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Friday Roundup

By on December 21, 2012 in Bharat Sodha, China, David Edmonds, Double Standard, FCPA Inc., FCPA Scholarship, FCPA Sentences, Foreign Issuers, IBM, Nidhi Vyas, Nigeria, Paul Jacobs, Permits / Licenses / Customs / Tax, Serious Fraud Office, SOEs, Swift Group, Trevor Bruce, United Kingdom, Victims, Whistleblowers, Year in Review 2011

Better late than never, Judge Leon pulls a Judge Rakoff, Edmonds sentenced, it’s official, whistleblower statistics, it ought to stop marketing, China related issues, ICE melted quickly, and a U.K. enforcement action.  It’s all here in the Friday roundup.

The Foreign Corrupt Practices Act Under The Microscope

Academic publishing is seldom quick. Yet before the calendar flips into another year, I am pleased to share my article concerning 2011 FCPA enforcement.  The abstract of “The Foreign Corrupt Practices Act Under The Microscope” (see here to download) recently published in the University of Pennsylvania Journal of Business Law is as follows.  Information in the article is current as of January 16, 2012.

For most of the Foreign Corrupt Practices Act’s history, key decisions concerning its scope and enforcement were made behind closed doors around conference room tables in Washington, D.C. The FCPA took on a life of its own and, in many instances, the statute came to mean whatever the DOJ or SEC could get putative corporate FCPA defendants (mindful of the consequences of actual prosecuted charges) to agree to behind those closed doors. However, as the enforcement agencies continued to push the envelope on enforcement theories and practices, and as the DOJ brought more individual FCPA enforcement actions, including through manufactured sting operations, business entities and individuals alike began to openly fight back. While many FCPA enforcement decisions and procedures remain opaque, 2011 witnessed the most intense year of public scrutiny in the FCPA’s history. This Article (i) provides an overview of 2011 FCPA enforcement and discusses certain problematic enforcement trends, and (ii) highlights how in 2011 the FCPA was subjected to the most meaningful public scrutiny in its history. FCPA enforcement trends and scrutiny demonstrate that as the FCPA nears its thirty-fifth year, basic legal and policy questions remain as to the purpose, scope, and effectiveness of the FCPA.

Start your collection of FCPA Year in Reviews.  For my 2011 (short version), see here.  For 2010, see here (short version), here (long version).  For 2009, see here (long version).

Judge Leon Pulls a Judge Rakoff

My post concerning the SEC’s March 2011 enforcement action against IBM was titled “Questions Abound in IBM Enforcement Action.”  (See here).  Among the issues I discussed were the following.  That in December 2000, IBM resolved an FCPA enforcement action and consented, as part of the settlement, to the entry of an Order that requires IBM to cease and desist from committing or causing any future violation of [the FCPA’s books and records provisions].  I noted that because the March 2011 enforcement action alleged FCPA books and records charges, that IBM was thus in clear violation of the 2000 court order.

The case was assigned to Judge Richard Leon (of Africa Sting fame) and lingered for a long time.  This Wall Street Journal Corruption Currents post and this Bloomberg article report that Judge Leon has refused to approve the settlement.

As stated by Bloomberg – “The heart of the dispute is that Leon, who has had the case under review for 22 months, wants reporting on a broader range of possible wrongdoing than the company is willing to turn over.  Leon, who spoke loudly and angrily, asked why the regulator would agree to limit such requirements for a company with a history of books-and-records violations. […]   “I guess you want that $10 million judgment on your list of achievements this year,” Leon told [the SEC lawyer]. “Well, it’s not going to happen.”  He scheduled a hearing for Feb. 4.”

As stated by Wall Street Journal Corruption Current – “Leon also questioned broader SEC settlement policies and warned that he was among “a growing number of district judges who are increasingly concerned” by those policies.”

In not “rubber stamping” the SEC – IBM settlement, Judge Leon pulled a Judge Rakoff.  Judge Rakoff of the S.D. of N.Y. has been a frequent focus on this site – see here, here, here and here.  See also, the discussion of Judge Rakoff in my 2010 article “The Facade of FCPA Enforcement.”

Edmonds Sentence

This past June, David Edmonds, a defendant in the long-running “Carson” enforcement action involving former employees of Control Components Inc., agreed to plead guilty on the eve of trial to substantially reduced charges. (See here for the prior post).  Earlier this week, Judge James Selna sentenced Edmonds to four months in prison and four months of home confinement.  (See here for Judge Selna’s sentencing memo).  As noted in the DOJ’s sentencing memo (here), the DOJ sought a 14 month prison sentence.

Other defendants previously sentenced in the case are Stuart Carson (4 months in prison followed by 8 months of home detention), Hong Carson (3 years probation to include 6 months of home detention) and Paul Cosgrove (13 months home detention).

It’s Official

Imagine a foreign country in which the president is actively seeking and accepting corporate money to fund inaugural festivities.  All sorts of red flags right?

But wait, this describes the United States and President Obama’s upcoming inauguration.  As detailed in this prior post, President Obama’s fundraising advisers “have urged the White House to accept corporate donations for his January 2013 inaugural celebration rather than rely exclusively on weary donors who underwrote his $1 billion re-election effort.”

It’s now official.  As noted by this recent New York Times article “President Obama’s finance team is offering corporations and other institutions that contribute $1 million exclusive access to an array of inaugural festivities.”  As noted in the article, Obama’s finance team is offering four different packages “with differing levels of access depending on the level of contribution.”

Our FCPA enforcement agencies are bringing enforcement actions against companies for conduct that includes providing $600 bottles of wine, Cartier watches, cameras, kitchen appliances, business suits, and executive education classes to individuals employed by foreign companies that are allegedly state-owned or state-controlled.  (These are all allegations found in recent FCPA enforcement actions).

But remember, as Assistant Attorney General Lanny Breuer recently declared (see here), “we in the United States are in a unique position to spread the gospel of anti-corruption.”

Whistleblower Statistics

The Dodd-Frank Act enacted in July 2010 contained whistleblower provisions applicable to all securities law violations including the Foreign Corrupt Practices Act.  In this prior post from July 2010, I predicted that the new 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 that predicted that the whistleblower provisions would have a significant impact on FCPA enforcement.

So far, there have not been any whistleblower awards in connection with FCPA enforcement actions.  Given that enforcement actions (from point of first disclosure to resolution) typically take between 2-4 years, it still may be too early to effectively analyze the impact of the whistleblower provisions on FCPA enforcement.

