The First FCPA Enforcement Action Of 2017 Is A $13 Million Joke
On Friday, the SEC announced the first Foreign Corrupt Practices Act enforcement action of 2017 against Mondelēz International, Inc.
The basic findings in this short administrative action are the following: (i) in February 2010, Kraft Foods (which re-named itself Mondelez International in 2012) acquired Cadbury (a U.K.-based confectionary and snack beverage company that had securities registered with the SEC) and its subsidiaries, including Cadbury India; (ii) in early 2010 Cadbury India retained an agent to interact with Indian government officials to obtain licenses and approvals for a chocolate factory; (iii) Cadbury India failed to conduct appropriate due diligence on and monitor the activities of the agent which “created the risk” that funds paid to the agent (approximately $100,000) could be used for improper or unauthorized purposes and (iv) Cadbury’s India’s books and records did not accurately and fairly reflect the natures of the services rendered by the agent.
Without admitting or denying the SEC’s findings, Mondelez agreed to pay a $13 million civil penalty.
This enforcement action is a complete joke (as is the fact that the scrutiny began in February 2011).
Odebrecht / Braskem Bribery Schemes Net Approximate $420 Million FCPA Enforcement Action
Yesterday, the DOJ and SEC announced (here and here) a Foreign Corrupt Practices Act enforcement action against Odebrecht S.A. (a Brazilian holding company) and Braskem S.A. (a Brazil-based petrochemical company in which Odebrecht owns 50.1% of the voting shares, 38.1% of the total share capital and which Odebrecht “effectively controlled” according to the DOJ). Braskem has American Depositary Receipts registered with the SEC and traded on the NYSE and thus the enforcement action also included an SEC component.
Perhaps because of the less than clear DOJ release (clear once one actually reads the original source documents), this action is being reported in various places as a $3.5 billion FCPA enforcement action. While that figure represents the overall global settlement amount (Brazil and Swiss law enforcement also brought related actions), yesterday’s action was most certainly not a $3.5 billion FCPA enforcement action. Not even close.
Issues To Consider From The Nu Skin Enforcement Action
This previous post highlighted the SEC’s Foreign Corrupt Practices Act enforcement action against Nu Skin Enterprises.
This post continues the analysis by highlighting additional issues to consider from last week’s enforcement action.
Similar, Yet Different
Before the Nu Skin action, there have been several FCPA enforcement actions that have included, in whole or in part, charitable donations as highlighted in this recent post.
All of the prior enforcement actions though appear to have been involved pre-existing, presumably bona fide charitable organizations that a “foreign official” nevertheless was involved in or was valued by the “foreign official.”
Two For Tuesday In FCPA Enforcement Land – First Up Nortek
Just when you think you’ve seen all possible combinations of Foreign Corrupt Practices Act enforcement, along comes yesterday’s “two for Tuesday” in which the SEC announced in the same press release two non-prosecution agreements against two separate companies and the DOJ simultaneously released two so-called “declination” letters against the same two companies.
This post highlights the enforcement action against Nortek Inc. and a second post today highlights the enforcement action against Akamai Technologies. From there future posts will highlight issues to consider from the enforcement actions (and there are many including the question of just what charges – based on the SEC’s statement of facts – did the DOJ actually decline?”).
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).