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DOJ Enforcement Of The FCPA – Year In Review

A previous post highlighted facts and figures from SEC enforcement of the FCPA in 2013.

This post highlights facts and figures from DOJ FCPA enforcement in 2013.  (See here for a similar post from 2012, here for a similar post from 2011, and here from 2010).

In 2013, the DOJ brought 7 corporate FCPA enforcement actions.  By comparision, in 2012 the DOJ brought 9 corporate FCPA enforcement actions, in 2011 the DOJ brought 11 corporate enforcement actions, and in 2010 the DOJ brought 17 corporate enforcement actions.  (Note:  these figures, like the previous SEC figures, use the “core” approach to FCPA statistics – see here for the prior post – an approach also endorsed by the DOJ – see here).

Fine Amounts

In the 7 corporate FCPA enforcement actions from 2013, the DOJ collected approximately $420 million in criminal fines.  By comparison, in 2012, the DOJ collected approximately $142 million in criminal fines; in 2011, the DOJ collected approximately $355 million in criminal fines ($504 million including the $149 million forfeiture in the Jeffrey Tesler individual enforcement action); and in 2010, the DOJ collected approximately $870 million in criminal fines.

DOJ FCPA enforcement in 2013 ranged from $245.2 million in criminal fines (Total) to $882,000 in criminal fines (Ralph Lauren).  1 FCPA enforcement action in 2013 was DOJ only (Bilfinger).

Of the $420 million the DOJ collected in 2013 corporate FCPA enforcement actions, approximately $245.2 million (58%) was in one enforcement action (Total).  Combined with the Weatheford enforcement action ($87.2 million), two enforcement actions comprised 79% of the $420 million the DOJ collected in 2013 corporate FCPA enforcement actions.

In 3 of the 6 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 3 actions, the average was approximately 28% below the minimum guidelines range and the distribution range was 35% below the minimum guidelines range (ADM) to 20% below the minimum guidelines range (Parker Drilling).  In 3 corporate FCPA enforcement actions in 2013 (Bilfinger, Weatherford, and Total), the company paid a criminal fine within the guidelines range – either the minimum amount suggested by the guidelines or very close to the minimum amount.

[Note – why are only 6 of the 7 corporate enforcement actions included in the above analysis? 1 corporate enforcement action involved an NPA only and the DOJ did not set forth a guidelines range in the agreement or related documents.  Note, the ADM enforcement action also included an NPA, but the DOJ set forth a guidelines range in the related plea agreement involving ADM’s subsidiary]

Corporate vs. Individual Prosecutions

How many corporate FCPA enforcement actions in 2013 involved related individual prosecutions of company employees by the DOJ (recognizing that such prosecutions may be forthcoming in the future)?  Of the 7 corporate DOJ enforcement actions in 2013, 0 (0%) involved any related DOJ prosecutions of company employees.

The DOJ brought or announced 12 individual FCPA enforcement actions in 2013 in four core actions (3 individuals associated with Direct Access Partners, 4 individuals associated with Alstom, 4 individuals associated with BizJet, and 1 individual associated with Maxwell Technologies).  The individual actions against those associated with BizJet and Maxwell Technologies relate back to previous FCPA enforcement actions against the companies and thus do not increase the number of “core” FCPA enforcement actions.  (See this prior post “What is an FCPA Enforcement Action”).  Stay tuned for future posts that will update various individual FCPA enforcement data (both DOJ and SEC).

NPAs / DPAs

What about non-prosecution and deferred prosecution agreements 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 2013, 100% of corporate DOJ enforcement actions involved either an NPA (ADM and Ralph Lauren) or a DPA (Bilfinger, Weatherford, Diebold, Total, and Parker Drilling).  [Note, the ADM enforcement action involved a plea agreement as to a subsidiary and an NPA with ADM and the Weatherford enforcement action involved a plea agreement as to a subsidiary and a DPA with Weatherford.]

By way of comparison, in 2012 100% of corporate DOJ enforcement actions involved either an NPA or a DPA;  in 2011 82% of corporate DOJ enforcement actions were resolved via an NPA or DPA; and in 2010, 94% of corporate DOJ enforcement actions were resolved via such agreements.

In short, since 2010, 93% of corporate DOJ enforcement actions have been resolved via NPAs or DPAs.

