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Friday Roundup


No jail time for Stevens, scrutiny alert, neither admit nor deny airball, Jorgensen to depart Walmart, scrutiny alert and ripple. It’s all here in the Friday roundup.

No Jail Time for Steven

Further to the randomness of FCPA sentences (see here for the prior post), former Embraer executive Colin Steven (who plead guilty to causing $1.5 million in bribe payments to be made by Embraer to a Saudi Official in connection with a $93 million sale as well as receiving approximately $130,000 in kickbacks) was recently sentenced to no jail time. (See here for coverage).

Meanwhile, Joel Esquenazi (who was found guilty in 2011 of paying $890,000 to shell companies to be used for bribes to Haiti “foreign officials” to receive preferred telecommunication rates from the alleged state-owned telecommunications company) is approximately seven years into his fifteen year sentence.

Scrutiny Alert

CHS Inc., a a farmer- and cooperative-owned company providing grain, foods and energy, recently disclosed:

“In the fourth quarter of fiscal 2018, we contacted the U.S. Department of Justice and SEC to voluntarily self-disclose potential violations of the FCPA in connection with a small number of reimbursements the Company made to Mexican customs agents in the 2014-2015 time period for payments the customs agents made to Mexican customs officials in connection with inspections of grain crossing the U.S.-Mexican border by railcar. We are fully cooperating with the government, including with the assistance of legal counsel, which assistance includes investigating other areas of potential interest to the government. We are unable at this time to predict when our or the government agencies’ review of these matters will be completed or what regulatory or other outcomes may result.”

Neither Admit Nor Deny Airball

Numerous prior posts (see here for the subject matter tag) have focused on the SEC’s neither admit nor deny settlement policy.

Current SEC Chair Jay Clayton certainly did not come up with this policy (it dates back to the 1970’s), but given the opportunity to defend the policy in a recent Senate Banking Committee hearing, Clayton shot an airball (see here for the video).

Moreover, Clayton’s justification that this settlement policy allows the SEC to “get people their money back” and to “get bad actors out of the marketplace” has little, if any, relevance to FCPA enforcement actions in which this settlement policy is frequently used.

Jorgensen to Depart Walmart

Since 2012, Jay Jorgensen has led Walmart’s Global Ethics and Compliance team.  As noted here:

“Walmart Inc. announced today that Jay Jorgensen, its executive vice president and global chief ethics and compliance officer, is leaving the company to pursue other opportunities. He will be replaced by Daniel Trujillo, the company’s senior vice president and international chief compliance officer, on Feb. 1.”

See here for Jorgensen’s guest post on Walmart’s enhanced ethics and compliance program.

Scrutiny Alert

Colombia-based Grupo Aval Acciones y Valores S.A. recently disclosed:

“Grupo Aval Acciones y Valores S.A. (“Grupo Aval”) has recently received an inquiry from the United States Department of Justice (“DOJ”) concerning the Ruta del Sol 2 project.  Grupo Aval has informed the DOJ, through its U.S. counsel, that it intends to cooperate with the DOJ’s investigation, as it has done with all prior government inquiries into this matter.  Grupo Aval takes this and any other government investigation that may arise very seriously.  To the extent there are material developments relating to Ruta del Sol 2, Grupo Aval does not intend to disclose those developments other than in its regular quarterly earnings reports.”

As noted in this media report, “the inquiry regards a 2010 partnership between its subsidiary Corficolombiana, Odebrecht and Cass Constructores to build the 528 kilometer (328 mile) Ruta del Sol 2 highway to Colombia’s Caribbean coast, a contract worth some $1.5 billion.”

As highlighted in this prior post, the 2016 Obebrecht enforcement action included conduct in Colombia, specifically the allegation that “between 2009 and 2014, Odebrecht made and caused to be made more than $11 million in corrupt payments in Colombia in order to secure public works contracts.”


FCPA Ripples highlights how settlement amounts in an actual FCPA enforcement action are often only a relatively minor component of the overall financial consequences that can result from FCPA scrutiny or enforcement in this new era. Even if there is no enforcement action, companies often suffer negative consequences just because of FCPA scrutiny.

For instance, in 2012 Net1 UEPS (a South African telecommunications company with shares traded on a U.S. exchange) disclosed that it had received information requests from the DOJ and SEC following South African media reports concerning civil litigation in that country by an unsuccessful bidder of a telecommunications contract. There never was an enforcement action, but recently the company disclosed:

“Our current and potential competitors may use U.S. laws and regulations, including the FCPA, to disrupt our business operations and harm our reputation in the territories in which we operate or in which we intend to expand into. For instance, as we have previously reported, in November 2012, the U.S. Department of Justice commenced an investigation into whether we violated the FCPA and other U.S. federal criminal laws by engaging in a scheme to make corrupt payments to officials of the South Africa government in connection with securing our 2012 SASSA contract and whether we violated federal securities laws in connection with statements made by us in our SEC filings regarding this contract. The investigations commenced as a result of reports made to the relevant U.S. authorities by a losing bidder to the 2012 SASSA contract. While these investigations have all been concluded with no adverse findings against us, during the course of the investigations, management’s time was diverted from other matters relating to our business and we suffered harm to our business reputation. Furthermore, in fiscal 2013, the FSB suspended Smart Life’s insurance license. Our management has to spend a disproportionate amount of time explaining the circumstances surrounding, and the result of the investigations, when engaging new business partners, shareholders or regulators.”

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