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Potpourri

Potpourri

Agreement in Principle

As highlighted in prior posts here and here in 2016 hedge fund Och-Ziff resolved a $412 million Foreign Corrupt Practices Act enforcement action concerning improper business practices in various African countries.

As highlighted in this 2018 post, former shareholders of Canadian mining company Africo Resources Ltd. (“Claimants”) sough restitution pursuant to the Mandatory Victims Restitution Act for losses allegedly incurred as a result of Och-Ziff’s bribery of corrupt officials in the Democratic Republic of the Congo.

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An In-Depth Look At The U.K. Prosecution Of Airbus

airbus

These pages have long asserted that if a country is to have a deferred prosecution regime that the regime in the United Kingdom (which requires meaningful judicial review and approval) is far more preferable than the U.S. regime.

This is apparent when reviewing the Statement of Facts,, Deferred Prosecution Agreement and Approved Judgment relevant to the U.K. Serious Fraud Office prosecution of Airbus. (See here for a collection of the U.K. documents and see here for the prior post regarding the U.S. enforcement action). The U.K. documents provided a substantially more thorough and transparent glimpse into the underlying conduct compared to the U.S. resolution documents.

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Facade Of Enforcement Across The Pond

Laughable

A facade of Foreign Corrupt Practices Act enforcement is when a business organization – often for reasons of risk aversion and efficiency – agrees to resolve an enforcement action in the absence of any judicial scrutiny even though no employee or agent of the company (business organizations obviously can only act through real human beings) was charged. (See here for the article “The Facade of FCPA Enforcement” and here for the article “Measuring the Impact of NPAs and DPAs on FCPA Enforcement.”)

Even more troubling is when employees are charged, put the government to its burden of proof, are acquitted yet the business organization still resolves an enforcement action based on the same underlying conduct.

This 2014 post, published after the United Kingdom formally adopted deferred prosecution agreements, was titled “The U.K. Enters the Facade Era.” As discussed below, recently there was a major facade moment in the U.K.

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Following U.K. DPA, Company Executives Acquitted Of The Same Alleged Underlying Conduct

perplexed

A guest post today from Dan Stowers (Shoosmith LLP in London).

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Michael Sorby was the first managing director to be prosecuted, and then found not guilty, following the conclusion of a Deferred Prosecution Agreement (DPA)[1] between the Serious Fraud Office (SFO) and Sarclad (formally publicised as XYZ). (See here and here). Represented by Dan Stowers (Shoosmiths LLP), John Harrison QC (St Pauls Chambers) and Henry Grunwald QC (Charter Chambers) the verdicts from the jury, and directed by the trial judge, further confirms that the SFO has struggled to prosecute individuals on charges stemming from the DPAs, which became available in 2014. The verdicts throw into doubt any prosecution of individuals following a DPA and the suitability of the DPA process as a whole.

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Friday Roundup

Roundup

Seeking whistleblowers, scrutiny alert, and across the pond. It’s all here in the Friday roundup.

Seeking Whistleblowers

As highlighted in this previous post, a few months ago the Commodity Futures Trading Commission issued this enforcement advisory concerning companies and individuals “that timely and voluntarily disclose to the Division violations of the Commodity Exchange Act (CEA) involving foreign corrupt practices, where the voluntary disclosure is followed by full cooperation and appropriate remediation.”

Certain sources, including the FCPA Blog, falsely claimed that the CFTC is now investigating and prosecuting FCPA violations; however the CFTC advisory clearly concerns violations of the CEA. (See here for a recent FCPA Flash podcast on the topic).

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