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Interesting

The SEC’s most recent Foreign Corrupt Practices Act enforcement action was against Gol Airlines – a Brazil corporation (see here for the prior post).

Prior to that, was the SEC’s FCPA enforcement action against Tenaris – a Luxembourg corporation (see here and here for prior posts). Prior to that, was the SEC’s FCPA enforcement against KT Corp. – a South Korean corporation (see here and here for prior posts). Prior to that was the SEC’s FCPA enforcement action against Credit Suisse – a Swiss Corporation (see here). Prior to that against WPP – a United Kingdom Corporation (see here). Prior to that, against Amec Foster Wheeler – a U.K. corporation and successor in interest to a Swiss corporation (see here). Prior to that, against Deutsche Bank – a German corporation (see here and here).

The only SEC FCPA enforcement actions in the last approximate two years against U.S. companies have been against Stericycle (see here and here for prior posts) and Goldman Sachs (see here and here for prior posts).

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Brazilian Airline Bribes Brazilian Officials – U.S. Collects Net $38.1 Million In FCPA Enforcement Action

GOL

Yesterday, the DOJ and SEC (see here and here) announced a parallel Foreign Corrupt Practices Act enforcement action against Gol Linhas Aereas Inteligentes S.a. (GOL) – an airline headquartered in Sao Paulo, Brazil with shares traded on the New York Stock Exchange.

The DOJ component involved a criminal information against GOL charging conspiracy to violate the FCPA’s anti-bribery and books and records provisions resolved through a deferred prosecution agreement in which the company agreed to pay net $15.3 million. The SEC component involved an administrative order against GOL finding violations of the FCPA’s anti-bribery, books and records, and internal controls provisions pursuant to which the company is expected to pay net $22.8 million.

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The Gap In SEC Individual FCPA Enforcement Actions Is Approaching Two Years

waiting

One reason to take FCPA enforcement agency rhetoric with a grain of salt is because it is warranted.

For instance, the FCPA enforcement agencies often talk about the importance of x and how they are committed to x, but in reality rarely do x.

Case in point is SEC individual FCPA enforcement actions.

For many years, SEC enforcement officials have talked about the importance of individual FCPA enforcement actions and set forth below are representative quotes from over the years.

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The Latest Reminder That The FCPA Has Always Been A Law Much Broader Than Its Name Suggests

reminder

The Foreign Corrupt Practices Act has always been a law much broader than its name suggests. Sure, the FCPA contains anti-bribery provisions which concern foreign bribery. Sure, the FCPA’s books and records and internal controls provisions can be implicated in foreign bribery schemes.

However, the fact remains that most FCPA enforcement actions (that is enforcement actions that charge or find violations of the FCPA’s books and records and internal controls provisions) have nothing to do with foreign bribery and these provisions are among the most generic legal provisions one can possibly find.

These so-called non-FCPA FCPA enforcement actions often present a perplexing issue. That is, the same legal violation is generally enforced by the SEC in different ways.

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SEC Obtains $550,092 Default Judgement Against Li

Judicial Decision

In November 2019, the DOJ announced that Yanliang Li (a citizen of China and former Managing Director of a Chinese division of Herbalife) and Hongwei Yang (a citizen of China and former head the External Affairs Department of a Chinese division of Herbalife) were criminally charged “for their roles in a scheme to violate the anti-bribery and the internal controls provisions of the FCPA.” Li was charged with one count of conspiring to violate the FCPA, one count of perjury and one count of destruction of records in a federal investigation. Yang was charged with conspiracy to violate the FCPA.

In addition, the SEC charged Li with violating the FCPA’s anti-bribery provisions and aiding and abetting books and records and internal controls violations.

Recently, Judge J. Paul Oetken (S.D.N.Y.) granted the SEC’s motion for a $550,092 default judgment against Li.

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