Whatever your view, I previously noted that the best part of the new whistleblower provisions were that its impact on FCPA enforcement can be monitored and analyzed because the SEC is required to submit annual reports to Congress.  Last month, the SEC released (here) its annual report for FY2012.

Of the 3,001 whisteblower tips received by the SEC in FY2012, 3.8% (115) related to the FCPA.  As noted in this similar post from last year, in FY2011 (a partial reporting year)  3.9% of the 334 tips received by the SEC related to the FCPA.

It Ought to Stop Marketing

In this previous post titled “It Ought to Stop” I focused on the FCPA conference industry and how conference firms drive attendance to their events by touting the public servants who will speak at the event.

Here is how conference firm C5 touts its upcoming conference in a press release (here).

Ask the U.S. DOJ and U.S. SEC directly how your company can remain compliant

Hear the latest on the newly released FCPA guidance. Along with the U.S. Securities & Exchange Commission’s, Charles E. Cain, the Deputy Chief of the FCPA Unit, Enforcement Division, we will have Matthew S. Queler, from the Criminal Division at the U.S. Department of Justice, presenting comprehensive, insightful and practical details of the U.S. government’s interpretation of the guidance, and highlight recent examples designed to help prevent future violations.  Their session at 14:00 on Day 1, will help you navigate the ever evolving markets and recognize the current enforcement trends; giving you the tools to reanalyse risk profiles and minimize areas of exposure. Finally, to top off the hour you will be given an exclusive opportunity to have your FCPA questions answered. The only way to obtain answers directly from the U.S. DOJ and U.S. SEC is to register for this forum!

The event, depending when you register and which package you select, costs between €4341 – €1795.

It ought to stop.

China Related Issues

An occassional topic of discussion on this site is Chinese state-owned enterprises (SOEs) and how such companies are frequently doing business outside its borders, including here in the U.S. (See here, here, and here for prior posts).

Wall Street Journal Columnist Dennis Berman “hit the nail on the head” in his recent column when he noted that one of “the most intriguing business stories of the past month has been taking place in San Francisco, where a group of U.S. developers is planning the biggest real-estate expansion there since the 1906 earthquake. The group—which includes Lennar Corp., Ross Perot Jr. and others —isn’t getting financing from an American bank or pension fund. No, the money, some $1.7 billion of it, is coming from the China Development Bank, a policy arm of the Chinese state.  As Berman further notes, a financing contingency is that China Railway Construction Corp. – a state-owned infrastructure builder with roots in the People’s Liberation Army—take part in the projects, which will develop up to 20,000 new homes.

Another occasional topic of discussion on this site is how Chinese companies are listing shares on U.S. exchanges and thus becoming “issuers” for purposes of the FCPA.  (See here for a prior post).  A core FCPA enforcement action of a Chinese issues has never occurred, but I predict it will some day – diplomatic and foreign policy issues aside.  Only now, the universe of potential targets is shrinking.  As noted in this recent Wall Street Journal article, several Chinese companies have delisted from U.S. exchanges.  The article provides the following information.  “At the peak, at year-end 2010, 167 Chinese companies were listed on Nasdaq and 99 on the NYSE. That compares with 84 China-based companies on NYSE and 129 on Nasdaq as of Nov. 30, 2012, according to the exchanges.”  For more, see this recent article from the New York Times.

ICE Melted Quickly

This recent post highlighted the cert petition of Instituto Constarricense de Electricidad of Costa Rica (“ICE”) to the Supreme Court related to victim issues in connection with the December 2010 Alcatel-Lucent FCPA enforcement action.  After several unsuccessful 11th Circuit appeals, ICE petitioned the Supreme Court to hears it case (see here).  The question presented for review is as follows.  “Whether a crime victim who is denied rights conferred by the federal Crime Victims’ Rights Act has a right to directly appeal the denial of those rights.”

The ice melted quickly as recently the Supreme Court denied ICE’s petition.

U.K. Enforcement Action

Earlier this week, the U.K. Serious Fraud Office announced (here) charges against former employees of Swift Group (an oil and gas services provider) following “a two-year investigation into allegations of corruption in relation to the tax affairs of Swift Technical Energy Solutions Ltd, a Nigerian subsidiary of the Swift Group of companies.”  According to the SFO release,  “the value of the bribes alleged to have been paid is approximately£180,000.”

The SFO release notes that Paul Jacobs (the former Chief Financial Officer of Swift), Bharat Sodha (the former Tax Manager of Swift), Nidhi Vyas (the former Financial Controller of Swift), and Trevor Bruce (the former Area Director for Nigeria of Swift) were charged in relation to “bribes to tax officials to avoid, reduce or delay paying tax on behalf of workers placed by Swift.  The charges relate to payments said to have been made to agents of the Rivers State Board of Internal Revenue and the Lagos State Board of Internal Revenue, both in Nigeria. The payments were made in 2008 and 2009.”

*****

A happy holiday season to all.

Year In Reviews

By on January 27, 2012 in FCPA Scholarship, Year in Review 2011

If your idea of a fantastic Friday is reading additional FCPA Year in Review pieces, you are in luck!

My recent piece published in the White Collar Crime Report (see here to download) starts as follows.  “For most of the Foreign Corrupt Practices Act’s history, key decisions concerning its enforcement and direction were made behind closed doors around conference room tables in Washington, D.C.  While many enforcement decisions and procedures remain opaque, 2011 witnessed the most intense year of public scrutiny in the FCPA’s history.”  The article, in addition to providing a brief overview of the 2011 enforcement year, details the scrutiny the FCPA was subjected to in the past year.  This scrutiny reveals that as the FCPA nears its 35th year, basic legal and policy questions remain as to the purpose, scope, and effectiveness of the law.”

WilmerHale’s recent Year in Review (here) states as follows.  “The most notable development of 2011 is the record level of trials and related litigation, with guilty verdicts returned in the Haiti Teleco cases, a mistrial declared in the trial of the first group of SHOT Show Sting defendants, and the convictions returned in the Lindsey Manufacturing case being vacated and the indictments dismissed as a result of the court’s conclusion that the government had engaged in prosecutorial misconduct.”