Voluntary Disclosures

Of the 7 corporate DOJ FCPA enforcement actions in 2013, 4 enforcement actions (57%) were the result of corporate voluntary disclosures (ADM, Diebold, and Ralph Lauren) or the direct result of a related voluntary disclosure (the Bilfinger enforcement action was a direct result of a previous voluntary disclosure by Willbros Group).  2 enforcement actions (Parker Drilling and Total) appear to have been based on corporate disclosures following an industry sweep.  1 enforcement action (Weatherford) was based on the Iraq Oil for Food program.

Monitors

Of the 7 corporate DOJ FCPA enforcement actions in 2013, 4 enforcement actions (57%) (Bilfinger, Weatherford, Diebold and Total) involved a monitor.  The monitor term ranged from 3 years (Total) to 18 months (Bilfinger, Weatherford and Diebold).

This remainder of this post provides an overview of corporate DOJ FCPA enforcement in 2013.

ADM (Dec. 20th)

See here for the prior post.

Charges:  Criminal information against Alfred Toepfler International Ukraine (ATCI Ukraine) charging conspiracy to violate the FCPA’s anti-bribery provisions.

Resolution Vehicle:  Charges against ATCI Ukraine were resolved via a plea agreement; ADM agreed to a non-prosecution agreement (3 year term) which references violations of the FCPA’s internal controls provisions.

Guidelines Range:  $27.3 million to $54.6 million

Penalty:  $17.7 million

Disclosure:  Voluntary disclosure

Monitor: No

Individuals Charged: No

Bilfinger (Dec. 9th)

See here for the prior post.

Charges:  Conspiracy to violate the FCPA’s anti-bribery provisions and two substantive FCPA anti-bribery charges

Resolution Vehicle:  Criminal information resolved through a deferred prosecution agreement (3 year term)

Guidelines Range:  $28 million to $56 million

Penalty:  $32 million.

Disclosure:  The enforcement action was the direct result of the 2008 Willbros enforcement action which was the result of a voluntary disclosure

Monitor:  Yes (18 months)

Individuals Charged: No

Weatheford International  (Nov. 26th)

See here for the prior post.

Charges:  The criminal information against Weatherford Services Ltd. charged a violation of the FCPA’s anti-bribery provisions, the criminal information against Weatherford International Ltd. charged a violation of the FCPA’s internal controls provisions

Resolution Vehicle:  The charges against Weatherford Services were resolved via a plea agreement, the charges against Weatherford International were resolved via a deferred prosecution agreement (3 year term)

Guidelines Range:  $87.2 million to $174.4 million

Penalty:  $87.2 million

Disclosure:  The enforcement action was the result of the DOJ and SEC’s investigation of the company in connection with the Iraq oil-for-food program

Monitor:  Yes (18 months)

Individuals Charged:  No

Diebold (Oct. 22nd)

See here for the prior post.

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

Resolution Vehicle:  Criminal information resolved via a deferred prosecution agreement (3 year term)

Guidelines Range:   $36 million to $72 million

Penalty:  $25.2 million

Disclosure:  Voluntary disclosure

Monitor:  Yes (18 months)

Individuals Charged:  No

Total  (May 29th)

See here for the prior post.

Charges:  Conspiracy to violate the FCPA’s anti-bribery provisions and violating the FCPA’s books and records and internal controls provisions.

Resolution Vehicle: Criminal information resolved through a deferred prosecution agreement (3 year term).

Guidelines Range:  $235.2 to $470.4 million.

Penalty:  $245.2 million.

Disclosure:  The company disclosed as follows.  “In 2003, the SEC followed by the DOJ issued a formal order directing an investigation in connection with the pursuit of business in Iran by certain oil companies, including among others, Total.”

Monitor: Yes (3 year term)

Individuals Charged: No.

Ralph Lauren (April 22nd)

See here for the prior post.

Charges:  None.

Resolution Vehicle: Non-prosecution agreement (2 year term).

Guidelines Range:  Not set forth in the NPA.

Penalty:  $882,000

Disclosure:  Voluntary disclosure.

Monitor: No.

Individuals Charged: No.

Parker Drilling (April 16th)

See here for the prior post.

Charges: FCPA’s anti-bribery violations.

Resolution Vehicle:  Criminal information resolved via a deferred prosecution agreement (3 year term).

Guidelines Range: $14.7 million to $29.4 million.

Penalty: $11.8 million.

Disclosure: Industry sweep related to Panalpina enforcement action.

Monitor: No.

Individuals Charged: No.

