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Citgo Turns Plaintiff And Sues FCPA Violator For Bribing Its Employees


As highlighted in this prior post, in May 2019 Jose Manuel Gonzalez Testino pleaded guilty to, among other charges, one count of conspiracy to violate the Foreign Corrupt Practices Act and one count of violating the FCPA for providing things of value to Citgo Petroleum Corp. (a subsidiary of Petroleos de Venezuela S.A. – the Venezuelan state-owned oil company).

Recently, Citgo turned plaintiff and sued Testino and his associated company Petroleum Logistics Service Corp. (PLS) for bribing its employees.

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Friday Roundup


Listening in, SEC work continues, and for the reading stack. It’s all here in the Friday roundup.

Listening In

As highlighted in this recent post, Herbalife recently disclosed that it is poised to pay $123 million to resolve its long-standing FCPA scrutiny. In a recent investor conference call, John Agwunobi (CEO of the company) stated about the company’s disclosure: “we do believe that it [the disclosure] has freed us of any material, nonpublic information that would have affected our ability to repurchase shares.”

Goes to show that FCPA scrutiny and enforcement are often entwined with other legal issues.

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An FCPA Related Feeding Frenzy

Feeding Frenzy

When making a decision whether to voluntarily disclose Foreign Corrupt Practices Act issues, corporate leaders need to understand the full range of ripple effects that will likely occur upon disclosure. (See here for the article “FCPA Ripples”).

One should not just look at the supposed reduction in an FCPA settlement amount and narrowly conclude that the company benefited from the voluntary disclosure. Such a narrow view fails to take into account the many other ripple effects resulting from the disclosure.

These pages have long highlighted that one ripple effect of FCPA scrutiny and enforcement is FCPA-related shareholder litigation and this post discusses what happened to Landec Corporation after it disclosed an FCPA investigation on January 2, 2020.

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The High Court Of Singapore Catches On To The Facade Of FCPA Enforcement


As highlighted in prior posts here and here, in April 2016 Las Vegas Sands (LVS) paid $9 million to resolve an SEC Foreign Corrupt Practices Act enforcement action finding violations of the books and records and internal controls provisions concerning various conduct in China.

As highlighted here, in January 2017 the DOJ brought a related action in which LVS paid $7 million pursuant to a non-prosecution agreement. As highlighted in the prior post, it was an usual development because FCPA enforcement actions against issuers involving a DOJ and SEC component are nearly always resolved on the same day. Adding to the intrigue, the enforcement action was brought during the final hours of the Obama administration while LVS CEO Sheldon Adelson (a major Republican contributor) was in Washington D.C. for President Trump’s inauguration.

Recently, the High Court of Singapore (pictured) issued this decision in the context of an arbitration dispute. As highlighted below, the High Court of Singapore dives deep into the LVS enforcement action and concludes, from an evidentiary standpoint, that the FCPA findings have a low degree of reliability and were agreed to by LVS against the backdrop of incentives that diminishes their overall weight. In other words, the High Court of Singapore caught on to the “facade of FCPA enforcement” (see here for the article).

The Singapore decision is also interesting because it involved, as dueling experts, Peter Clark (former DOJ FCPA Unit) and Philip Urofosky (former Assistant Chief of the DOJ Fraud section who worked extensively on FCPA matters).

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Friday Roundup


Sentenced, scrutiny alert, and payment dispute. It’s all here in the Friday roundup.


Previous posts here and here highlighted the FCPA and related enforcement action against Frank Chatburn (a dual United States and Ecuadorian citizen) who was criminally charged (and ultimately plead guilty) for conspiring with others for making corrupt payments to PetroEcuador officials in order to obtain and retain contracts for Galileo (described as an Ecuadorian company that provided services in the oil and gas industry) from PetroEcuador.

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