Debevoise & Plimpton’s recent Year in Review (here) states as follows.  “The adage that ‘things that cannot go on forever will not’ frames an essential theme for analysis of FCPA enforcement in 2011. As the DOJ and SEC turned their sights on a raft of cases against individuals, the monetary recoveries by the U.S. enforcement agencies in 2011 declined significantly from the nearly $1.8 billion recovered in 2010. But in-house counsel and corporate compliance departments would be wise not to take from this singular statistic the message that FCPA enforcement is on the wane. Aside from the fallacy of drawing from one year’s decline in recoveries the conclusion that the government has lost some, or even any, of its ability to extract concessions from errant companies, it is necessary to gauge the effectiveness of the U.S. government’s programs by focusing on the specifics of individual and corporate prosecutions, the less visible ways the enforcement program exerts pressure on companies to upgrade compliance, the effects of new anti-corruption programs overseas and the U.S. effort to foster enforcement by and cooperate with other nations, and, perhaps most important, the pipeline of cases yet to be filed by regulators in the United States.”

Squire Sander’s in-depth Year in Review digest is here.

*****

A good weekend to all.

 

Healthcare Providers, Telecom (And Other SOE) Employees, Veterinarians, And Liquor Store Employees – The “Foreign Officials” Of 2011

By on January 17, 2012 in Facilitating Payments, FCPA Statistics, Foreign Official, Legislative History, Permits / Licenses / Customs / Tax, Year in Review 2011

A “foreign official.”  Without one, there can be no FCPA anti-bribery violation (civil or criminal).  Who were the “foreign officials” of 2011 (at least from an enforcement perspective – recognizing of course that the meaning of this key FCPA element is the subject of much on-going dispute).

This post, describes the “foreign officials” from 2011 corporate FCPA enforcement actions.  There were 16 core corporate enforcement actions in 2011.  Of the 16 enforcement actions, 13 (81%) involved, in whole or in part, employees of alleged state-owned or state-controlled enterprises or entities (“SOEs”).  These enterprises and entities ranged from manufacturing companies, oil and gas companies, telecommunications companies, health-care entities, engineering firms / design institutes, liquor stores, and insurance companies.

In 2010, 60% of corporate FCPA enforcement actions involved, in whole or in part, employees of alleged SOEs (see here at pages 108-119).  In 2009, 66% of corporate FCPA enforcement actions involved, in whole or in part, employees of alleged SOEs (see here at pages 410-44).

As to whether Congress intended employees of SOEs to be “foreign officials” under the FCPA, see here for my “foreign official” declaration in the Carson case and this prior post which includes links to all judicial decisions on this key FCPA element.

Not only did SOE employees comprise the bulk of “foreign officials” in 2011, but so too did individuals with apparent ministerial or clerical duties (see Tyson Foods, IBM, Ball Corp., and Diageo).

As noted in the 2010 “foreign official” post (here), this is noteworthy for the following reason.

The FCPA’s original definition of “foreign official” was as follows. “… any officer or employee of a foreign government or any department, agency, or instrumentality thereof, or any person acting in an official capacity for or on behalf of such government or department, agency or instrumentality. Such terms do not include any employee of a foreign government or any department, agency, or instrumentality thereof whose duties are essentially ministerial or clerical.”

This last sentence was the FCPA’s original (albeit indirect) facilitating payment or grease exception. The relevant House Report states in pertinent part as follows: “… a gratuity paid to a customs official to speed the processing of a customs document would not be reached by this bill. Nor would it reach payments made to secure permits, licenses, or the expeditious performance of similar duties of an essentially ministerial or clerical nature which must be performed in any event.”

When Congress amended the FCPA in 1988 it, among other things, amended the definition of foreign official by removing this indirect facilitating payment exception from the “foreign official” definition by creating a stand-alone facilitating payment exception currently found in the statute.

The relevant House Report indicates that Congress did not seek to disturb Congress’s original intent. “The policy adopted by Congress in 1977 remains valid, in terms of both U.S. law enforcement and foreign relations considerations. Any prohibition under U.S. law against this type of petty corruption would be exceedingly difficult to enforce, not only by U.S. prosecutors but by company officials themselves. Thus while such payments should not be condoned, they may appropriately be excluded from the reach of the FCPA. U.S. enforcement resources should be devoted to activities have much greater impact on foreign policy.”

In sum, of the 16 corporate FCPA enforcement actions from 1011, 15 (94%) involved, in whole or in part, SOE employees and/or “foreign officials” with apparent ministerial or clerical duties.  The one exception is Armor Holdings which involved payments to a United Nations procurement official, an employee of a “public international organization” a term inserted into the FCPA’s “foreign official” definition by way of the 1998 amendments.

The remainder of this post describes (as per DOJ/SEC allegations) the “foreign officials” of 2011.  As is apparent from the specific descriptions below, in certain instances the enforcement agencies describe the “foreign official” with reasonable specificity; in other instances with virtually no specificity.

[Note:  certain of the enforcement actions below technically only involved FCPA books and records and internal control charges.  As most readers know, actual charges in most FCPA enforcement actions hinge on voluntary disclosure, cooperation, collateral consequences, and other non-legal issues.  Thus, even if an FCPA enforcement action is resolved without FCPA anti-bribery charges, the actions remain very much about the “foreign officials” involved.  As I’ve said before, if an employee of a U.S. company consistently entertains his brother-in-law in the corporate suite and seeks reimbursement for “client entertainment” you will not be reading about this FCPA books and records and internal controls enforcement action]

Maxwell Technologies

DOJ

“Pinggao Group Co. Ltd. (formerly Pingdingshan High Voltage Switchgear Works (“Pinggao Group”) was a state-owned manufacturer of electric-utility infrastructure in Henan Province China.”

“New Northeast Electric Shenygan HV Switchgear Co. Ltd. (“Shenygang HV”) was a state-owned manufacturer of electric-utility infrastructure in Liaoning Province China.”

“Xi-an XD High Voltage Apparatus Co., Ltd. a/k/a Xi-an Shinky High Voltage Electric Co. Ltd. (“Xi-an XD”) was a state-owned manufacturer of electric utility infrastructure in Shaanxi Province China.”

“… payments conveyed to officials of foreign governments employed by state-owned entities, including Pinggao Group, Shenyang HV, and Xi-an XD …”

SEC

Presumably the same as above, although the SEC complaint merely refers to “officials at state-owned entities in China.”

Tyson Foods

DOJ

“The Government of Mexico administers an inspection program, Tipo Inspeccion Federal (“TIF”), for meat-processing facilities.  […].  The inspection program at each facility is supervised by an on-site veterinarian who is a government employee (“TIF veterinarian”) paid by the state, who ensures that all exports are in conformity with Mexican health and safety laws.  Therefore, TIF veterinarians are foreign officials as defined by the FCPA …”.

“Wives of the TIF veterinarians.”

SEC

Same as above.