SEC Enforcement Of The FCPA – Year In Review

Foreign Corrupt Practices Act enforcement, it is not just about the DOJ.  Granted, as a civil enforcement agency 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 – for instance as discussed in “The Story of the Foreign Corrupt Practices Act” the SEC wanted no part in enforcing the FCPA’s anti-bribery provisions).

Today’s post is a year in review of SEC FCPA Enforcement.  (See here for a similar post for 2012; here for a similar post for 2011; and here for a similar post for 2010).  Stay tuned for a similar post on DOJ FCPA enforcement in 2013.

Settlement Amounts

In 2013, the SEC collected approximately $300 million in 8 corporate FCPA enforcement actions.

By comparison, in 2012 the SEC collected approximately $118 million in 8 corporate FCPA enforcement actions.  In 2011 the SEC collected approximately $148 million in 13 corporate FCPA enforcement actions.  In 2010, the SEC collected approximately $530 million in 19 corporate FCPA enforcement actions.

The range of SEC FCPA enforcement actions in 2013 was, on the high end, $153 million in the Total enforcement action, and on the low end, $735,000 in the Ralph Lauren enforcement action.  Of the $300 million the SEC collected in 2013 corporate FCPA enforcement actions, approximately $219 million (73%) were in two enforcement actions (Total – $153 million and Weatherford – $66 million).

Two corporate FCPA enforcement actions from 2013 were SEC only (Philips Electronics and Stryker).

Of the 8 corporate enforcement actions from 2013, 3 enforcement actions were administrative actions (Philips Electronics, Total, and Stryker) and 1 action (Ralph Lauren) was a non-prosecution agreement.  In other words, there was no judicial scrutiny of 50% of SEC FCPA enforcement actions from 2013.  The settlement amounts in these actions comprised approximately 57% of the SEC’s $300 million collected in 2013 corporate FCPA enforcement actions.

In 2013, the SEC collected approximately $208 million in disgorgement and prejudgment interest in enforcement actions that did not charge anti-bribery violations (either administrative actions that did not charge any FCPA violations or settled civil complaints that did not charge anti-bribery violations).  In other words, approximately 69% of the $300 million the SEC collected in 2013 FCPA enforcement actions was no-charged bribery disgorgement.  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 on so-called “no-charged bribery disgorgement” cases.  In 2012, the SEC collected approximately $57.4 million in disgorgement and prejudgment interest in no-charged bribery disgorgement cases.  In 2011 the SEC collected approximately $51 million in disgorgement and prejudgment interest in n0-charged bribery disgorgement cases.

The $300 million the SEC collected in 2013 FCPA enforcement actions breaks down as follows:

$3.5 million in a civil penalty (Stryker);

$1.9 million in a civil penalty for lack of cooperation (Weatherford); and

$294.6 million in disgorgement and prejudgment interest.

Thus, 98% of SEC FCPA settlement amounts in 2013 consisted of disgorgement and prejudgment interest.  By way of comparison, in 2012 86% of SEC FCPA settlement amounts consisted of disgorgement and prejudgment interest.  In 2011, disgorgement and prejudgment interest comprised 94% of SEC FCPA enforcement settlement amounts.  In 2010, disgorgement and prejudgment interest comprised 96% of SEC FCPA enforcement settlement amounts.

If one tries to analyze why some SEC FCPA enforcement actions in 2013 included a civil penalty, disgorgement and prejudgment interest (Stryker), whereas other enforcement actions included only disgorgement and prejudgment interest (Philips Electronics, Parker Drilling, Ralph Lauren, Diebold, Weatherford, and ADM), whereas other enforcement actions included only disgorgement (Total), good luck and please enlighten us all with your insight.

Corporate vs. Individual Actions

Of the 8 SEC corporate FCPA enforcement actions from 2013, 0 (0%) have involved, at present, related SEC charges against company employees.  In 2012, 0 of the 8 corporate (0%) FCPA actions involved related SEC charges against company employees.  In 2011, 2 of the 13 (15%) corporate SEC FCPA enforcement actions involved related SEC charges against company employees.  In 2010, 3 of the 19 (15%) corporate SEC FCPA enforcement actions involved related SEC charges against company employees.

In 2013, the SEC did not otherwise charge any individuals with FCPA offenses.  (See here for a prior post titled “What is an FCPA Enforcement Action”).

