This recent post highlighted SEC Foreign Corrupt Practices Act enforcement against issuers in 2019.
Today’s post focuses on the other FCPA enforcement agency – the Department of Justice – and highlights various facts and figures relevant to DOJ FCPA enforcement in 2019 against business organizations. (See here for a similar post from 2018; here from 2017, here from 2016, here from 2015, here from 2014, here from 2013, here from 2012, here from 2011, and here from 2010).
Settlement Amounts and Specifics
In 2019, the DOJ brought 8 corporate FCPA enforcement actions.
By way of comparison:
- in 2018 the DOJ brought 8 corporate FCPA enforcement actions;
- in 2017 the DOJ brought 9 corporate FCPA enforcement actions;
- in 2016 the DOJ brought 13 corporate FCPA enforcement actions;
- in 2015 the DOJ brought 2 corporate FCPA enforcement actions;
- in 2014 the DOJ brought 7 corporate FCPA enforcement actions;
- in 2013 the DOJ brought 7 corporate enforcement action;
- 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 use the “core” approach to FCPA statistics – see here for the prior post – an approach also endorsed by the DOJ – see here).
In the 8 corporate FCPA enforcement actions from 2019, the DOJ collected approximately $1.62 billion.
(Note: this figure represents net FCPA settlement amounts after accounting for various credits or deductions in certain enforcement actions for related foreign law enforcement actions).
By way of comparison:
- In the 8 corporate FCPA enforcement actions from 2018, the DOJ collected approximately $618 million;
- in the 8 corporate FCPA enforcement actions from 2017, the DOJ collected approximately $845 million;
- in the 13 corporate FCPA enforcement actions from 2016, the DOJ collected approximately $1.17 billion;
- in the 2 corporate FCPA enforcement actions from 2015, the DOJ collected approximately $24.2 million;
- in the 7 corporate FCPA enforcement actions from 2014, the DOJ collected approximately $1.25 billion;
- in the 7 corporate FCPA enforcement actions from 2013, the DOJ collected approximately $420 million;
- in 2012, the DOJ collected approximately $142 million;
- in 2011, the DOJ collected approximately $355 million; and
- in 2010, the DOJ collected approximately $870 million.
Corporate DOJ FCPA enforcement in 2019 ranged from $520 million (Ericsson) to $8.7 million (Microsoft).
Corporate v. Individual Prosecutions
In the 8 corporate DOJ enforcement actions in 2019, only 1 (12%) has resulted, at present, in related DOJ FCPA charges against company employees.
Stay tuned for future posts specifically about DOJ individual FCPA enforcement actions in 2019 and historically.
Resolution Vehicles
The 8 corporate FCPA enforcement actions by the DOJ in 2018 utilized a variety of resolution vehicles:
- actual criminal charges and plea agreements (portions of the MTS, Walmart, TechnipFMC and Ericsson enforcement actions)
- deferred prosecution agreements (Samsung and portions of the MTS, TechnipFMC and Ericsson enforcement actions);
- non-prosecution agreement (Fresenius, Microsoft and portions of the Walmart enforcement action); and
- declination with disgorgement (Cognizant)
In total, 8 of the 8 corporate enforcement actions (100%) involved, in whole or in part, an NPA, DPA or declination with disgorgement.
8 of the 8 corporate enforcement actions (100%) involved, in whole or in part, an NPA, DPA or declination with disgorgement.
By way of comparison:
- in 2018, 100% of DOJ corporate enforcement actions involved an NPA, DPA or declination with disgorgement;
- in 2017, 100% of DOJ corporate enforcement actions involved an NPA, DPA or declination with disgorgement;
- in 2016 92% of DOJ corporate enforcement actions involved an NPA, DPA or declination with disgorgement;
- in 2015 100% of DOJ corporate enforcement actions involved an NPA or DPA;
- in 2014 71% of DOJ corporate enforcement actions involved an NPA or DPA;
- in 2013, 100% of corporate DOJ enforcement actions involved an NPA or DPA;
- in 2012 100% of corporate DOJ enforcement actions involved an NPA or a DPA;
- in 2011 82% of corporate DOJ enforcement actions involved an NPA or DPA; and
- in 2010 94% of corporate DOJ enforcement actions involved an NPA or DPA.
