KT Corporation is a Seoul, South Korea based telecommunications company with American Depositary Shares registered with the SEC and traded on the New York Stock Exchange.
Yesterday, the SEC announced that the company agreed to pay $6.3 million “to resolve charges that it violated the Foreign Corrupt Practices Act by providing improper payments for the benefit of government officials in Korea and Vietnam.”
In summary fashion, this administrative order finds:
What happens when the Greek, Swiss, and South Korean subsidiaries of a Swiss company engage in improper conduct in Greece, Vietnam and South Korea? Why of course, approximately $345 million flows into the U.S. treasury.
Yesterday, Novartis joined the long and growing list of FCPA repeat offenders as the DOJ and SEC announced (see here and here) a combined approximate $347 million enforcement action. (As highlighted in this prior post, in 2016 Swiss pharmaceutical company Novartis coughed up $25 million to resolve a SEC FCPA enforcement action focused on the conduct of its indirect Chinese subsidiaries).
Yesterday’s enforcement action included a DOJ component (in which the company agreed to pay approximately $234 million) and a SEC component (in which the company agreed to pay approximately $113 million).
Late last Friday, the DOJ and SEC announced (here and here) a record-setting Foreign Corrupt Practices Act action Swedish telecom company Ericsson (a company with American Depositary Shares traded in the U.S.). The $1.06 billion settlement amount is the largest net FCPA settlement amount in history surpassing the $850 million FCPA enforcement action against Russian telecom company MTS in March 2019 (see here).
The enforcement action concerned conduct in Djibouti, China, Vietnam, Kuwait, Indonesia, and Saudi Arabia.
Those who were predicting that FCPA enforcement would wane in a Trump administration were encouraged to take a deep breath. (See here for the prior post). Among other things, it was noted that “if you believe that FCPA enforcement will decline in a Trump administration then you presumably must think that the DOJ and the SEC will start refusing to “process” corporate voluntary disclosures” (the single largest source of corporate FCPA enforcement actions).
Here is a fact to contemplate. The number of DOJ corporate FCPA enforcement actions in the first five months of the Trump administration (2 – both originating from corporate voluntary disclosures) equals the number of DOJ corporate FCPA enforcement actions in 2015 (2).
Yesterday, the DOJ once again quietly updated its FCPA Pilot Program “declinations” page to release this June 21st letter agreement addressed to Nathaniel Edmonds (Paul Hastings) counsel for CDM Smith Inc. (“CDM Smith”), a privately held engineering and construction firm incorporated and headquartered in Boston, Massachusetts.
Last week the DOJ announced Foreign Corrupt Practices Act, and related charges, against four individuals for their roles in a scheme to pay $2.5 million in bribes to facilitate the $800 million sale of a commercial building in Vietnam (the so-called Landmark 72 pictured at left) to a Middle Eastern sovereign wealth fund.
It certainly was not a typical FCPA enforcement action.
In fact it was downright strange in that the bribery scheme was unsuccessful and the third party intended to facilitate the bribery scheme simply pocketed the money for himself.