Voluntary Disclosures

Of the 8 corporate SEC FCPA enforcement actions in 2013, 3 enforcement actions (38%) (Ralph Lauren, Diebold, and ADM) were the result of corporate voluntary disclosures.  3 enforcement actions (38%) (Parker Drilling, Total and Stryker) appear to have been based on corporate disclosures following an industry sweep.  1 enforcement action (Philips Electronics) was based on a previous foreign law enforcement investigation, and 1 enforcement action (Weatherford) was based on the Iraqi Oil for Food program.

This remainder of this post provides an overview of corporate SEC FCPA enforcement in 2013.

ADM (Dec. 20th)

See here for the prior post.

Charges:  Settled civil complaint charging violations of the FCPA’s books and records and internal controls provisions

Settlement:  $36.5 million (disgorgement of $33.4 million plus prejudgment interest of $3.1 million)

Disclosure: Voluntary disclosure

Individuals Charged: No

Related DOJ Enforcement Action:  Yes

Weatherford International (Nov. 26th)

See here for the prior post.

Charges:  Settled civil complaint charging violations of the FCPA’s anti-bribery provisions, books and records provisions, and internal controls provisions.

Settlement:  Approximately $65.6 million (approximately $63.7 million in disgorgement and a $1.9 million civil penalty for lack of cooperation early in the investigation.

Disclosure:  The enforcement action was the result of the DOJ and SEC’s investigation of the company in connection with the Iraq oil-for-food program

Individuals Charged:  No

Related DOJ Enforcement Action:  Yes

Stryker (Oct. 24)

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: $13.2 million (disgorgement of $7.5 million, prejudgment interest of $2.3 million, and a civil penalty of  $3.5 million)

Disclosure:  According to the company’s disclosure – “in October 2007, the Company disclosed that the SEC has made an informal inquiry of the Company regarding possible violations of the Foreign Corrupt Practices Act in connection with the sale of medical devices in certain foreign countries.”

Individuals Charged:  No

Related DOJ Enforcement Action:  No

Diebold  (Oct. 22nd)

See here for the prior post.

Charges:  Settled civil complaint charging violations of the FCPA’s anti-bribery provisions and books and records and  internal controls provisions.

Settlement:  $22.9 million in disgorgement and prejudgment interest

Disclosure:  Voluntary disclosure

Individuals Charged:  No

Related DOJ Enforcement Action:  Yes

Total (May 29th)

See here for the prior post.

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

Settlement:  Approximately $153 million in disgorgement.

Disclosure:   The company disclosed as follows.  “In 2003, the SEC followed by the DOJ issued a formal order directing an investigation in connection with the pursuit of business in Iran by certain oil companies, including among others, Total.”

Individuals Charged:  No.

Related DOJ Enforcement Action:  Yes.

Ralph Lauren (April 22nd)

See here for the prior post.

Charges:  None.  Non-prosecution agreement.

Settlement:  Approximately $735,000 ($593,000 in disgorgement and $141,845 in prejudgment interest).

Disclosure:  Voluntary disclosure.

Individuals Charged:  No.

Related DOJ Enforcement Action:  Yes.

Parker Drilling (April 16th)

See here for the prior post.

Charges:  Settled civil complaint charging violations of the FCPA’s anti-bribery provisions, and books and records and internal controls provisions.

Settlement:  Approximately $4 million ($3.05 million in disgorgement and approximately $1.04 million in prejudgment interest)

Disclosure: Industry sweep connected to Panalpina enforcement action

Individuals Charged:  No

Related DOJ Enforcement Action:  Yes

Philips Electronics (April 5th)

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 $4.5 million (approximately $3.1 million in disgorgement and approximately $1.4 million in prejudgment interest)

Disclosure: Polish law enforcement investigation prompted the company to conduct an internal investigation which it then disclosed to DOJ and SEC.

Individuals Charged:  No.

Related DOJ Enforcement Action:  No.

Friday Roundup

Scrutiny alerts and updates, sunshine, year in review roundups, and for the reading stack.  It’s all here in the Friday roundup.

Scrutiny Alerts and Updates

H-P

The company has been under FCPA scrutiny since at least 2010 and recently disclosed, in pertinent part, as follows.

“The U.S. Department of Justice and the SEC have been conducting an investigation into the Russia GPO deal and potential violations of the Foreign Corrupt Practices Act (“FCPA”). These U.S. enforcement agencies, as well as the Polish Central Anti-Corruption Bureau, are also conducting investigations into potential FCPA violations by an employee of Hewlett-Packard Polska Sp. z o.o., an indirect subsidiary of HP, in connection with certain public-sector transactions in Poland. In addition, the same U.S. enforcement agencies are conducting investigations into certain other public-sector transactions in Russia, Poland, the Commonwealth of Independent States, and Mexico, among other countries.  HP is cooperating with these investigating agencies. In addition, HP is in advanced discussions with the U.S. enforcement agencies to resolve their investigations.”