Voluntary Disclosures
Of the 8 DOJ corporate enforcement actions in 2019, 3 (37%) were the result of a voluntary disclosure.
By way of comparison:
- in 2018 25% of DOJ corporate enforcement actions were the result of a voluntary disclosure;
- in 2017 33% of DOJ corporate enforcement actions were the result of a voluntary disclosure;
- in 2016 38% of DOJ corporate enforcement actions were the result of a voluntary disclosure;
- in 2015, 50% of corporate FCPA enforcement actions were the result of a voluntary disclosure;
- in 2014, 29% of corporate FCPA enforcement actions were the result of a voluntary disclosures;
- in 2013, 57% of corporate FCPA enforcement actions were the result of a voluntary disclosure or the direct result of a related voluntary disclosure;
- in 2012, 78% of corporate FCPA enforcement actions were the result of a voluntary disclosure or casually related to previous voluntary disclosures;
- in 2011, 73% of corporate FCPA enforcement actions were the result of corporate voluntary disclosures.
Monitors
Of the 8 corporate FCPA enforcement actions in 2019, 4 (50%) resulted in a formal corporate monitor imposed by the DOJ.
By way of comparison:
- in 2018 12% of DOJ corporate FCPA enforcement actions resulted in a formal corporate monitor;
- in 2017 33% of enforcement actions resulted in a formal corporate monitor;
- in 2016 54% of enforcement actions resulted in a formal corporate monitor;
- in 2015 50% of enforcement actions resulted in a corporate monitor;
- in 2014 14% of enforcement actions resulted in a corporate monitor;
- in 2013 57% of enforcement actions resulted in a corporate monitor;
- in 2012 33% of enforcement actions resulted in a corporate monitor;
- in 2011 9% of enforcement actions resulted in a corporate monitor; and
- in 2010 41% of enforcement actions resulted in a corporate monitor.
This remainder of this post provides an overview of corporate DOJ FCPA enforcement in 2019.
Ericsson (Dec. 6th)
See here and here for prior posts.
Charges: As to Ericsson Egypt Ltd., conspiracy to violate the FCPA’s anti-bribery provisions. As to Ericsson, conspiracy to violate the FCPA’s anti-bribery, books and records, and internal controls provisions.
Resolution Vehicle: As to Ericsson Egypt, a criminal information resolved through a plea agreement. As to Ericsson, a criminal information resolved through a deferred prosecution agreement.
Guidelines Range: $612 million – $1.22 billion.
Settlement: $520 million.
Origin: SEC investigation.
Monitor: Yes
Individuals Charged by DOJ: No
Samsung Heavy Industries (Nov. 22nd)
See here and here for prior posts.
Charges: Conspiracy to violate the FCPA’s anti-bribery provisions.
Resolution Vehicle: Criminal information resolved through a deferred prosecution agreement.
Guidelines Range: $94.4 million to $188.7 million
Settlement: $37.7 million (with the same amount paid to Brazilian authorities).
Origin: Media reports / foreign law enforcement investigation.
Monitor: No.
Individuals Charged by DOJ: No
Microsoft (July 22)
See here and here for prior posts.
Charges: None.
Resolution Vehicle: Non-prosecution agreement with MS Hungary.
Guidelines Range: Not set forth in the NPA.
Settlement: $8.8 million.
Origin: Unclear, but not a voluntary disclosure. As stated by the DOJ: “MS Hungary did not receive voluntary disclosure credit because it did not voluntarily and timely disclose to the Fraud Section and the Office the conduct described in the Statement of Facts.”
Monitor: No
Individuals Charged: No
TechnipFMC (June 25)
See here for the prior post.
Charges: As to Technip USA a criminal information charging conspiracy to violate the FCPA’s anti-bribery provisions; as to TechnipFMC criminal information charging two counts of conspiracy to violate the FCPA’s anti-bribery provisions.
Resolution Vehicle: As to Technip USA, plea agreement; as to TechnipFMC, deferred prosecution agreement.
Guidelines Range: $282 million – $564 million
Settlement: Net $81.9 million after a credit of $214 million paid to Brazil law enforcement in connection with a related matter.