IBM

SEC

“government officials in South Korea and China”

“the foreign government officials involved worked for sixteen South Korean government entities (“SKGE”)”; “Chief Operations for the Electronic Operations Division of SKGE 1”; “manager of the government controlled SKGE 2”; “SKGE 3’s Director of Planning”; “SKGE 4 was a state-owned agency of the South Korea government – an employee of SKGE 4 responsible for reviewing personal computer procurement bids”; “Director of SKGE 5’s information technology department”; “government officials of SKGE 6”; “key decision makers at ten other SKGE’s;”

“Chinese government officials”; employees of “government-owned or controlled customers in China”

Ball Corp.

SEC

“employees of the Argentine government to secure the importation of prohibited use machinery and the exportation of raw materials at reduced tariffs” “government customs officials”

JGC Corp.

DOJ

“The Nigerian National Petroleum Corporation (“NNPC”) was a Nigerian government-owned company charged with development of Nigeria’s oil and gas wealth and regulation of the country’s oil and gas industry.  NNPC was a shareholder in certain joint ventures with multinational oil companies.  NNPC was an entity and instrumentality of the Government of Nigeria and its officers and employees were ‘foreign officials’ within the meaning of the FCPA.”

“Nigeria LNG Limited (“NLNG”) was created by the Nigerian government to develop the Bonny Island Project and was the entity that awarded the related […] contracts.  The largest shareholder of NLNG was NNPC, which owned 40% of NLNG.  The other owners of NLNG were multinational oil companies.  Through the NLNG board members appointed by NNPC, among other means, the Nigerian government exercised control over NLNG, including but not limited to the ability to block the award of […] contracts.  NLNG was an entity and instrumentality of the Government of Nigeria and its officers and employees were ‘foreign officials’ within the meaning of the FCPA.”

Bribes to “officials of the executive branch of the Government of Nigeria, officials of NNPC, officials of NLNG, and others.”

Comverse Technologies

DOJ

“Individuals connected to OTE, including employees of OTE’s subsidiaries Cosmote, Cosmofon, and Cosmorom, in order to obtain purchase orders from those companies for Comverse Ltd. products and services, resulting in approximately $1.25 million in adjusted operating income;” OTE is “Hellenic Telecommunications Organization S.A. – a telecommunications provider controlled and partially owned by the Greek Government – the Greek Government was OTE’s largest single shareholder and maintained an interest in over one-third of OTE’s issued share capital.”

As detailed in this prior post, during the relevant time period, the Greek Government owned between 33-38% of OTE, thus establishing a new foreign official “limbo low.”

SEC

Same as above

Johnson & Johnson

DOJ

“Greece has a national healthcare system wherein most Greek hospitals are publicly owned and operated. Health care providers who work at publicly-owned hospitals (“HCPs”) are government employees, providing health care services in their official capacities. Therefore, such HCPs in Greece are “foreign officials” as that term is defined in the FCPA.”

“Poland has a national healthcare system. Most Polish hospitals are owned and operated by the government and most Polish HCPs [health care providers] are government employees providing health care services in their official capacities. Therefore, most HCPs in Poland are “foreign officials” as defined by the FCPA.”

“The national healthcare system in Romania is almost entirely state-run. The healthcare system is funded by the National Health Care Insurance Fund (“CNAS”), to which employers and employees make mandatory contributions. Most Romanian hospitals are owned and operated by the government and most HCPs in Romania are government employees. Therefore, most HCPs in Romania are “foreign officials” as defined by the FCPA.”

SEC

Same as above.

Tenaris

DOJ

Employees of OJSC O’ztashqineftgaz (“OAO”) “a wholly owned subsidiary of Uzbekneftegaz, the state holding company of Uzbekistan’s oil and gas industry.”

Employees of Uzbekekspertiza JSC, “an Uzbekistani government agency.”

SEC

Same as above.

Rockwell Automation

SEC

Employees of Chinese Design Institutes “which were typically state-owned enterprises that provided design engineering and technical integration services that can influence contract awards by end-user state-owned customers” and employees of “other state-owned companies.”

Armor Holdings

DOJ

“Procurement official of the United Nations”

SEC

Same as above.

Cinergy Telecommunications

DOJ

“Telecommunications D’Haiti (“Haiti Teleco”) was the Republic of Haiti’s state-owned national telecommunications company.  Haiti Teleco was the only provider of non-celluar telephone service to and from Haiti. […]  Patrick Joseph was the Director General of Haiti Teleco.  […]  During his tenure at Haiti Teleco, Patrick Joseph was a ‘foreign official’ as that term is defined in the FCPA.”  “Jean Rene Duperval was the Director of International Relations of Haiti Teleco. […]  During his tenure at Haiti Teleco, Duperval was a ‘foreign official’ as that term is defined in the FCPA.”  “Official VJ was the Governor of the Banque de la Republique d’Haiti (“Bank of Haiti”), the state-owned and state-controlled central bank of Haiti.  […]  During his tenure at the Bank of Haiti, Official VJ was a ‘foreign official’ as that term is defined in the FCPA.”

For previous posts on Haiti Teleco, see here, here and here.

Bridgestone Corp.

DOJ

“Foreign government officials in Latin America and elsewhere;” “employees of state-owned entities in Mexico and other Latin American countries;” employee at Petroleos Mexicanos (“PEMEX”).

Diageo

SEC

“Various government officials in India, Thailand, and South Korea”

“Hundreds of Indian officials responsible for purchasing or authorizing the sale of beverages”; “employees of government liquor stores in and around New Delhi”; “government employees of the Indian military’s Canteen Stores Department”; “government officials in the North Region of India and in the State of Assam for the purpose of securing label registrations”; “Excise officials to secure import permits and other administrative approvals.”

A “Thai government and political party official”;   “At various times the Thai Official served as Deputy Secretary to the Prime Minister, Advisor to the Deputy Prime Minister, and Advisor to the Ministry of Agriculture and Cooperatives.  The Thai Official also served on a committee of the ruling Thai Rak Thai political party, and as a member and/or advisor to several state-owned or state-controlled industrial and utility boards.”

South Korean “customs official”; “other South Korean government officials”; “South Korean military officials”

Watts Water Technologies

SEC

Employees of certain Chinese state-owned design institutes.

