Listening in, for the reading stack, and time served. It’s all here in the Friday Roundup.
Listening In
This previous post about the $75,000 FCPA enforcement action against Hyperdynamics highlighted that the company spent approximately $12.7 million in pre-enforcement action professional fees and expenses (a shocking 170:1 ratio).
In this recent investor conference call, company executives stated:
“The FCPA investigations restricted our available opportunities to raise capital and significantly increased our legal bills.
[…]
Speaking of legal fees I do want to address the fees we incurred during the FCPA investigation. As you know, we spent $12 MM from inception to closure of that investigation. We were unhappily aware that FCPA investigations can take years to conclude but that we only had until September 2016 because of the date for the conclusion of the concession. We therefore determined that our only option was to do everything in our power to facilitate a resolution of the investigation, and ultimately were able to close the investigations in 20 months. This came at a very heavy legal cost to say the least, but again it was the best option we saw to move forward on the path to drilling the well.”
Dear Hyperdynamics executives and shareholders, you ought to be asking some serious questions about the extent of your pre-enforcement action professional fees and expenses.
To learn more how settlement amounts in an FCPA enforcement action are often only a relatively minor component of the overall financial consequences of FCPA scrutiny and enforcement, see here for “Foreign Corrupt Practices Act Ripples.”
Reading Stack
In 2015, the UC-Davis Law Review and Fordham Law Review both held events focused on bribery and corruption topics. The articles from those events were recently published and are available below.
UC-Davis Law Review
- Keynote by Jay Jorgensen
Jay T. Jorgensen & C. Kevin Marshall – Walmart Stores, Inc. & Jones Day - Deconstructing Duty Free: Investor-State Arbitration as Private Anti-Bribery Enforcement
Andrew Brady Spalding – University of Richmond School of Law - The Mystery of Declinations Under the Foreign Corrupt Practices Act: A Proposal to Incentivize Compliance
Beverley Earle & Anita Cava – Bentley University & University of Miami School of Business Administration - Using Form to Counter Corruption: The Promise of the Public Benefit Corporation
Joseph W. Yockey – University of Iowa College of Law - The Good Bribe
Philip M. Nichols – The Wharton School of the University of Pennsylvania - How China’s Crackdown on Corruption Has Led to Less Transparency in the Enforcement of China’s Anti-Bribery Laws
Daniel C.K. Chow – The Ohio State University Michael E. Moritz College of Law - Is There a Right to Be Free from Corruption?
Anita Ramasastry – University of Washington School of Law - Corruption in India: A Violation of Human Rights
C. Raj Kumar – O.P. Jindal Global University, Jindal Global Law School
Fordham Law Review
- Opening Remarks – John D. Feerick
- Why Isn’t Congress More Corrupt?: A Preliminary Inquiry – Richard L. Hasen
- Corrupt and Unequal, Both – Lawrence Lessig
- Love, Equality, and Corruption – Zephyr Teachout
- Criminal Corruption: Why Broad Definitions of Bribery Make Things Worse – Albert W. Alschuler
- Cross-Border Corruption Enforcement: A Case for Measured Coordination Among Multiple Enforcement Authorities – Jay Holtmeier
- The “Demand Side” of Transnational Bribery and Corruption: Why Leveling the Playing Field on the Supply Side Isn’t Enough – Lucinda A. Low, Sarah R. Lamoree & John London
- Keynote Address – Preet Bharara
Time Served
In 2013 and 2014 the DOJ brought FCPA and related charges against various individuals associated with broker dealer Direct Access Partners in connection with alleged improper payments to Maria Gonzalez (V.P. of Finance / Executive Manager of Finance and Funds Administration at Bandes, an alleged Venezuelan state-owned banking entity that acted as the financial agent of the state to finance economic development projects).
As recently noted here by Reuters:
“Gonzalez “avoided prison time beyond the 16-1/2 months she already served after admitting that she accepted millions of dollars in bribes from a Wall Street brokerage to which she steered business. Maria de los Angeles Gonzalez de Hernandez, who was a senior official at Caracas-based Banco de Desarrollo Económico y Social de Venezuela, also known as Bandes, was further ordered by U.S. District Judge Denise Cote to forfeit the roughly $5 million she garnered from the scheme. Cote said she was “affected by the degree of remorse” Gonzalez showed in a statement she read to the court through an interpreter. “We’re enormously grateful for the court’s compassion and understanding,” said Jane Moscowitz, Gonzalez’s attorney, after the sentencing.”
Previously in connection with the same core action:
- Jose Hurtado was sentenced to three years in prison, followed by three years of supervised release, and consented to a $11.9 million forfeiture.
- Ernesto Lujan was sentenced to two years in prison, followed by three years of supervised release, and consented to a $18.5 million forfeiture.
- Tomas Clarke was sentenced to two years in prison, followed by three years of supervised release, and consented to a $5.8 million forfeiture.
- Benito Chinea was sentenced to four years in prison, followed by three years of supervised release, and consented to a $3.6 million forfeiture; and
- Joseph DeMeneses was sentenced to four years in prison, followed by three years of supervised release, and consented to a $2.7 million forfeiture.
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A good weekend to all.
