In mid-2018 Glencore (a commodities company incorporated in the United Kingdom and headquartered in Switzerland with common stock that trades on the New York based over-the-counter market) disclosed that it was under scrutiny by the DOJ. (See here for the prior post).
Specifically, the company disclosed:
“Glencore Ltd, a subsidiary of Glencore plc, has received a subpoena dated 2 July, 2018 from the US Department of Justice to produce documents and other records with respect to compliance with the Foreign Corrupt Practices Act and United States money laundering statutes. The requested documents relate to the Glencore Group’s business in Nigeria, the Democratic Republic of Congo and Venezuela from 2007 to present. Glencore is reviewing the subpoena and will provide further information in due course as appropriate.”
As highlighted in this prior post, in mid-2019 the Commodity Futures Trading Commission (CFTC) joined the fray as the company disclosed:
“Glencore has been informed by the United States Commodity Futures Trading Commission (“CFTC”) that the CFTC is investigating whether Glencore and its subsidiaries may have violated certain provisions of the Commodity Exchange Act and/or CFTC Regulations through corrupt practices in connection with commodities. Glencore understands that the CFTC’s investigations are at an early stage and have a similar scope in terms of subject matter as the current ongoing investigation by the US Department of Justice (“DOJ”). Glencore will cooperate with the CFTC. Glencore’s response will be managed by its Investigations Committee, which was set up in July 2018 to oversee Glencore’s response to the investigation by the DOJ.”
Set forth below is what the company disclosed in its most recent annual report:
Investigations By Regulatory and Enforcement Authorities
The Group is subject to a number of investigations by regulatory and enforcement authorities including:
• The United States Department of Justice is investigating the Group with respect to compliance with various criminal statutes, including the Foreign Corrupt Practices Act, United States money laundering statutes and fraud statutes related to the Group’s business in certain overseas jurisdictions.
• The United States Commodity Futures Trading Commission (“CFTC”) is investigating whether the Group may have violated certain provisions of the Commodity Exchange Act and/or CFTC Regulations including through corrupt practices in connection with commodities trading.
• The United Kingdom Serious Fraud Office is investigating the Group in respect of suspicions of bribery in the conduct of business of the Group.
• The Brazilian authorities are investigating the Group in relation to “Operation car wash”, which relates to bribery allegations concerning Petrobras.
• The Office of the Attorney General of Switzerland is investigating Glencore International AG for failure to have the organisational measures in place to prevent alleged corruption.
The Board has appointed a committee, the Investigations Committee (“the Committee”), to oversee the response to the investigations on behalf of the Board. The Committee has engaged external legal counsel and forensic experts to assist in responding to the various investigations and to perform additional investigations at the request of the Committee covering various aspects of the Group’s business. The Group is continuing to cooperate fully with the various authorities, including through reporting to those authorities facts relevant to their investigations. The investigations are complex and dynamic including in relation to scope. The timing and outcome of the various investigations remain uncertain. At 31 December 2020, taking account of all available evidence, the Committee concluded that it is not probable that a present obligation existed at the end of the reporting period for the above regulatory and enforcement proceedings. Consequently, the timing and amount, if any, of financial effects (such as fines, penalties or damages, which could be material) or other consequences, including external costs, from any of the various investigations and any change in their scope is not possible to predict or estimate.”
