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Friday Roundup


SEC Chair Clayton on “appropriate settlements,” sentenced, and Odebrecht related. It’s all here in the Friday roundup.

“Appropriate Settlements”

SEC Chairman Jay Clayton recently released this statement which contains a section titled “Factors That Drive Appropriate Settlements.” In pertinent part, the section states:

“It often is noted that the cost of litigation—or, more accurately, avoiding the cost of litigation— is a key driver of settlements. This is undoubtedly correct, as that cost—in terms of dollars as well as other less-tangible factors—can be significant for many defendants.

There are, however, other factors that can drive appropriate settlements. One important factor is the demonstrated willingness of the Commission to litigate zealously if a timely and reasonable offer of settlement is not made. When no such offer has been made, I believe we should promptly file an action and pursue all appropriate remedies. Our practice reflects this principle. In addition, we are bolstering, and expect to continue to bolster, our trial and trial-support resources.

Another factor that drives appropriate settlements is the importance of promptly remedying harm to investors. Investor protection is at the core of the Commission’s mission and, from the Commission’s perspective, an attractive settlement offer is one that provides appropriate remedial relief, including any return of money to injured investors, more quickly than would be expected in a litigated action. I encourage settling parties to craft their settlement offers with this perspective in mind and also to be flexible and creative to maximize the remedial effects of proposed settlements.

A fourth factor that drives appropriate settlements is a desire for certainty. In particular, the ongoing and potential consequences of a litigated action often motivate an entity to pursue a settlement that puts the matter behind it. The Commission’s ability to provide such certainty can be another critical factor in reaching a settlement that is in the best interest of investors. Put simply, the Commission’s willingness to zealously pursue all appropriate remedies often is a strong stick and, at the same time, the ability of the Commission to provide a full and final resolution of a matter often is a significant carrot.

Pursuing a settlement agreement that provides certainty can be complex, including because the imposition of certain types of relief by the Commission and other authorities can have significant collateral consequences. For example, remedies such as the imposition of an injunction against future violations of the antifraud provisions of the federal securities laws, or the requirement that an entity undertake to retain an independent compliance consultant, may subject the entity to collateral disqualifications that, as a practical matter, can prohibit the entity from continuing to conduct certain businesses. The effects of these collateral consequences can vary widely depending on the scope of the businesses and operations of the entity and, in practice, range from immaterial to extremely significant. In certain cases, these collateral consequences are wholly appropriate, including to serve important investor protection considerations. In other cases, in whole or in part, they may not be, including because other measures may more appropriately address the conduct at issue and related investor protection considerations.”


As highlighted in this prior post, in connection with the Ng Lap Seng enforcement action, the DOJ also charged Julia Vivi Wang (a U.S. citizen) with conspiracy to violate the FCPA, a violation of the FCPA, and tax offenses. As alleged in the information, Wang “agreed to pay and offer money and other things of value to foreign officials in the Caribbean … in exchange for and to influence the taking of official action and to secure an improper advantage for Chinese businesses and business people looking to do business in the Caribbean.”

As noted here, Wang was recently sentenced to serve three years of probation and ordered to make more than $629,000 of restitution, to include money she was paid by Ng’s interests that she didn’t report to the IRS.

Odebrecht Related

In this piece, the International Consortium of Investigative Journalists (ICIJ) goes in-depth into Odebrecht’s bribe-paying division (see here for the prior post regarding the company’s 2016 FCPA enforcement action.”

“The Bribery Division, a new investigation led by the ICIJ, reveals that Odebrecht’s cash-for-contracts operation was even bigger than the company has acknowledged, and involved prominent figures and massive public works projects not mentioned in the criminal cases or other official inquiries to date.”

This piece focuses on the Miami connections to the bribery scandal.

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