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Laughing Out Loud At Certain Portions Of SEC Chair Gensler’s Speech

Laughable

Yesterday, SEC Chair Gary Gensler delivered this speech.

I literally laughed out loud as to certain portions of Gensler’s speech.

I didn’t laugh because what Gensler said was unreasonable. To the contrary, much of what he said represents sound policy. Rather, I laughed  because I have closely followed SEC enforcement practices (and speeches from enforcement agency officials) for over a decade.

Gensler began his speech as follows:

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Issues To Consider From The WPP Enforcement Action

Issues

This previous post highlighted the recent $19.2 million SEC Foreign Corrupt Practices Act enforcement action against London-based advertising agency WPP (a company with depositary shares traded on the New York Stock Exchange).

This post continues the analysis by highlighting additional issues to consider.

No Disclosure

Most issuers under FCPA scrutiny tend to disclose the scrutiny in SEC filings and thereafter disclose scrutiny developments in subsequent filings.

However, WPP appears to be a relatively rare example of an issuer not disclosing FCPA scrutiny.

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Amec Foster Wheeler / John Wood Group Enforcement Actions – What Actually Was Accomplished?

question marks2

Previous posts here, herehere and here highlighted various aspects of the recent U.S. and U.K. enforcement actions against Amec Foster Wheeler / John Wood Group.

The enforcement actions included: (i) a net $17.7 million FCPA enforcement action concerning conduct in Brazil; (ii) a net $142 million U.K. enforcement action concerning conduct in Brazil, Nigeria, Saudi Arabia, Malaysia, and India; and (iii) a net approximately $17 million Brazil enforcement action concerning conduct in Brazil.

That is a lot of money going into government coffers, but the question needs to be asked: what actually was accomplished through these enforcement actions?

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18 USC 3292

Laws

Not the most exciting title that is for sure, but 18 USC 3292 can play an important role in FCPA enforcement in terms of the statute of limitations.

The statutory provision states in full:

(a) (1) Upon application of the United States, filed before return of an indictment, indicating that evidence of an offense is in a foreign country, the district court before which a grand jury is impaneled to investigate the offense shall suspend the running of the statute of limitations for the offense if the court finds by a preponderance of the evidence that an official request has been made for such evidence and that it reasonably appears, or reasonably appeared at the time the request was made, that such evidence is, or was, in such foreign country.

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U.S. Court Denies Norway’s Extradition Request Of Former Yara International Executive

Judicial Decision

On March 17, 2021, the DOJ filed under seal a complaint pursuant 18 USC 3184 captioned “In the Matter of The Extradition of Kendrick Taylor Wallace.” In the complaint, filed in the U.S. District Court for the Middle District of Florida, the DOJ stated that Norway “has submitted a formal request through diplomatic channels for the extradition of Kendrick Taylor Wallace, a U.S. citizen.”

Wallace previously served as the Chief Legal Officer, and was also a member of the corporate management team, of Yara International ASA (Yara) (one of the world’s largest producers of mineral fertilizers) and the complaint references that Wallace was convicted of criminal offenses in Norway for bribery schemes involving “a Libyan government official and an Indian government official in connection with negotiations to establish joint venture agreements concerning fertilizer production with state-controlled companies in Libya and India.”

Recently, the court denied the extradition request and dismissed the DOJ’s complaint. (See 2021 WL 2401906).

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