Stryker Joins The FCPA Repeat Offender Club
The end of September is traditionally an active period for Foreign Corrupt Practices Act enforcement as the SEC’s fiscal year comes to a close.
On the heels of yesterday’s Petrobras enforcement action (see here and here for prior posts), the SEC announced a $7.8 million enforcement action against medical device company Stryker for not having internal accounting controls “sufficient to detect the risk of improper payments in sales of Stryker products in India, China, and Kuwait” and because “Stryker’s India subsidiary failed to maintain complete and accurate books and records.”
In doing so, Stryker joins the list of FCPA repeat offenders (see here). As highlighted in this prior post, in 2013 Stryker resolved a $13.2 million enforcement action based on alleged conduct in Mexico, Poland, Romania, Argentina, and Greece.
Friday Roundup
Scrutiny alert, some responsibility, repeat offender, proposed changes to whistleblower rules, and for the reading stack. It’s all here in the Friday roundup.
Scrutiny Alert
Glencore plc, an Anglo–Swiss mining company with headquarters in Switzerland and ADRs traded on a U.S. exchange recently announced:
Maxwell Technologies Becomes A Repeat Offender Of The FCPA’s Books And Records And Internal Controls Provisions
As highlighted in this previous post, in 2011 Maxwell Technologies (a California-based manufacturer of energy storage and power delivery products) resolved parallel DOJ and SEC Foreign Corrupt Practices Act enforcement actions concerning alleged business conduct in China by agreeing to pay approximately $14 million.
As noted in the previous post, the SEC’s charges included disclosure violations not often seen in FCPA enforcement actions, based on allegations that Maxwell’s bribe payments allowed the company to offset losses and fund product expansions that are now a source of revenue for the company. Specifically the SEC alleged: ““Maxwell greatly depended on the revenue from Maxwell SA’s high-voltage capacitor sales to China in order to help fund Maxwell’s expansion into new product lines that are now expected to become Maxwell’s future source of revenue. Maxwell engaged in the bribery scheme because it enabled the company to obtain material revenue needed to financially position itself to help fund the very products that today are sustaining Maxwell’s future growth.”
Fresh Off Its 2016 FCPA Enforcement Action, SAP Is Again Under FCPA Scrutiny
As highlighted in this previous post, in February 2016 SAP (a German company with American Depository Shares registered with the SEC) resolved an FCPA enforcement action based on conduct in Panama. Without admitting or denying the SEC’s finding’s in an administrative order the company agreed to pay approximately $3.9 million and the SEC ordered the company to cease and desist from committing or causing any violations and any future violations of the FCPA’s books and records and internal controls case.
Fresh off this 2016 FCPA enforcement action, SAP is again under FCPA scrutiny.
Corporate FCPA Repeat Offenders
As highlighted in this post, twelve companies have resolved FCPA enforcement actions – not once – but twice. Thus far in 2017 there have been three FCPA repeat offenders.
Note: this post uses the term repeat offender to mean a business organization that has resolved more than one FCPA enforcement action regardless of which agency (the DOJ or SEC) brought the enforcement action; regardless of the form of the enforcement action (plea agreement, NPA, administrative order, etc.) and regardless of the charges or findings (anti-bribery provisions vs. books and records and internal controls provisions).