JPMorgan

The New York Times returned – yet again (see here and here for prior NY Times article) – to JPMorgan’s hiring practices in China.  The article states:

“For Wall Street banks enduring slowdowns in the wake of the financial crisis, China was the last great gold rush. As its economy boomed, China’s state-owned enterprises were using banks to raise billions of dollars in stock and debt offerings — yet JPMorgan was falling further behind in capturing that business.  The solution, the executives decided over email, was to embrace the strategy that seemed to work so well for rivals: hire the children of China’s ruling elite.

[…]

In the months and years that followed, emails and other confidential documents show, JPMorgan escalated what it called its “Sons and Daughters” hiring program, adding scores of well-connected employees and tracking how those hires translated into business deals with the Chinese government. The previously unreported emails and documents — copies of which were reviewed by The New York Times — offer a view into JPMorgan’s motivations for ramping up the hiring program, suggesting that competitive pressures drove many of the bank’s decisions that are now under federal investigation.

The references to other banks in the emails also paint for the first time a broad picture of questionable hiring practices by other Wall Street banks doing business in China — some of them hiring the same employees with family connections. Since opening a bribery investigation into JPMorgan this spring, the authorities have expanded the inquiry to include hiring at other big banks. Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs and Morgan Stanley have previously been identified as coming under scrutiny. A sixth bank, UBS, is also facing scrutiny, according to interviews with current and former Wall Street employees.

[…]

The investigation has also had a chilling effect on JPMorgan’s deal-making in China, interviews show. The bank, seeking to build good will with federal authorities, has considered forgoing certain deals in China and abandoned one assignment altogether.”

Once again, the latest NY Times article sparked much commentary.  See here, here and here.

Former Siemens Executives

The Buenos Aires Herald reports:

“Seventeen people, including former managers of the Siemens company, were … accused of paying off officials in order to help win a contract to produce the national identity cards …”.  The decision was made by Federal Judge Ariel Lijo, who decided to indict them for having allegedly committed bribery.”

Regarding the defendants, the article states:

“Twelve people working for Siemens were included in the indictment: Uriel Jonathan Sharef, Ulrich Albert Otto Fritz Bock, Eberhard George Reichert, Luis Rodolfo Schirado, Andrés Ricardo Truppel, Ernst Michael Brechtel, Bernd Regendatz, Ralph Matthias Kleinhempel and José Alberto Ares. Sharef, for instance, was a member of Siemens’ managing board. He also was the first former board member of a Fortune Global 50 company to be indicted under the US Foreign Corrupt Practices Act, as happened in 2011.  Judge Lijo also charged Carlos Francisco Soriano, Miguel Ángel Czysch and José Antonio David as “middlemen” between the company and Menem’s administration to arrange the payment for benefitting the company in the bid. The magistrate also accused Antonio Justo Solsona, Guillermo Andrés Romero, Orlando Salvestrini, Luis Guillermo Cudmani and Federico Rossi Beguy, who allegedly worked for the company competing in the bid against Siemens IT Services and who presumably agreed not to challenge the government’s decision.”

Allegations regarding the Argentine identity card project were included in the 2008 FCPA enforcement action against Siemens (see here) and also served as the basis for 2011 criminal and civil charges against several former Siemens executives, including those recently charged in Argentina (see here for the prior post summarizing the action).

As noted in this previous post, the U.S. charges against the former Siemens executives were brought after the DOJ faced scrutiny (including at the Senate’s 2010 FCPA hearing) for not bringing any individual enforcement action in connection with a bribery scheme “unprecedented in scale and geographic reach” in which there existed at Siemens a “corporate culture in which bribery was tolerated and even rewarded at the highest levels of the company.”

The U.S. criminal charges against former Siemens executives sits on the docket and a recent docket search indicates that there has not been any activity in the case in over two years.

Sunshine

Mark Cuban, who recently prevailed against the SEC in a long-running insider trading enforcement action, says in this Wall Street Journal article that he is “now considering a new venture publicizing SEC transcripts.”  Says Cuban, “I’m going to get as many as I can, and I’ll put it out there.” “Sunshine is the best disinfectant.”

