Issues to Consider From The Nortek And Akamai Technologies Enforcement Actions
Previous posts here and here highlighted the SEC’s recent Foreign Corrupt Practices Act enforcement actions against Nortek and Akamai Technologies.
This previous post highlighted the DOJ’s so-called “declination” letters and posed the salient question – what viable criminal charges did the DOJ actually “decline”?
This post continues the analysis of the enforcement actions by highlighting additional issues to consider.
Friday Roundup
DOJ seeks legislative changes, a focus on FCPA Inc., credit ratings, across the pond, scrutiny update, and for the reading stack.
It’s all here in the Friday Roundup
DOJ Seeks Legislative Changes
The DOJ’s efforts to eradicate corruption and bribery is broader than just Foreign Corrupt Practices Act enforcement and includes: “public integrity prosecutions, bribery prosecutions, prosecutions of taxpayers who seek to conceal foreign accounts, money laundering prosecutions, [and its] Kleptocracy Initiative.”
Whistled For A Foul: Las Vegas Sands Agrees To Pay $9 Million To Resolve Books And Records And Internal Controls Action
The Foreign Corrupt Practices Act has always been a law much broader than its name suggests.
In addition to anti-bribery provisions, the FCPA also contains more generic books and records and internal controls provisions. While there are a few sentences in this 15 page administrative order released yesterday against Las Vegas Sands (LVS) that touch upon issues relevant to the anti-bribery provisions, the enforcement action was on balance a pure books and records and internal controls action.
Among other things, the SEC found that LVS lacked supporting documentation or appropriate authorization concerning the company’s involvement with a Chinese basketball team, the purchase of a building, a high-speed ferry service, and other aspects of its casino business in Macau.
The substance of yesterday’s enforcement action has been in the public domain for years. (See this 2012 New York Times article and this 2012 Wall Street Journal article). Indeed, FCPA Professor has been following LVS’s scrutiny since November 2010 upon the “noisy exist” of Steven Jacobs (the former President of Macau Operations) from the company. (See here for the original post).
In summary fashion, the order states:
SEC Announces Blockbuster FCPA Enforcement Actions Against ALL Issuers
[Today is April 1st, commonly referred to as April Fools Day. Please keep this in mind when reading this post. In other words, this post should not be taken literally. Even though this post is presented as satire, readers are encouraged to ponder the issues raised.]
Earlier today the SEC announced Foreign Corrupt Practices Act enforcement actions against all issuers subject to the FCPA.
Total SEC recovery in the enforcement actions – all resolved via administrative cease and desist orders and thus not subject to any judicial scrutiny was – approximately $925 billion dollars.
In announcing the enforcement actions, an SEC spokesperson stated:
“Using our data analytics tools, the SEC determined that it was more likely than not – given the SEC’s current FCPA enforcement theories – that all issuers subject to FCPA were in violation of the FCPA’s anti-bribery provisions, or at the very least the FCPA’s books and records and internal controls provisions.”
Pressed for more specifics on the enforcement actions, the SEC spokesperson stated:
Issues To Consider From The Nordion (Canada Inc.) Enforcement Action
This previous post went in-depth on the recent Foreign Corrupt Practices Act enforcement action against Nordion (Canada, Inc.).
This post continues the analysis by highlighting various issues to consider.
A future post will explore how the seemingly minor enforcement action (the settlement amount was a mere $375,000) should leave anyone who cares about FCPA enforcement speechless. An additional future post will pose the question of why did Nordion voluntarily disclose while also highlighting that its FCPA scrutiny cost the company in excess of $20 million in pre-enforcement action professional fees and expenses (a shocking 50:1 ratio compared to the settlement amount).