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Friday Roundup

Roundup

A quite September, to FCPA Inc., Ng commentary, and discontinued.

It’s all here in the Friday roundup.

Quiet September

As highlighted in this prior post, September has historically been a very active month for FCPA enforcement as the SEC’s fiscal year ends on September 30th.

While the SEC did announce the WPP enforcement action on September 24th (see here and here for prior posts), for the second consecutive year, September FCPA enforcement was below historical norms.

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Judge Rules On The Intersection Of Corporate DPA Provisions And Individual Defendant Rights

Judicial Decision

This recent post summarized the decision by a judge to deny Roger Ng’s (a former Goldman Sachs executive) motion to dismiss including how the judge concluded that the FCPA’s internal controls provisions can be implicated even in transactions in which an issuer does not use its own assets to pay an alleged bribe.

In his motion to dismiss, Ng also pointed to certain aspects of the deferred prosecution agreement between the DOJ and Goldman (see here in for the prior post) as compromising his defense. However, in her decision, U.S. District Court Judge Margo Brodie (E.D.N.Y) also denied Ng’s motion on these grounds.

Given that the motion to dismiss stage is deferential to the prosecution, Judge Brodie’s decision on these issues was not a huge surprise.

Nevertheless, these aspects of Judge Brodie’s decision are worthy of exploring because various aspects of corporate DPAs (or NPAs) in the Foreign Corrupt Practices Act context are rarely litigated because: (1) the DOJ does not charge individuals in connection with approximately 75% of corporate actions; and (2) even in those instances in which the DOJ does charge an individual in connection with a corporate action, the individual frequently pleads guilty without mounting a defense.

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Ng’s Motion To Dismiss Denied – Judge States That Internal Controls Provisions Can Be Implicated Even In Transactions In Which An Issuer Does Not Use Its Own Assets To Pay An Alleged Bribe

JudgeBrodie

As highlighted in this prior post, in November 2018 the DOJ criminally charged former Goldman Sachs executives Tim Leissner and Ng Chong Hwa (Roger Ng) (along with Low Taek Jho – Jho Low) with Foreign Corrupt Practices Act offenses for paying bribes to various Malaysian and Abu Dhabi officials in connection with 1Malaysia Development Berhad (1MDB), Malaysia’s state-owned and state-controlled investment development company.

Leissner pleaded guilty and in October 2020 Goldman Sachs resolved a net $1.66 billion FCPA enforcement action based on the same conduct. (See additional posts here and here).

Previous posts here, here and here highlighted Ng’s motion to dismiss in which he argues that the DOJ’s case against him suffers from several factual errors and legal deficiencies. Ng also suggested that the DOJ scripted Leissner’s guilty plea and that Goldman’s DPA was entered into for reasons of risk aversion and otherwise compromises his ability to defend himself.

As to FCPA specific issues, Ng argued as follows:

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Was It Smart For The DOJ To Cite E-Smart?

question marks2

As highlighted in yesterday’s post, the DOJ recently filed a brief in response to Ng Chong Hwa (Roger Ng’s) motion to dismiss a criminal indictment against him in connection with his alleged involvement in bribery schemes involving various Malaysian and Abu Dhabi officials in connection with 1Malaysia Development Berhad (1MDB).

In the brief, the DOJ sets forth its views on the FCPA’s internal controls provisions (believed to be the first instance in the FCPA’s 40+ years in which the DOJ has set forth its internal controls views in a contested matter).

The FCPA space has long know about SEC v. Worldwide Coin (a rare instance in which a court was tasked with substantively construing the books and records and internal controls provisions – see here for the prior post). In addition to citing this case in its brief, the DOJ also cited SEC v. E-Smart Technologies, 82 F.Supp.3d 97 (D.D.C. 2015).

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DOJ Responds To Ng’s Motion To Dismiss – Lays Out Its View On Internal Controls

RogerNg

This recent post highlighted former Goldman Sachs executive Ng Chong Hwa (Roger Ng’s) motion to dismiss a criminal indictment against him in connection with his alleged involvement in bribery schemes involving various Malaysian and Abu Dhabi officials in connection with 1Malaysia Development Berhad (1MDB), Malaysia’s state-owned and state-controlled investment development company.

As highlighted in the prior post, Ng argues that the DOJ’s case against him suffers from several factual errors and legal deficiencies such as whether he was an agent of an “issuer” as well as the proper scope of the internal controls provisions.

Recently, the DOJ filed a response brief stating in pertinent part:

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