general lull in SEC corporate enforcement during the fourth quarter of 2017 meant anything.
In the second SEC corporate FCPA enforcement action in the last 2.5 weeks (see here for the prior Elbit Imaging action), the SEC announced yesterday that Canada-based Kinross Gold Corporation (a company with shares traded on the New York Stock Exchange) resolved an enforcement action “arising from the company’s repeated failure to implement adequate accounting controls of two African subsidiaries.” Without admitting or denying the SEC’s finding in this administrative order, Kinross agreed to, among other things, pay a $950,000 civil penalty.
Dubious As It Was, The Schering-Plough Enforcement Action Was Notable
[This post is part of a periodic series regarding “old” FCPA enforcement actions]
This recent post discussed how from a compliance take-away standpoint the large, egregious, no reasonable minds could differ there was bribery, enforcement actions are the least important and least instructive.
Rather, the most instructive and thus important enforcement actions tend to be those that take the Foreign Corrupt Practices Act in a new direction, involve unique interpretations of law (not subjected to any judicial scrutiny of course) and thus pose new compliance challenges for business organizations. The SEC’s 2004 enforcement action against Schering-Plough, based on a bona-fide charitable contribution, certainly fits this mold.
The Difficulty of Reconciling Existing Legal Authority And Even Enforcement Agency Guidance With Certain FCPA Books And Records And Internal Controls Enforcement Actions
This recent FCPA Flash podcast episode focused on the SEC’s “unlawful” enforcement, in certain instances, of the FCPA’s books and records and internal controls provisions.
Off-the-rails SEC FCPA enforcement is a topic frequently discussed on these pages (see here among numerous other posts) and sometimes it is important to take a step back and review actual legal authority, as well as even prior enforcement agency guidance, relevant to the books and records and internal controls provisions.
Upon reviewing the below information, ask yourself whether it is possible to reconcile this legal authority and other sources of information with enforcement theories advanced in certain FCPA enforcement actions.