Origin: The company disclosed that it “received an inquiry from the DOJ.”
Monitor: No
Individuals Charged: Yes
Walmart (June 20)
See here, here and here for prior posts.
Charges: As to Walmart Brasilia, violations of the books and records provisions; as to Walmart none (but reference is made in the NPA to the internal controls provisions).
Resolution Vehicle: As to Walmart Brasilia, plea agreement; as to Walmart NPA
Guidelines Range: Not set forth in the NPA, but it does state: “Walmart agreed to pay a total monetary penalty in the amount of approximately $138 million which reflects a discount of 25% off of the bottom of the U.S. Sentencing Guidelines fine range for the portion of the penalty applicable to conduct in Brazil, China, and India, and 20% off of the bottom of the U.S. Sentencing Guidelines fine range for the portion of the penalty applicable to conduct in Mexico.”
Settlement: $138 million.
Origin: The NPA states: “The Defendant did not receive voluntary disclosure credit because it did not voluntarily and timely disclose, through the Parent Company, to the Fraud Section and the Office the conduct … Although the Parent Company disclosed the conduct related to Brazil prior to the Fraud Section or the Office learning of that conduct, such disclosure was after the Fraud Section and the Office had already begun investigating the Parent Company relating to conduct in another country.” The SEC order states: ““Walmart made an initial self-disclosure of the potential FCPA violations in Mexico to the Commission’s staff in November 2011, after it retained outside counsel to conduct an internal investigation under the direction of the Audit Committee of Walmart’s Board of Directors. Subsequently, Walmart voluntarily expanded its investigation and disclosed its findings concerning Brazil, China, and India to the Commission staff, although such disclosure was after the Commission staff had already begun investigating the Company related to conduct in Mexico.” Walmart’s 8-K filing on the day of the enforcement action states: “As previously reported, the Audit Committee of the Board of Directors (the “Audit Committee”) of Walmart Inc. (the “Company”) conducted an internal investigation into, among other things, alleged violations of the U.S. Foreign Corrupt Practices Act (“FCPA”) and other alleged crimes or misconduct in connection with the Company’s foreign subsidiaries, including Wal-Mart de México, S.A.B. de C.V., and whether prior allegations of such violations and/or misconduct were appropriately handled by the Company. In November 2011, the Company voluntarily disclosed that investigative activity to the U.S. Department of Justice (the “DOJ”) and the Securities and Exchange Commission (the “SEC”), with the DOJ and the SEC opening related investigations of the Company. The Audit Committee and the Company also investigated allegations of FCPA violations in foreign subsidiaries in Brazil, India, and China, and engaged outside counsel from a number of law firms and other advisors who assisted the investigation of all of these matters.”
Monitor: Yes
Individuals Charged: No
Cognizant Technology Solutions (Feb. 15)
See here, here and here for prior posts.
Charges: None
Resolution Vehicle: Declination with disgorgement
Guidelines Range: Not mentioned in the letter agreement
Settlement: None, the letter agreement refers to disgorgement of $19,370,561 which the DOJ credited based on the parallel resolution with the SEC
Origin: Voluntary disclosure
Monitor: No
Individuals Charged: Yes
MTS (March 6)
See here and here for prior posts
Charges: As to Kolorit Dizayn Ink LLC, criminal information charging conspiracy to violate the FCPA’s anti-bribery and books and records provisions; as to MTS criminal information charging conspiracy to violate the FCPA’s anti-bribery and books and records provisions
Resolution Vehicle: Kolorit resolved the charges through a plea agreement; MTS resolved the charges through a DPA
Guidelines Range: The DPA references an advisory guidelines range of $673 million to $1.35 billion
Settlement: $750 million
Origin: The related Uzbekistan matters (MTS, Telia, and Vimpelcom) began with foreign media reporting
Monitor: Yes
Individuals Charged: No
Fresenius (March 29)
See here for a prior post
Charges: None
Resolution Vehicle: NPA
Guidelines Range: None referenced in the NPA although it states “40% off of the bottom” of the guidelines range
Settlement: $84.7 million
Origin: Voluntary disclosure
Monitor: Yes
Individuals Charged: No
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