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
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:
Ericsson’s $97 Million 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.
Yet Another FCPA-Related Securities Fraud Lawsuit 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.
Yet Another FCPA-Related Securities Fraud Lawsuit 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 Ann Donnelly (E.D.N.Y.) recently granted a motion to dismiss filed by Mobile Telesystems PJSC (“MTS) and various individual defendants. As highlighted in prior posts here and here, in 2019 Russia-based MTS agreed to resolve an $850 million DOJ/SEC FCPA enforcement action concerning a telecom bribery scheme in Uzbekistan (the same scheme that previously resulted in FCPA enforcement actions against VimpelCom and Telia).
SQM’s $62.5 Million 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 tend to be a relatively modest consequence of the overall financial ramifications of FCPA scrutiny and enforcement.
Pre-enforcement action professional fees and expenses are often 3-5 times (and sometimes higher) the actual FCPA settlement amount and post-enforcement action professional fees and expenses quickly add up as well.
In addition, many instances of FCPA scrutiny result in shareholder litigation – whether a derivative action against officers and directors for alleged breaches of fiduciary duty and/or a securities fraud action.