The article further states:

“Mr. Cuban says he isn’t against the SEC as a whole but thinks that the lawyers who work there should be held responsible for their actions. “There’s such a revolving door, and it was run by attorneys with an attorney’s mind-set looking for their next job,” he says. “It’s a résumé builder.” Mr. Cuban says individual lawyers aren’t held accountable because the public is familiar only with the name of the SEC’s chair, Mary Jo White.  “No wonder they say or do whatever they damn well please,” he says. “I’m like, ‘OK, I’m going to start calling them out by name.’  George Canellos, co-director of the SEC’s enforcement division, sent a response to Mr. Cuban’s statements through an SEC spokesperson: “Mr. Cuban’s comments are without merit and uncalled for. Our lawyers acted in the finest traditions of government counsel and entirely appropriately in strongly advocating the position of the government in this matter.”

On a related note, did you know that the FCPA Professor Scribd page contains approximately 250 hard to find FCPA documents, pleadings, briefs, etc.

Year In Review Roundups

From the Wall Street Journal Risk & Compliance Journal page – a “Q&A with Asheesh Goel, Ropes & Gray, on The Year in FCPA

From Trace Blog – “FCPA Corporate Settlements by the Numbers

From Michael Volkov (Corruption, Crime & Compliance) – “The FCPA Person of the Year – The Prosecutor” and “FCPA Predictions for the New Year – 2014

From Thomas Fox (FCPA Compliance and Ethics Blog) – “My Favorite Blog Posts from 2013

Reading Stack

Thomas Fox (FCPA Compliance and Ethics Blog) and Jon Rydberg (Orchid Advisor) are out with a new book here titled “Anti-Bribery Leadership: Practical FCPA and U.K Bribery Act Compliance Concepts for the Corporate Board Member, C-Suite Executive and General Counsel.”

*****

A good weekend to all.

What You Need To Know From Q4

Several 2013 year in review posts will be published in the coming days.  But first, the fourth quarter of 2013 needs to be closed out.

This post provides a summary of Foreign Corrupt Practices Act enforcement actions and FCPA related events from the fourth quarter of 2013.  See here for a similar post from Q1, here for Q2 and here for Q3.

DOJ Enforcement (Corporate)

The DOJ resolved 4 corporate FCPA enforcement actions in the fourth quarter.  DOJ recovery in these enforcement action was approximately $162 million.   All 4 enforcement actions were resolved via a deferred prosecution agreement (3) or a non-prosecution agreement (1). (Note:  the ADM action and Weatherford actions also included plea agreements involving subsidiaries).

At present, none of the enforcement actions have resulted in any individual charges against company employees.

ADM (Dec. 20th)

See here for the prior post

Charges:  Criminal information against Alfred Toepfler International Ukraine (ATCI Ukraine) charging conspiracy to violate the FCPA’s anti-bribery provisions.

Resolution Vehicle:  Charges against ATCI Ukraine were resolved via a plea agreement; ADM agreed to a non-prosecution agreement (3 year term) which references violations of the FCPA’s internal controls provisions.

Guidelines Range:  $27.3 million to $54.6 million

Penalty:  $17.7 million

Disclosure:  Voluntary disclosure

Monitor: No

Individuals Charged: No

Bilfinger (Dec. 9th)

See here for the prior post

Charges:  Conspiracy to violate the FCPA’s anti-bribery provisions and two substantive FCPA anti-bribery charges

Resolution Vehicle:  Criminal information resolved through a deferred prosecution agreement (3 year term)

Guidelines Range:  $28 million to $56 million

Penalty:  $32 million.

Disclosure:  The enforcement action was the direct result of the 2008 Willbros enforcement action which was the result of a voluntary disclosure

Monitor:  Yes (18 months)

Individuals Charged: No

Weatherford International  (Nov. 26th)

See here for the prior post

Charges:  Criminal information against Weatherford Services Ltd. charging a violation of the FCPA’s anti-bribery provisions, criminal information against Weatherford International Ltd. charging a violation of the FCPA’s internal controls provisions

Resolution Vehicle:  The charges against Weatherford Services were resolved via a plea agreement, the charges against Weatherford International were resolved via a deferred prosecution agreement (3 year term)

Guidelines Range:  $87.2 million to $174.4 million

Penalty:  $87.2 million

Disclosure:  The enforcement action was the result of the DOJ and SEC’s investigation of the company in connection with the Iraq oil-for-food program

Monitor:  Yes (18 months)

Individuals Charged:  No

Diebold (Oct. 22nd)

