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Friday Roundup


Funny headline, just plain silly, new SEC FCPA Unit Chief, parallel, scrutiny alerts and updates, company continues to “boil the ocean,” and ISO 37001 related. It’s all here in the Friday Roundup.

Funny Headline

This Global Investigations Review post contains the headline “Former FCPA Unit Chiefs Defend the ‘Revolving Door’”.

That’s funny. I suppose if I moved from a government enforcement attorney position to a multimillion dollar position in FCPA Inc. defending companies against the enforcement climate I helped create, I might defend the practice as well.

But alas, that does not describe me.

To read more about this troubling dynamic of FCPA enforcement see here For my 2011 policy proposal, see here

Just Plain Silly

This Michael Volkov Corruption Crime & Compliance post titled “It Takes A Village … To Commit Bribery” is just plain silly.

The post asserts:

“FCPA, antitrust or other corporate crimes are rarely, if ever and I mean ever, restricted to a single “rouge” actor. My argument is based on a very simple notion – even if a single actor steals money from a company, then negotiates a bribe in exchange for a benefit from a foreign official, the single actor acts with the inattention or even complicity of one or more individuals in the company who is responsible for supervising the employee or a specific internal control that is designed to prevent the illegal activity.”

However, numerous DOJ and SEC officials and federal court judges have stated that just because something bad happens within a business organization does not mean that internal controls must have therefore been deficient.

Cain Becomes SEC FCPA Unit Chief

As expected, the SEC announced that Charles Cain has been named chief of the Enforcement Division’s national specialized FCPA Unit. As stated in the release:

“Since April 2017, Mr. Cain has served as Acting Chief of the FCPA Unit leading all aspects of the Enforcement Division’s national enforcement of the FCPA. Prior to being appointed Acting Chief of the FCPA Unit, Mr. Cain served as the Deputy Chief of the Unit since 2011. In 2013, Mr. Cain received the Irving R. Pollack Award recognizing his scholarship and professional expertise in co-authoring the Resource Guide to the U.S. Foreign Corrupt Practices Act setting forth a detailed analysis of the FCPA and providing insight into SEC and U.S. Department of Justice (DOJ) enforcement practices.”

Stephanie Avakian, Co-Director of the SEC’s Enforcement Division, stated:”

“Charles’s deep experience in FCPA matters is reflected in his outstanding efforts and results over the years as part of the Commission’s efforts to combat foreign bribery.”

Steven Peikin, Co-Director of the SEC’s Enforcement Division, stated:

“Our anti-corruption program under our Foreign Corrupt Practices Unit remains a top priority for the Enforcement Division. Charles ‘wrote the book’ on the Foreign Corrupt Practices Act and his strong leadership ensures that the great work of the FCPA Unit continues.”

Cain stated:

“It’s an honor and privilege to be selected to lead the enormously talented and dedicated people in the FCPA Unit. I look forward to building upon the important work the unit has done to combat corruption and level the playing field globally.”


The SEC recently highlighted the problem of certain people using social media networks to encourage the public to purchase stocks and other investments.  As stated by the SEC: “these endorsements may be unlawful if they do not disclose the nature, source, and amount of any compensation paid, directly or indirectly, by the company in exchange for the endorsement.”

This is sort of similar to an issue I’ve long called attention to in the FCPA space and that is certain FCPA commentators pitching products and services without disclosing relevant sponsorships, connections, etc.

So I will repeat my public service announcement for certain FCPA commentators (who often write about compliance and transparency).

Section 5 of the Federal Trade Commission Act requires the disclosure of a material connection between an advertiser and an endorser when the relationship isn’t otherwise apparent to consumers. As the FTC has made clear, the law applies to bloggers.

Scrutiny Alerts and Updates

Core Laboratories

The Netherlands-based company recently disclosed:

“In a letter dated October 4, 2017, the Company was informed by the U.S. Department of Justice, that in regard to the investigation by the Department of Justice, Criminal Division, Fraud Section (the “Department”) into the Company concerning possible violations of the Foreign Corrupt Practices Act related to the Company’s interactions with Unaoil (which we first disclosed in our Q2 2016 quarterly report on Form 10-Q), the Department has closed its inquiry without taking any action against the Company.  Specifically, the Department stated that “based upon the information known to the Department at this time, it has closed its inquiry into the Company in connection with this matter. The Department appreciates the Company’s cooperation during the investigation.”

The usual suspects are calling this a “declination.” However, it should be noted that the company’s FCPA scrutiny originated merely from media reports regarding Unaoil.


The French company recently disclosed:

“The investigations initiated by the UK’s Serious Fraud Office (SFO) and France’s Parquet National Financier (PNF) following self-disclosure by Airbus to the UK authorities are ongoing. Airbus is cooperating fully with both authorities, including in respect of potential issues across Airbus’ business. The SFO and PNF investigations and any penalties potentially levied as a result could have negative consequences for Airbus. The potential imposition of any monetary penalty (and the amount thereof) or other sanction arising from the SFO and PNF investigations will depend on the ultimate factual and legal findings of the investigation, and could have a material impact on the financial statements, business and operations of Airbus. However, at this stage it is too early to determine the likelihood or extent of any such possible consequence.”

Following a review of its US regulatory compliance procedures, Airbus has discovered and subsequently informed relevant US authorities of its findings concerning certain inaccuracies in filings made with the US Department of State pursuant to Part 130 of the US International Traffic in Arms Regulations (ITAR). Airbus is cooperating with the US authorities. Airbus is unable to reasonably estimate the time it may take to resolve the matter or the amount or range of potential loss, penalty or other government action, if any, that may be incurred in connection with this matter.”

Cognizant Continues to Boil the Ocean

Previous posts here, here and here have highlighted how Cognizant Technology Solutions has seemingly been “boiling the ocean” since disclosing its FCPA scrutiny in September 2016.

The company recently disclosed: “During the quarter ended September 30, 2017, we incurred $9 million in costs related to the FCPA investigation and related lawsuits.”

Add it up and Cognizant has spent approximately $60 million in approximately 12 months in connection with its FCPA scrutiny and related civil lawsuits.

During my nearly decade-long FCPA private practice career, I conducted several FCPA internal investigations around the world. Such investigations are not a cost-free exercise.

However, Cognizant’s disclosure that it has incurred approximately $60 million in approximately 12 months strikes me as highly unusual and if I were a Cognizant board member (not to mention a Cognizant shareholder), I would have some serious concerns.

ISO 37001 Related

The latest laughable marketing attempt by an ISO 37001 service provider is here (published on a once well-respected site that seems to have become largely a source of FCPA Inc. (and related) marketing masquerading as thought leadership).

My simple retort: business organizations DO NOT an ISO 37001 certification “to mitigate bribery risk and ensure their program meets global regulatory expectations and best practices.”

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