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FCPA “Tips” Continue To Be A Minor Component Of The SEC’s Whistleblower Program

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The Dodd-Frank Act enacted in July 2010 contained whistleblower provisions applicable to all securities law violations including those under the Foreign Corrupt Practices Act.

In this prior post from July 2010, I predicted that the whistleblower provisions would have a negligible impact on FCPA enforcement. As noted in this prior post, my prediction was an outlier (so it seemed) compared to the flurry of law firm client alerts predicting that the whistleblower provisions would have a significant impact on FCPA enforcement. Many FCPA Inc. participants seemed so eager for a marketing opportunity to sell compliance services, that some even called the generic whistleblower provision the FCPA’s “new” whistleblower provisions.

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Second Circuit Upholds SEC’s Denial Of Whistleblower Award In Connection With FCPA Enforcement Action

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In this opinion, the Second Circuit recently upheld the SEC’s denial of a whistleblower award in connection with a Foreign Corrupt Practices Act enforcement action.

As framed  in the Court’s opinion: “John Doe petitions for review of an order of the Securities and Exchange Commission (“SEC”) denying him a whistleblower award. […] In general, federal law directs the SEC to pay a monetary award to a whistleblower when that whistleblower “voluntarily provided original information to the Commission that led to the successful enforcement” of “any judicial or administrative action brought by the Commission under the securities laws that results in monetary sanctions exceeding $1,000,000.” But the SEC may not make an award “to any whistleblower who is convicted of a criminal violation related to the judicial or administrative action for which the whistleblower otherwise could receive an award.”

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Friday Roundup

Roundup

Settled, not a victim, and monitor reports. It’s all here in the Friday roundup.

Settled

As highlighted in this prior post, in 2021 Shaquala Williams (a former employee of JPMorgan in New York city) filed a civil complaint in federal court (S.D.N.Y) against JPMorgan in connection with (at least in part) compliance obligations imposed upon JPMorgan in connection with resolution of its 2016 FCPA enforcement action. JPMorgan responded (see here) by filing a motion for summary judgment which was mostly denied by Judge Jed Rakoff who set a trial date for November 2022.

As reported here, the parties have reached an agreement to resolve the matter.

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Words Matter As The First Circuit Concludes That The FCPA Is Not A “Rule Or Regulation” Of The SEC

wordsmatter

Recently, the First Circuit concluded that the Foreign Corrupt Practices Act is not “a rule or regulation” of the SEC as that term is used in Section 1514A of Sarbanes-Oxley (a whistleblower protection provision).

In terms of background, Earl Donald Baker was an employee of Smith & Wesson (“S&W”) who was terminated. Thereafter, Baker filed a complaint against S&W asserting that S&W retaliated against him for reporting illegal conduct by S&W employees. He asserted, among other things, a claim under Section 1514A of Sarbanes-Oxley and alleged that the purported misconduct that he reported to S&W’s human resources and general counsel was that management employees received large bribes and provided improper preferential treatment to a vendor.

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JPMorgan Responds To Whistleblower Complaint Connected To Its 2016 FCPA Enforcement Action

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As highlighted here and here, in November 2016 JPMorgan (and related entities) resolved a $202.6 million DOJ and SEC Foreign Corrupt Practices Act enforcement action based on its alleged improper hiring and internship practices that the U.S. government has labeled bribery and corruption.

The DOJ action was resolved through a three year non-prosecution agreement involving JPMorgan Securities (Asia Pacific) Limited (“JPMorgan-APAC), a wholly subsidiary of JP Morgan, which involved a variety of requirements and undertakings imposed upon the company – as is typical in resolving FCPA enforcement actions.

As highlighted here, in late 2021 Shaquala Williams (a former employee of JPMorgan in New York city) filed a civil complaint in federal court (S.D.N.Y) against JPMorgan.

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