See here for the prior post

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

Resolution Vehicle:  Criminal information resolved via a deferred prosecution agreement (3 year term)

Guidelines Range:  $36 million to $72 million

Penalty:  $25.2 million

Disclosure:  Voluntary disclosure

Monitor:  Yes (18 months)

Individuals Charged:  No

DOJ Enforcement (Individuals)

In the fourth quarter, the DOJ announced criminal charges against Alain Riedo, a Swiss citizen and former executive of Maxwell Technologies.  (See here for the prior post).  Riedo was charged with conspiracy and substantive violations of the FCPA’s anti-bribery provisions,
books and records and internal controls provisions based on the same core allegations concerning conduct in China alleged in the 2011 Maxwell Technologies enforcement action.

SEC Enforcement

The SEC resolved 4 corporate FCPA enforcement actions in the fourth quarter.  Total recovery in these enforcement actions was approximately $138 million.  At present, none of the enforcement actions have resulted in any individual charges against company employees.

The SEC did not bring any FCPA charges against individuals in the fourth quarter.

ADM (Dec. 20th)

See here for the prior post

Charges:  Settled civil complaint charging violations of the FCPA’s books and records and internal controls provisions

Settlement:  $36.5 million (disgorgement of $33,342,012 plus prejudgment interest of $3,125,354)

Disclosure: Voluntary disclosure

Individuals Charged: No

Related DOJ Enforcement Action:  Yes

Weatherford International (Nov. 26th)

See here for the prior post

Charges:  Settled civil complaint charging violations of the FCPA’s anti-bribery provisions, books and records provisions, and internal controls provisions.

Settlement:  Weatherford agreed to pay approximately $65.6 million, including a $1.9 million penalty assessed in part for lack of cooperation early in the investigation.

Disclosure:  The enforcement action was the result of the DOJ and SEC’s investigation of the company in connection with the Iraq oil-for-food program

Individuals Charged:  No

Related DOJ Enforcement Action:  Yes

Stryker (Oct. 24)

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: $13.2 million (disgorgement of $7,502,635, prejudgment interest of $2,280,888, and a civil penalty of  $3.5 million)

Disclosure:  According to the company’s disclosure – “in October 2007, the Company disclosed that the SEC has made an informal inquiry of the Company regarding possible violations of the FCPA in connection with the sale of medical devices in certain foreign countries.”

Individuals Charged:  No

Related DOJ Enforcement Action:  No

Diebold  (Oct. 22nd)

See here for the prior post

Charges:  Settled civil complaint charging violations of the FCPA’s anti-bribery provisions and books and records and  internal controls provisions.

Settlement:  $22.9 million in disgorgement and prejudgment interest

Disclosure:  Voluntary disclosure

Individuals Charged:  No

Related DOJ Enforcement Action:  Yes

Other Developments

Speeches

There were a number of speeches in the fourth quarter by high-level DOJ or SEC enforcement officials or others concerning the FCPA or relevant to FCPA issues.

As highlighted here, speaking before an FCPA audience, the Deputy Attorney General employed the common lofty rhetoric in describing the DOJ’s FCPA enforcement efforts.  At the same event, the SEC’s Co-Director of Enforcement acknowledged that “some important areas of FCPA law … [are] not well developed.”

As highlighted here, SEC Chair Mary Jo White spoke at great length as to the importance of trials.  The irony of course is that – notwithstanding White’s sensible statements – the SEC has never been put to its burden of proof in a corporate FCPA enforcement and when the SEC has been put to its burden of proof in individual FCPA enforcement actions, the SEC has an overall losing record.

As highlighted here, Judge Jed Rakoff, an influential federal court judge, hit on many of the same issues discussed in “The Facade of FCPA Enforcement” and stated that the DOJ’s frequent use of DPAs – along with the general absence of individual prosecutions – is “both technically and morally suspect.”

Foreign Official Oral Arguments

As highlighted here, oral arguments took place in the 11th Circuit in the historic “foreign official” challenge – the first time in FCPA history in which an appellate court has the opportunity to weigh in on the prominent enforcement theory that employees of alleged state-owned or state-controlled entities are “foreign officials” under the FCPA.

The Guidance One Year Later

A year has passed since the DOJ and SEC released its FCPA Guidance. One of the more useful aspects of the Guidance is that it can be used as a measuring stick for future enforcement activity.  As highlighted here, several post-Guidance enforcement actions raise the issue of whether the enforcement agencies are indeed acting consistent with their own Guidance, let alone the FCPA statue itself.