Aon

DOJ

“government officials in Costa Rica”; employees of “Instituto Nacional De Deguros (“INS”), Costa Rica’s state-owned insurance company”

SEC

Same as above.  In addition, officials from an “Egyptian government-owned company, the Egyptian Armament Authority (“EAA”), and its U.S. arm, the Egyptian Procurement Office (“EPO”); “Vietnam Airlines, a Vietnamese government-owned entity”; “BP Migas and Pertamina, two Indonesia state-owned entities in the oil and gas industry”; “Myanmar Airways and Myanmar Insurance, two government-owned entities”; “Biman Bangladesh Airways and Sudharan Bima Corporation, two government-owned entities”; “the son of a former high-ranking government official in Bangladesh with several important political connections”

Magyar Telekom / Deutsche Telekom

DOJ

“Telekom Crne Gore A.D., n/k/a “Crnogorski Telekom,” (“TCG”) and its mobile company subsidiary were, respectively, the Montenegrin state-owned fixed line and cellular telecommunications companies.  […] Before Magyar Telekom acquired TCG, it was controlled by the Government of Montenegro.  Accordingly, employees of TCG were ‘foreign officials’ within the meaning of the FCPA.”

“Macedonian Political Party A and Macedonian Political Party B were political parties in the Macedonian governing coalition during 2005, among other times.  Each party represented a traditional ethic group in Macedonia.  As such, Macedonian Political Party A and Macedonian Political Party B were each a “foreign political party” within the meaning of the FCPA.”  “Macedonian Official #1 was a high-ranking government official with responsibility related to telecommunications laws and regulations […] and a leader of Macedonian Political Party A.  As such, Macedonian Official #1 was a “foreign official” and an official of a foreign political party within the meaning of the FCPA.” “Macedonian Official #2 was a high-ranking government official with responsibility for telecommunications laws and regulations […] and a leader of Macedonian Political Party B.  As such, Macedonian Official #2 was a “foreign official” and an official of a foreign political party within the meaning of the FCPA.”

SEC

Same as above.

DOJ Enforcement Of The FCPA – Year In Review

By on January 11, 2012 in Deferred Prosecution Agreements, DOJ, DOJ Enforcement Action, FCPA Statistics, Foreign Issuers, Foreign Nationals, Individual Enforcement Action, Non-Prosecution Agreement, Voluntary Disclosure, Year in Review 2011

Yesterday, I highlighted various aspects of the SEC’s enforcement of the FCPA in 2011.

In this post, I highlight certain facts and figures from the DOJ’s FCPA enforcement program in 2011.

In 2011, the DOJ brought 11 corporate FCPA enforcement actions (this includes the enforcement action against Cinergy Telecommunications that remains pending).

[In 2010, the DOJ brought 16 corporate FCPA enforcement actions (in addition to the BAE enforcement action that was related to the FCPA, but did not involve FCPA charges and the Lindsey Manufacturing enforcement action that began in 2010 and resulted in the convictions being vacated and the indictment dismissed in 2011 due to prosecutorial misconduct – see here)]

In the 11 corporate DOJ FCPA enforcement actions from 2011, the DOJ collected approximately $355 million in criminal fines.  Including the $149 million forfeiture in the Jeffrey Tesler individual enforcement action which resulted in a plea agreement in 2011 (see here), the DOJ’s FCPA enforcement program in 2011 took in approximately $504 million.  Approximately $432 million (86%) of the $504 million was in three enforcement actions (JGC Corp., Magyar Telekom / Deutsche Telekom, and Tesler).  Approximately $458 million of the $504 million (91%) collected by the DOJ was in enforcement actions against foreign companies (JGC Corp., Magyar Telekom / Deutsche Telekom, Tenaris, and Bridgestone) or foreign nationals (Tesler).

[In 2010, the DOJ collected approximately $870 million in criminal fines in the 16 corporate FCPA enforcement actions ($1.27 billion by including the $400 million BAE enforcement action)].

Tack on the SEC’s collections in 2011 corporate FCPA enforcement actions of approximately $148 million and the overall corporate FCPA fine, penalty and disgorgement amount from 2011 is approximately $503 million  – approximately $652 million including Tesler.

[In 2010, corporate fines, penalties and disgorgement in DOJ/SEC enforcement actions was approximately $1.8 billion (including the BAE enforcement action)]

DOJ FCPA enforcement in 2011 was both large (JGC Corp. – $219 million) and small (Comverse Technologies – $1.2 million; Aon – $1.8 million).  Three FCPA enforcement actions in 2011 were DOJ only (JGC Corp., Bridgestone, and Cinergy Telecommunications).

In all six corporate FCPA enforcement actions where an analysis was possible, the DOJ agreed to a criminal fine below the minimum range suggested by the sentencing guidelines.  In these six actions, the average was approximately 28% below the minimum guidelines range and the distribution range was 55% below the minimum guidelines range (Bridgestone) and 18% below the minimum guidelines range (Magyar Telekom).  There were no corporate FCPA enforcement action in 2011 in which the company paid a criminal fine within the guidelines range.

[Note – why are only 6 of the 11 enforcement actions included in the above analysis? 4 corporate enforcement actions involved an NPA and the DOJ  does not set forth a guidelines range in the agreement or related documents and 1 enforcement action (Cinergy Telecommunications) remains pending].

[In 2010, the average was approximately 25% below the minimum guidelines range and the distribution range was 55% below the minimum guidelines range (Pride International) and 5% below the minimum guidelines range (Panalpina).  The only two corporate FCPA enforcement actions from 2010 where the company paid a criminal fine within the guidelines range were Alliance One (the company voluntarily disclosed and receive a non-prosecution agreement) and Alcatel-Lucent.]

How many corporate FCPA enforcement actions involved related individual prosecutions of company employees by the DOJ (recognizing that such prosecutions may be forthcoming in the future)?  Of the 11 corporate DOJ enforcement actions or indictments, 8 of the 11 enforcement actions (73%) have not involved thus far any DOJ prosecutions of company employees.  2011 corporate FCPA enforcement actions that have resulted in criminal charges against company employees are Armor Holdings (Richard Bistrong), Bridgestone (Misao Hioki) and Cinergy Telecommunications (Washington Cruz and Amadeus Richers).

[In 2010, 12 of the 17 corporate FCPA enforcement actions (70%) did not involve, and have not yet involved, DOJ prosecutions of company employees.]

Including Washington Cruz and Amadeus Richers (a German citizen) mentioned above, the DOJ brought 10  individual FCPA enforcement actions in 2011.   In December, in connection with the 2008 Siemens enforcement action, the DOJ brought criminal charges against:  Uriel Sharef, Herbert Steffen, Andres Truppel, Ulrich Bock, Stephan Signer, Eberhard Reichert, Carlos Sergi and Miguel Czysch.  All of these individuals are foreign nationals.  Thus, 90% of the DOJ’s individual enforcement actions in 2011 were against foreign nationals.  As noted in yesterday’s SEC year in review post, all 12 of the individuals the SEC charged with FCPA violations in 2011 were foreign nationals (in a few cases, dual citizens of a foreign country and the U.S.).

