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Cognizant’s $95 Million Ripple

Ripple

Foreign Corrupt Practices Act settlement amounts are one obvious consequence of alleged FCPA non-compliance and tend to generate the most headlines.

However, as has been discussed on these pages for years  including in this article “FCPA Ripples”, settlement amounts are only one consequence of the overall financial ramifications of FCPA scrutiny and enforcement.

As highlighted in this prior post, in early 2019 Cognizant Technology Solutions, without admitting or denying the SEC’s findings, resolved a $25 million SEC enforcement action in connection with various licenses and permits in India. To get to that point, the company spent approximately $75 million in pre-enforcement action professional fees and expenses. (See here).

Like many instances of FCPA scrutiny and enforcement, Cognizant was also hit with a variety of civil lawsuits by shareholders. (See here).

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Judge Recommends Dismissal Of 500.com Bribery Related Securities Fraud Suit

Judicial Decision

500.com is an online gaming company incorporated in the Cayman Islands with principal executives offices in China and shares traded on the New York Stock Exchange.

In a securities fraud class action lawsuit, investors claimed that the company and certain of its executives “made false statements, misrepresentations, and omissions in various SEC filings after paying bribes of millions of yen to government officials in Japan for the purpose of securing a lucrative license to operate a casino.” Specifically, the plaintiffs alleged that the company paid Tsukaka Akimoto, a member of Japan’s legislature who was in charge of awarding licenses to run integrated resorts, approximately 7.6 million yen which came in the form of compensation for speaking at a 500.com symposium, elaborate trips, and other gifts. Plaintiffs also alleged that 500.com paid bribes to five members of Japan’s parliament in exchange for preferential treatment related to the integrated resorts the licenses which totaled approximately 5 million yen.

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Appellate Court To Decide If The U.S. Is An Appropriate Forum For The Mexican Government To Sue Stryker For Damages In Connection With A 2013 FCPA Enforcement Action

stryker

This previous post highlighted how the Mexican government (specifically Instituto Mexicano del Seguro Social (IMSS) – the Mexican Social Security Institute) filed a civil action against Stryker Corporation in connection with its 2013 Foreign Corrupt Practices Act enforcement action concerning conduct in, among other countries, Mexico.

As to the Mexico conduct, the SEC found in the enforcement action:

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Ericsson’s $97 Million Ripple

Ripple

Foreign Corrupt Practices Act settlement amounts are one obvious consequence of FCPA non-compliance and tend to generate the most headlines.

However, as has been discussed on these pages for years  including in this article “FCPA Ripples”, settlement amounts are only one consequence of the overall financial ramifications of FCPA scrutiny and enforcement.

As highlighted in this prior post, in late 2019 Swedish telecom company Ericsson (a company with American Depositary Shares traded in the U.S.) resolved a $1.06 billion net FCPA enforcement action concerning conduct in Djibouti, China, Vietnam, Kuwait, Indonesia, and Saudi Arabia.

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Yet Another FCPA-Related Securities Fraud Lawsuit Dismissed

Dismissed

It is as predictable as the sun rising in the east and dogs barking.

In the aftermath of a Foreign Corrupt Practices Act enforcement action (or mere instances of FCPA scrutiny), plaintiffs’ lawyers representing shareholders on a contingent fee basis file securities fraud claims against the company and/or certain officers or directors. Such FCPA-related claims are frequently dismissed, but the claims nevertheless continue to be filed.

In the latest example, U.S. District Court Judge Andrew Carter (S.D.N.Y) recently granted VEON’s (formerly known as Vimpelcom) motion to dismiss  As highlighted in this prior post, in 2016 the telecommunications company resolved an FCPA enforcement action concerning conduct in Uzbekistan by agreeing to a net $397.5 million FCPA settlement.

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