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Issues To Consider From The Sargeant Marine Enforcement Action

Issues

This prior post went in-depth into the recent Foreign Corrupt Practices Act enforcement action against Sargeant Marine Inc. (SMI) and this post continues the analysis by highlighting additional issues to consider.

Why Disclose?

For approximately 15 years, the DOJ has been encouraging business organizations to voluntarily disclose FCPA violations. Yet, time and time again, the DOJ undermines its goal by how it resolves certain enforcement actions.

The SMI matter is the latest example that should cause a board member, audit committee member or others involved in the voluntary disclosure decision to pause.

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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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Friday Roundup

Roundup

Fear based marketing, not a victim, dismissed, and for the reading stack.

It’s all here in the Friday roundup.

Fear Based Marketing

Another example of lawyers trying to market the COVID-19 situation by asserting that “the novel and exigent circumstances brought on by the pandemic significantly increase companies’ risk exposure under the Foreign Corrupt Practices Act and global anti-bribery laws.”

The piece even uses the personal protective equipment hypothetical that not even top DOJ officials seemed to be concerned about. (See here).

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Corruption Settlements, Coronavirus And The Road Paved With Good Intentions

good intentions

A guest post today from Hughes Hubbard & Reed attorneys Kevin Abikoff and Aline Osorio.

In connection with the 2018 consolidated anti-corruption resolution with Petrobras, the Brazilian prosecutors as part of the settlement with Petrobras sought and obtained approval to allow payment of $682 million from the settlement to benefit education and the environment in Brazil.

On March 19, 2020, the Brazilian prosecutor general applied to the Brazilian Supreme Court to redirect the unspent portion of the settlement funds away from their original destination and instead to be used in the fight against the COVID-19 pandemic in Brazil.

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Deputy Solicitor General At The Supreme Court – “There Really Is No Obvious Universe Of Individual Victims From An FCPA Violation”

supremecourt

Earlier this week, the Supreme Court heard oral argument in Liu v. SEC.

As highlighted in this prior post, the question presented is “whether the Securities and Exchange Commission may seek and obtain disgorgement from a court as ‘equitable relief’ for a securities law violation even though this Court has determined that such disgorgement is a penalty.”

As previously noted, even though Liu is not an FCPA matter the question presented in FCPA relevant given the prominence of disgorgement in SEC corporate FCPA enforcement actions.

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