What about non-prosecution and deferred prosecutions vs. old fashioned law enforcement (i.e., if a company committed a crime the DOJ charged it and if the company did not commit a crime the DOJ did not charge it)?  In 2011, 9 of the 11 corporate FCPA enforcement actions (82%) were resolved via non-prosecution agreements (Comverse Technologies, Tenaris, Armor Holdings, and Aon) or deferred prosecution agreements (Maxwell Technologies, Tyson Foods, JGC Corp., and Johnson & Johnson).  The Magyar Telekom / Deutsche Telekom enforcement action involved both a non-prosecution agreement (Deutsche Telekom) and a deferred prosecution agreement (Magyar Telekom).  The two corporate FCPA enforcement from 2011 that involved an indictment or plea to criminal charges were Bridgestone and Cinergy Telecommunications.

[In 2010, 15 of the 16 (94%) corporate FCPA enforcement actions involved NPAs (4) or DPAs (11)].

As Gibson Dunn highlighted in this recent report, FCPA enforcement actions comprised approximately 40% of the DOJ’s 26 NPAs or DPAs in 2011. [In 2010, FCPA enforcement actions comprised approximately 50% of all DOJ NPA or DPA agreements].  Among the criticisms noted in the Gibson Dunn report of NPAs / DPAs is that “from a company’s perspective, the threat of indictment can force a company to agree to a DPA or NPA based on the government’s perception of alleged misconduct even under novel, expansive, or unlitigated theories of liability.”

In yesterday’s SEC year in review post, I noted that 90% of the $148 million the SEC collected in 2011 corporate FCPA enforcement actions was the result of volunatary disclosures or other instances of public disclosure – not original investigations by the SEC.

What does this number look like for DOJ FCPA enforcement actions in 2011?  Of the $504 million in criminal fines collected by the DOJ in FCPA enforcement actions, $502 million (99%) appear to be result of voluntary disclosures or other instances of public disclosure such as previous foreign law enforcement investigations.  The only exception would appear to be Aon ($1.8 million).

[In 2010, 97% of DOJ criminal fines would appear to fit this description].

This remainder of this post provides an overview of corporate DOJ FCPA enforcement in 2011.

*****

Maxwell Technologies (Jan. 31st)

See here for the prior post.

Charges: FCPA anti-bribery violations and knowingly violating the FCPA’s books and records provisions.

Resolution Vehicle: Criminal information resolved through a DPA (three year term).

Guidelines Range: $10.5 million to $21 million.

Penalty: $8 million (25% below the minimum amount suggested by the guidelines).

Disclosure: Yes, voluntary disclosure.

Monitor: No.

Individuals Charged: No.

Tyson Foods (Feb. 10th)

See here for the prior post.

Charges: Conspiracy to violate the FCPA’s anti-bribery and books and records provisions; FCPA anti-bribery and books and records violations.

Resolution Vehicle: Criminal information resolved through a DPA (two year term).

Guidelines Range: $5.04 to $10.08 million.

Penalty: $4 million (approximately 20% below the minimum amount suggested by the guidelines)

Disclosure: Yes, voluntary disclosure.

Monitor: No.

Individuals Charged: No.

JGC of Japan (April 6th)

See here for the prior post.

Charges: Conspiracy to violate the FCPA’s anti-bribery provisions and aiding and abetting FCPA anti-bribery violations.

Resolution Vehicle: Criminal charges resolved through a deferred-prosecution agreement – term two years.

Guidelines Range: $312.6 million to $625.2 million

Penalty: $218.8 million (30% below the minimum amount suggested by the guidelines).

Disclosure: Yes, based on a previous foreign law enforcement investigation.

Monitor: Yes.

Individuals Charged: No.

Comverse Technology (April 7th)

See here for the prior post.

Charges: None – although the non-prosecution agreement refers to a “knowing violation of the books and records provisions of the FCPA.”

Resolution Vehicle: non-prosecution agreement – term two years.

Guidelines Range: Not set forth in the NPA.

Penalty: $1.2 million.

Disclosure: Yes, voluntary disclosure.

Monitor: No.

Individuals Charged: No.

Johnson & Johnson (April 8th)

See here for the prior post.

Charges: FCPA anti-bribery violations and conspiracy to violate the FCPA’s anti-bribery and books and record provisions.

Resolution Vehicle: Criminal information resolved through a deferred prosecution agreement (three year term).

Guidelines Range: $28.5 million to $57 million.

Penalty: $21.4 million (25% below the minimum amount suggested by the guidelines).

Disclosure: Yes, voluntary disclosure (however Iraq Oil for Food conduct was not voluntarily disclosed).

Monitor: No.

Individuals Charged: None by U.S. authorities (Robert Dougall (a former DePuy executive) previously plead guilty to a U.K. SFO enforcement action – see here).

Tenaris (May 17th)

See here for the prior post.

Charges: None, although the non-prosecution agreement refers to “knowing violations of the FCPA’s anti-bribery and books and records provisions.”

Resolution Vehicle: NPA – term two years.

Guidelines Range: Not set forth in the NPA.

Penalty: $3.5 million.

Disclosure: Yes, voluntary disclosure.

Monitor: No.

Individuals Charged: No.

Cinergy Telecommunications (July 12th)

See here for the prior post.

Charges:  conspiracy to violate the FCPA and to commit wire fraud; FCPA anti-bribery violations; conspiracy to commit money laundering; and money laundering.

Resolution Vehicle:  N/A

Guidelines Range:  N/A

Disclosure:  No.

Monitor:  N/A

Individuals Charged:  Yes.

Armor Holdings (July 13th)

See here for the prior post.

Charges:  None

Resolution Vehicle:  Non-Prosecution Agreement – term two years.

Guidelines Range: Not set forth in the NPA.

Penalty: $10.3 million

Disclosure: Yes, voluntary disclosure.

Monitor: No (although Armor Holdings is now part of BAE and falls under the monitorship in the BAE FCPA-related enforcement action).

Individuals Charged: Yes.

Bridgestone (Sept. 15th)

See here for the prior post.

Charges: Conspiracy to violate the FCPA’s anti-bribery provisions (and conspiracy to violate the Sherman Act).

Resolution Vehicle:  Criminal information resolved via a plea agreement.