FCPA Settlements

Using the Diebold enforcement action from the fourth quarter, this post highlighted how FCPA settlement amounts have come a long way in a short amount of time.  The question was posed – have FCPA settlement amounts increased … just because?

What You Need To Know From Q3

This post provides a summary of Foreign Corrupt Practices Act activity and related developments from the third quarter of 2013.  See here for a similar post from Q1, here for Q2.

DOJ Enforcement (Corporate)

The DOJ did not bring any corporate FCPA enforcement actions in the third quarter.

Year to date, there have been 3 corporate FCPA enforcement actions.  DOJ recovery in these enforcement action has been approximately $258 million.  The Total enforcement action (approximately $245 million) comprises 95% of this amount.   All 3 enforcement actions were resolved via a deferred prosecution agreement (2) or a non-prosecution agreement (1).  At present, none of the enforcement actions have resulted in any individual charges against company employees.

DOJ Enforcement (Individuals)

Other than an additional individual defendant being added to the existing enforcement action involving individuals associated with Alstom, there were no new individual FCPA enforcement actions in the third quarter.

Year to date, the DOJ has announced FCPA or related charges against 12 individuals.  (Certain of these charges were filed in 2012 or 2011, but unsealed in 2013).  The individual charges have been in connection with 4 matters.

Tomas Clark, Alejandro Hurtado, and Ernesto Lujana (all individuals are associated with broker-dealer, Direct Access Partners).

Frederic Pierucci, David Rothschild, William Pomponi, and Lawrence Hoskins (all individuals are associated with Alstom)

Frederic Cilins (obstruction of justice charge) (Cilins is associated with BSG Resources)

Bernd Kowalewsi, Jald Jensen, Peter DuBois, and Neah Uhl (all individuals are associated with BizJet).

SEC Enforcement

The SEC did not bring any FCPA enforcement actions in the third quarter.

Year to date, there have been 4 corporate FCPA enforcement actions.  SEC recovery in these enforcement action has been approximately $162 million.  The Total enforcement action ($153 million) comprises 94% of this amount.   At present, none of the enforcement actions have resulted in any individual charges against company employees.

The SEC has not brought any FCPA charges against individuals in 2013.

Other Developments

Despite the lack of new FCPA enforcement actions in the third quarter, several companies joined the list of those under FCPA scrutiny.

GSK’s Scrutiny

For instance, one of the more notable developments from the third quarter was various headlines concerning GlaxoSmithKline and how it is the subject of bribery scrutiny for its business practices in China.  As noted in this prior post, GSK’s scrutiny is hardly earth-shattering as the pharmaceutical industry (and more broadly the healthcare sector) has been the subject of much scrutiny in the past few years including for business practices in China.

What is unique about GSK’s scrutiny is the Chinese government is investigating the alleged conduct at issue. Other items of interest include the evolution of GSK’s bribery scrutiny, the conduct of potential rogue employees, and the competition between various law enforcement agencies that is likely to ensue.

In connection with GSK’s scrutiny by the Chinese government, some have questioned the motivations of the Chinese government in investigating GSK and several other multinational pharmaceutical companies operating in China.  This prior post poses the question “should motivations matter.”

JPMorgan’s Scrutiny

Another notable instance of FCPA scrutiny (it was a lead article in the NY Times) from the third quarter concerned JPMorgan and its alleged hiring of relatives of alleged Chinese “foreign officials.”  (See here for the prior post).  The company’s FCPA scrutiny prompted much commentary (see here), including how hiring relatives of U.S. officials is common in the U.S., and once again exposed a seeming double standard between enforcement of the U.S. domestic bribery statute and the FCPA.  JPMorgan’s FCPA scrutiny focused attention on hiring family members of foreign officials and/or otherwise providing things of value to family members of alleged “foreign officials” and this prior post detailed DOJ FCPA opinion releases that touch upon such issues.

Judicial Scrutiny of DPAs

Non-prosecution agreements and deferred prosecution agreements of course are not just used to resolve FCPA enforcement actions. However, year-after-year, approximately 25-50% of the agreements are used to resolve FCPA enforcement actions. Thus, a July order by U.S. District Court Judge John Gleeson (E.D.N.Y.) approving the DPA in the HSBC enforcement action was noteworthy.  As highlighted in this prior post, Judge Gleeson stated that “a pending federal criminal case is not window dressing; nor is the court … a potted plant.”

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