FCPA And Then Some As Alere Resolves SEC Enforcement Action
One instance of Foreign Corrupt Practices Act scrutiny that has attracted significant investor interest over the past few years (because it occurred in the context of an M&A transaction) involved Alere Inc.
As highlighted in this previous post, the company disclosed in August 2015 that it received an SEC subpoena inquiring about its foreign business practices. Thereafter, Alere announced that it would be acquired by Abbott in a $5.8 billion transaction.
Next Up – Telia As DOJ And SEC Announce Contemplated $483 Million Net FCPA Enforcement Action
This recent post asked: what will September bring and noted that with history as a guide likely notable FCPA enforcement actions.
This 2015 post highlighted the burgeoning Uzbekistan telecommunication investigations involving Dutch telecom company VimpleCom, Swedish telecom company TeliaSonera, and Russia-based Mobile TeleSystems.
As highlighted here, in February 2016 VimpelCom resolved a net $397.5 million FCPA enforcement action and as highlighted below yesterday the DOJ and SEC announced a contemplated $483 million net FCPA enforcement against against Telia (after accounting for various credits and deductions for contemplated Swedish and Dutch enforcement actions) – the 5th largest net FCPA settlement of all-time.
You Don’t Need To Look Far For The Location Resulting In Several Individual FCPA Enforcement Actions
This prior post highlighted the DOJ’s recently announced Foreign Corrupt Practices Act enforcement action against Joseph Baptiste for alleged bribery in Haiti.
The Baptiste enforcement action is just the latest in a long list of FCPA enforcement actions (all of the criminal actions were against individuals associated with small, privately-held companies) alleging improper business conduct in Haiti (a country located a short distance from the U.S.).
What makes this unusual is that Haiti attracts (relatively speaking compared to many other countries) little business activity by those subject to the FCPA. But then again, perhaps one of the reasons for this lack of business activity is the FCPA itself. As highlighted in this 2010 post, some called for the FCPA not to apply to doing business in Haiti arguing: “one of the best way to help Haiti” is to “pass a law stating that the FCPA does not apply to dealings in Haiti. As it stands right now, U.S. businesses are unwilling to take on this legal risk and the result is similar to an embargo. You can’t do business in Haiti without paying bribes.”
The Chiquita Enforcement Action – A Bunch Of Bananas With A Slippery Origin
[This post is part of a periodic series regarding “old” FCPA enforcement actions]
If you think strict liability enforcement of the FCPA books and records and internal controls provisions is a recent invention, think again.
If you think off-the-rails FCPA enforcement (that is enforcement theories seemingly in conflict with actual legal authority) is a recent invention, think again.
A dubious FCPA enforcement action occurred in 2001 when the SEC announced this administrative cease and desist order finding that Chiquita Brands International Inc. violated the books and records and internal controls provisions of the Foreign Corrupt Practices Act.
Halliburton Joins FCPA Repeat Offender Club As The SEC Also Finds That A Former VP Violated The FCPA
In 2009, Halliburton Company, KBR Inc. (a wholly-owned subsidiary of Halliburton during the relevant time period) and Kellogg, Brown & Root, LLC (a wholly-owned subsidiary of KBR) resolved parallel DOJ and SEC Foreign Corrupt Practices Act enforcement actions in connection with a bribery scheme involving a $6 billion liquefied natural gas plant on Bonny Island, Nigeria. (See here and here).
The combined $579 million settlement amount (DOJ – $402 million / SEC $177 million) remains the third largest FCPA settlement of all-time. The SEC’s resolution contained the perfunctory condition of permanently enjoining Halliburton from violating the FCPA’s books and records and internal controls provisions.
However, yesterday Halliburton joined the ever-increasing (see here and here for recent posts) FCPA repeat offender club as the SEC announced an FCPA enforcement action concerning alleged conduct in Angola. Without admitting or denying the SEC’s findings in this administrative order that it violated the FCPA’s books and records and internal controls provisions, Halliburton agreed to pay $29.2 million. In the same order, the SEC also found that Jeannot Lorenz (Halliburton’s former vice president) causing the company’s violations, circumvented internal accounting controls, and falsified books and records. Without admitting or denying the SEC’s findings, Lorenz agreed to pay a $75,000 penalty.