Guidelines Range:  For the FCPA conduct, the guidelines range (see here) was approximately $40 million – $80 million.

Penalty: $28 million (it would appear that approximately 80% of this figure – approximately $22 million was based on the FCPA conduct)

Disclosure: Yes, voluntary disclosure.

Monitor: No.

Individuals Charged:  Yes.

Aon Corp. (Dec. 20th)

See here for the prior post.

Charges: N/A although the NPA refers to Aon’s knowing violation of the anti-bribery, books and records, and internal controls provisions.

Resolution Vehicle:  NPA – term two years.

Guidelines Range:  Not set forth in the NPA.

Penalty: $1.8 million.

Disclosure: Aon’s SEC filings stated that  ”following inquiries from regulators, the Company commenced an internal review of its compliance with certain U.S. and non-U.S. anti-corruption laws, including the U.S. Foreign Corrupt Practices Act.”

Monitor: No.

Individuals Charged:  No.

Magyar Telekom / Deutsche Telekom (Dec. 29th)

See here for the prior post.

Charges:  Magyar Telekom – FCPA anti-bribery and books and records charges; Deutsche Telekom – N/A

Resolution Vehicle:  Magyar Telekom – DPA – term two years; Deutsche Telekom – NPA – term two years.

Guidelines Range:  Magyar Telekom – $72.5 million – $145 million; Deutsche Telekom – not set forth in the NPA.

Penalty:  Magyar Telekom – $59.6 million (18% below the minimum Guidelines range); Deutsche Telekom – $4.4 million

Disclosure:  Yes, voluntary disclosure.

Monitor:  No.

Individuals Charged:  No.

SEC Enforcement Of The FCPA – Year In Review

By on January 10, 2012 in Disgorgement, FCPA Statistics, Foreign Issuers, Individual Enforcement Action, SEC, SEC Enforcement Action, Voluntary Disclosure, Year in Review 2011

FCPA enforcement, it is not just about the DOJ. Granted, its sticks are less sharp than the DOJ’s, but the SEC also claims a significant piece of the FCPA enforcement pie (query whether it should – but that is a subject for another day).

Today’s post is a Year in Review of SEC FCPA Enforcement.  (See here for a similar post for 2010).  Stay tuned for a similar post on the DOJ’s Enforcement of the FCPA in 2011.

In 2011, the SEC collected approximately $148 million in 13 corporate FCPA enforcement actions.  By comparison, in 2010 the SEC brought in approximately $530 million in 19 corporate FCPA enforcement actions.   SEC FCPA enforcement in 2011 was both small (Ball Corp. – $300,000) and large (Johnson & Johnson – $48.6).

Five corporate FCPA enforcement actions from 2011 were SEC only (IBM, Ball Corp., Rockwell Automation, Diageo, and Watts Water Technologies).  Of the 13 corporate enforcement actions, only 5 (Armor Holdings, Johnson & Johnson, Tyson Foods, Maxwell Technologies, and Magyar Telekom / Deutsche Telekom) included FCPA anti-bribery charges.  In other words 8 SEC FCPA enforcement actions charged FCPA books and records and internal controls only yet in those enforcement actions the SEC collected approximately $51 million in disgorgement and prejudgment interest.  This is noteworthy because many question, and rightfully so, whether disgorgement is an appropriate remedy in cases that do not charge FCPA anti-bribery violations.  See here for a prior post.

Of the $148 million the SEC collected in 2011 corporate FCPA enforcement actions, approximately $80 million (54%) were in two enforcement actions (Johnson & Johnson and Magyar Telekom / Deutsche Telekom).  Of the $148 million, approximately $53 million (36%) were in enforcement actions against foreign issuers (Tenaris, Diageo, and Magyar Telekom / Deutsche Telekom).

The $148 million further breaks down as follows: $9.6 million  in civil penalties; $138.4  in disgorgement and prejudgment interest.  Thus 94% of SEC FCPA enforcement settlement amounts in 2011 consisted of disgorgement and prejudgment interest.  This figure last year was 96%.   If one tries to analyze why some SEC FCPA enforcement actions include a civil penalty, disgorgement and prejudgment interest (Watts Water Technologies, Diageo, Armor Holdings, Rockwell Automation, IBM), whereas other enforcement actions include only disgorgement and prejudgment interest (Comverse Technologies, Johnson & Johnson, Tenaris, Tyson Foods, Maxwell Technologies, Aon, Magyar Telekom / Deutsche Telekom), whereas other enforcement actions include only a civil penalty (Ball Corp.), good luck and please enlighten us all with your insight.

Other notable developments from corporate SEC FCPA enforcement in 2011 include use of the first alternative resolution vehicle (a DPA) against Tenaris (see here for the prior post) and four enforcement actions resolved via administrative proceedings (Ball Corp., Rockwell Automation, Diageo, and Watts Water Technologies).  As noted in this previous guest post, a provision in Dodd-Frank granted the SEC broad authority to impose civil monetary penalties in administrative proceedings.

Another significant development in 2011, albeit not FCPA specific, was the much needed scrutiny on the SEC’s neither admit nor deny settlement policy – a policy relevant to SEC FCPA enforcement actions.  See here for the prior post.   This will remain an issue to watch in 2012 as neither admit nor deny heads to the Second Circuit.

In recent years, the DOJ has been the subject of well deserved criticism for the lack of individual prosecutions in many corporate FCPA enforcement actions.  The same criticism can also be made of the SEC’s FCPA enforcement program. The SEC, at a minimum, has jurisdiction over the employees of companies settling an FCPA enforcement action and can, as demonstrated by certain FCPA enforcement actions, pursue civil FCPA anti-bribery charges, civil FCPA books and records and internal control charges, as well as other related civil charges.

However, in just 2 of the 13 (15%) corporate SEC FCPA enforcement actions in 2011 did the SEC charge individuals (Lessen Chang (Watts Water Technologies) and Elek Straub, Andras Balogh, and Tamas Morvai (Magyar Telekom)) despite allegations in other enforcement actions that employees, including in certain cases senior management, were engaged in the improper conduct at issue.  Last year, the SEC charged individuals in only 3 of the 19 corporate enforcement actions (15%).

In 2011, the SEC did charge 1 individual (Paul Jennings – see here) in connection with the 2010 Innospec enforcement action as well as 7 individuals (Uriel Sharef, Herbert Steffen, Andres Truppel, Ulrich Bock, Stephan Signer, Carlos Sergi and Bernd Regendantz  – see here) in connection with the 2008 Siemens enforcement action.  It is interesting to note that all 12 of the individuals the SEC charged with FCPA violations in 2011 were foreign nationals (in a few cases, dual citizens of a foreign country and the U.S.).

