The Bible?, Rampage?, scrutiny alert, cert denied and for the reading stack. It’s all here in the Friday roundup.
This Vinson & Elkins alert calls the FCPA Guidance “the ‘Bible’ for those operating in the FCPA space.”
The “Bible” for those operating in the FCPA space is the law and other legal authority – not non-binding enforcement agency guidance.
This FCPA Blog post asserts that the “SEC is on an internal controls rampage, using the [internal controls] provision to ratchet up the minimum compliance obligations that public companies must apply to their third parties.”
That is interesting because certain of actual FCPA enforcement actions cited originated with voluntary disclosures! Call it what you want, but when the SEC processes a corporate voluntary disclosure, I am hard-pressed to call this a “rampage.”
As highlighted in this prior post, In February 2017, USANA Health Sciences Inc., a Utah based nutritional company that manufacturers supplements, personal care and healthy food products, disclosed:
“Internal Investigation of China Operations
The Company is voluntarily conducting an internal investigation of its China operations, BabyCare Ltd. The investigation focuses on compliance with the Foreign Corrupt Practices Act (“FCPA”) and certain conduct and policies at BabyCare, including BabyCare’s expense reimbursement policies. The Audit Committee of the Board of Directors has assumed direct responsibility for reviewing these matters and has hired experienced counsel to conduct the investigation. While the Company does not believe that the subject amounts are quantitatively material or will materially affect its financial statements, it cannot currently predict the outcome of the investigation on its business, results of operations or financial condition. The Company has voluntarily contacted the Securities and Exchange Commission and the United States Department of Justice to advise both agencies that an internal investigation is underway and intends to provide additional information to both agencies as the investigation progresses. Because the internal investigation is in its early stage, the Company cannot predict the duration, scope, or result of the investigation.”
Recently, the company disclosed:
“In a Form 8-K filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 7, 2017, the Company disclosed that it was conducting a voluntary internal investigation regarding its BabyCare operations in China. The investigation focused on compliance with the Foreign Corrupt Practices Act and certain conduct and policies at BabyCare. Also in 2017, the Company voluntarily contacted the SEC and the United States Department of Justice (“DOJ”) to advise both agencies that an internal investigation was underway. The Company subsequently provided additional information to both agencies and has cooperated with both agencies since first advising them of the investigation. As a result of the internal investigation, the Company implemented a number of actions to remediate the issues discovered during the internal investigation, all of which have been previously disclosed by the Company in its Annual Report on Form 10-K for the fiscal year 2017, which the Company filed with the SEC on February 28, 2018. On June 24, 2020, the SEC informed the Company that it had closed its investigation and declined any enforcement action. The SEC stated that it had reached this conclusion based on a number of factors, including, but not limited to, the Company’s (i) prompt, voluntary self-disclosure of the matters underlying the investigation, (ii) thorough internal investigation, (iii) full cooperation with the SEC, and (iv) remediation of the matters underlying the investigation. On June 26, 2020, the DOJ informed the Company by letter that it had closed its investigation into this matter, noting the Company’s cooperation during the investigation.”
This prior post highlighted Ng Lap Seng’s (an individual convicted of FCPA and related offenses “for his role in a scheme to bribe United Nations ambassadors to obtain support to build a conference center in Macau that would host, among other events, the annual United Nations Global South-South Development Expo”) petition to have the Supreme Court hear his case.
Among the questions presented was whether McDonnell v. United States (see here for the prior post concerning the Supreme Court’s 2016 decision construing 18 USC 201 – the domestic bribery statute – particularly the meaning of “official act”) applies to FCPA prosecutions.
The prior post noted that 18 USC 201 contains different language compared to the FCPA and that it was unlikely that the Supreme Court would accept cert. Recently, the Supreme Court declined to hear the case (see here).
For the Reading Stack
The most recent edition of the always informative FCPA Update from Debevoise & Plimpton is here.
Are royals foreign officials under the FCPA? This Shearman & Sterling piece addresses the issue.
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