Seeking whistleblowers, scrutiny alert, and across the pond. It’s all here in the Friday roundup.
As highlighted in this previous post, a few months ago the Commodity Futures Trading Commission issued this enforcement advisory concerning companies and individuals “that timely and voluntarily disclose to the Division violations of the Commodity Exchange Act (CEA) involving foreign corrupt practices, where the voluntary disclosure is followed by full cooperation and appropriate remediation.”
Certain sources, including the FCPA Blog, falsely claimed that the CFTC is now investigating and prosecuting FCPA violations; however the CFTC advisory clearly concerns violations of the CEA. (See here for a recent FCPA Flash podcast on the topic).
Recently, the CFTC issued this alert stating that “individuals can become eligible for both financial awards and certain protections by identifying Commodity Exchange Act (CEA) violations connected to bribes of foreign government officials or similar conduct.” According to the alert, “companies and individuals engaging in foreign corrupt practices may be liable for fraud, manipulation, false reporting, or a number of other types of violations under the CEA and Commission Regulations” and such misconduct may include:
• Corrupt practices that alter the prices in commodity markets that drive U.S. derivatives prices
• Bribes employed to secure business in connection with regulated activities like trading, advising, or dealing in swaps or derivatives, paid out of funds investors believed were being used to invest
• Corrupt practices used to manipulate benchmarks that serve as the basis for related derivatives contracts, as prices that are the product of corruption might be falsely reported to benchmarks
As highlighted in this recent post, the FCPA repeat offender list may substantially grow as previous FCPA violators Johnson & Johnson, Siemens AG, General Electric Co and Philips are reportedly under scrutiny for medical equipment sales practices in Brazil.
Not surprisingly when a company or industry is under scrutiny in one country, such scrutiny expands to other countries and this Reuters article reports:
“The U.S. Securities and Exchange Commission is investigating Siemens AG, Philips NV and General Electric Co for allegedly using local middlemen to negotiate bribes with Chinese government and hospital officials to sell medical equipment. The investigations into the companies’ business in China, along with an existing SEC probe into their sales in Brazil, are part of a new effort by U.S. regulators to crack down on alleged corruption in sales of costly medical equipment worldwide […] Siemens, GE and Philips all denied wrongdoing and said they were unaware of any SEC investigation concerning their operations in China. […] Some details of the alleged scheme in China were included in a shareholder lawsuit against current and former members of GE’s board in New York state court, which the company disclosed in its 2018 annual report.”
Across the Pond
As highlighted in this previous post, in 2017 the U.K. Serious Fraud Office announced that F.H. Bertling Ltd and six current and former employees were convicted of conspiracy to make corrupt payments to an agent of the Angolan state oil company, Sonangol, in relation to F.H. Bertling’s freight forwarding business in Angola and a contract worth approximately $20m. The SFO recently announced that the company “was handed an £850,000 fine for a bribery scheme created to secure contracts in Angola.”
FCPA Institute - Denver (May 4-5)
A unique two-day learning experience ideal for a diverse group of professionals seeking to elevate their FCPA knowledge and practical skills through active learning. Learn more, spend less. CLE credit is available.