Of the 13 corporate SEC FCPA enforcement actions in 2011, 12 enforcement actions (92%) were the result of corporate voluntary disclosures or previous foreign law enforcement investigations.  The only exception is the Aon enforcement which, as noted in this prior post, “following inquiries from regulators, the Company commenced an internal review of its compliance with certain U.S. and non-U.S. anti-corruption laws, including the U.S. Foreign Corrupt Practices Act.”  Stated in terms of the approximate $148 million the SEC collected in the 13 corporate FCPA enforcement actions in 2011, $133.5 million (90%) was the result of such disclosures.  As noted in last year’s SEC Year in Review post, in 2010, 97% of the SEC’s intake in FCPA enforcement actions was the result of voluntarily or otherwise publicly disclosed information and not the result of original investigation by either the SEC.

This remainder of this post provides an overview of corporate SEC FCPA enforcement in 2011.

*****

Magyar Telekom / Deutsche Telekom (Dec. 29th)

See here for the prior post.

Charges:  Settled civil complaint charging FCPA anti-bribery and books and records and internal controls violations.

Settlement:  $31.2 million in disgorgement and pre-judgement interest.

Disclosure:  Yes, voluntary disclosure.

Individuals Charged:  Yes.

Related DOJ Enforcement Action:  Yes.

Aon Corp. (Dec. 20th)

See here for the prior post.

Charges:  Settled civil complaint charging FCPA books and records and internal controls violations.

Settlement: Approximately $14.5 million (disgorgement of $11,416,814 and prejudgment interest of $3,128,206).

Disclosure:  Aon’s SEC filings stated that  ”following inquiries from regulators, the Company commenced an internal review of its compliance with certain U.S. and non-U.S. anti-corruption laws, including the U.S. Foreign Corrupt Practices Act.”

Individuals Charged:  No.

Related DOJ Enforcement Action: Yes.

Watts Water Technologies (Oct. 13th)

See here for the prior post.

Charges:  None. Administrative cease and desist order finding violations of the FCPA’s books and records and internal control provisions.

Settlement:  $3.8 million ($2.8 million in disgorgement, $820,000 in prejudgment interest and a $200,000 civil monetary penalty).

Disclosure:  Yes, voluntary disclosure.

Individuals Charged: Yes.

Related DOJ Enforcement Action: No.

Diageo (July 27th)

See here for the prior post.

Charges:  None.  Administrative cease and desist order finding violations of the FCPA’s books and records and internal control provisions.

Settlement:  Approximately $16.4 million (approximately $11.3 million in disgorgement, approximately $1.2 million in prejudgement interest; and a $3 million civil penalty).

Disclosure:  Yes, voluntary disclosure and/or based on previous foreign law enforcement investigation.

Individuals Charged:  No.

Related DOJ Enforcement Action: No.

Armor Holdings (July 13th)

See here for the prior post.

Charges:  Settled civil complaint charging FCPA anti-bribery, books and records and internal controls violations.

Settlement:  Approximately $5.7 million (approximately $1.5 million in disgorgement; $458,000 in prejudgment interest; and a $3.7 million civil penalty)

Disclosure:  Yes, voluntary disclosure.

Individuals Charged: No.

Related DOJ Enforcement Action: Yes.

Comverse Technologies (April 7th)

See here for the prior post.

Charges: Settled civil complaint charging FCPA books and records and internal control violations.

Settlement: Approximately $1.6 million (approximately $1.2 million in disgorgement and approximately $360,000 in prejudgment interest).

Disclosure: Yes, voluntary disclosure.

Individuals Charged: No.

Related DOJ Enforcement Action: Yes.

Johnson & Johnson (April 8th)

See here for the prior post.

Charges: Settled civil complaint charging FCPA anti-bribery violations and FCPA books and records and internal controls violations.

Settlement: Approximately $48.6 million (approximately $38.2 million in disgorgement and $10.4 million in prejudgment interest).

Disclosure: Yes, voluntary disclosure (however the Iraq Oil for Food conduct was not voluntarily disclosed).

Related DOJ Enforcement Action. Yes.

Rockwell Automation (April 7th)

See here for the prior post.

Charges: None.  Administrative cease and desist order finding violations of the FCPA’s books and records and internal control provisions.

Settlement: Approximately $2.7 million (approximately $1.7 million in disgorgement; approximately $590,000 in prejudgment interest; and a $400,000 civil penalty).

Disclosure: Yes, voluntary disclosure.

Individuals Charged: No.

Related DOJ Enforcement Action: No.

Tenaris (May. 17th)

See here for the prior post.

Charges: None – resolved via a deferred prosecution agreement – term two years.

Settlement: $5.4 million in disgorgement and prejudgment interest.

Disclosure: Yes, voluntary disclosure.

Individuals Charged: No.

Related DOJ Enforcement Action: Yes.

Ball Corporation (March 24th)

See here for the prior post.

Charges:   None.  Administrative cease and desist proceeding finding FCPA books and records and internal controls violations.

Settlement: $300,000 penalty.

Disclosure: Yes, voluntary disclosure.

Individuals Charged: No.

Related DOJ Enforcement Action: No.

IBM Corporation (March 18th)

See here for the prior post.

Charges: Settled civil complaint charging FCPA books and records and internal controls violations.

Settlement: $10 million ($5.3 million in disgorgement, $2.7 million in prejudgment interest, and a $2 million civil penalty).

Disclosure: Yes, the action is reportedly the result of a prior South Korean government investigation.

Individuals Charged: No.

Related DOJ Enforcement Action: No.

Tyson Foods (Feb. 10th)

See here for the prior post.

Charges: Settled civil complaint charging FCPA anti-bribery violations and books and records and internal control violations.

Settlement: $1.2 million in disgorgement and prejudgment interest.

Disclosure: Yes, voluntary disclosure.

Individuals Charged: No.

Related DOJ Enforcement Action: Yes.

Maxwell Technologies (Jan. 31st)

See here for the prior post.

Charges: Settled civil complaint charging: FCPA anti-bribery, books and records and internal controls violations; and Section 13 disclosure violations.

Settlement: Approximately $6.3 million (approximately $5.6 million in disgorgement and $700,000 in prejudgment interest)

Disclosure: Yes, voluntary disclosure.

Individuals Charged: No.

Related DOJ Enforcement Action: Yes.

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