Well represented, scrutiny alerts / updates, and a timetable. It’s all here in the Friday roundup.
Companies that have resolved FCPA enforcement actions or have been otherwise the subject of FCPA scrutiny are well represented in Ethisphere’s recent World’s Most Ethical Companies list.
I point this out not to argue that Ethisphere’s methodology if flawed, but to demonstrate, consistent with this prior post, that just because a company resolves an FCPA enforcement action does not therefore mean that the company is a bad or unethical company. To the contrary, many FCPA enforcement actions involve companies, such as those on World’s Most Ethical Companies list, that have pre-existing FCPA compliance policies and procedures, yet because of respondeat superior, face legal exposure based on the conduct of a small group of individuals.
Companies appearing on the list that have recently resolved FCPA enforcement actions, or have otherwise been the subject of FCPA scrutiny, are: ABB, Deere & Company, Dun & Bradstreet, General Electric, Rockwell Automation, and Sempra Energy.
Scrutiny Alerts / Updates
Christopher Matthews (Wall Street Journal – Corruption Currents) reported earlier this week (here) that Optimer Pharmaceuticals is “investigating whether an attempted grant of stock options to the company’s co-founder violated the FCPA. According to the company’s recent earnings call transcript, the conduct under investigation relates to an “attempted grant in September of 2011 to Dr. Michael Chang of 1.5 million technical shares of Optimer Biotechnology, Inc. (“OBI”) as well as “a potentially improper $300,000 payment in July 2011 to a research laboratory involving an individual who was also associated with the OBI share grant.” The company has disclosed the results of its preliminary investigation to the DOJ and SEC.
As noted in this previous post, business interests or equity interests have previously been a basis for FCPA scrutiny and FCPA enforcement actions.
“On December 26, 2012, we received a request by the staff of the United States Securities and Exchange Commission (“SEC”) that the Company take steps to preserve and retain five categories of documents relating to commercial agents who perform services for the corporate group in a foreign jurisdiction, the Company’s general use of commercial agents in that jurisdiction, and compliance with the Foreign Corrupt Practices Act. This request stated that it “should not be construed as an indication by the Commission, or its staff, that any violations of law have occurred; nor should it be considered an adverse reflection upon any person, entity, or security.” We have, under the advice and through independent external legal counsel, cooperated with and have provided the SEC staff with specific information which it has requested. External legal counsel for the Company has been advised by the SEC staff that no formal order of investigation has been issued. The outcome of the SEC’s review and any future financial impact resulting from this matter are indeterminable at this time.”
Bio-Rad Laboratories Inc., a company that previously disclosed FCPA scrutiny, disclosed earlier this week (see here) that it would be unable to file its annual report for the year ended December 31, 2012 prior to the filing deadline. The SEC filing states, in pertinent part, as follows.
“Bio-Rad is unable to file its Annual Report on Form 10-K for the year ended December 31, 2012 (the “Form 10-K”) prior to the filing deadline because the Company has not finalized its assessment of the effectiveness of its internal control over financial reporting due in part to recently raised issues and has not finalized an accrual for royalties payable by the Company as of December 31, 2012 under certain patent licenses from a third party. As previously reported, the Company has implemented enhancements to its internal control over financial reporting and is continuing to evaluate and improve its internal controls, including processes and procedures relating to the Company’s compliance with the U.S. Foreign Corrupt Practices Act (“FCPA”). The Company is currently in the process of finalizing its assessment of the effectiveness of its internal control over financial reporting as of December 31, 2012 and will be unable to file the Form 10-K until the Company completes this assessment. “
Brookfield Asset Management
Prior posts here and here discussed the scrutiny of Brookfield Asset Management for conduct in Brazil. Today, the Wall Street Journal reported (here) that the “SEC is looking into allegations that a Brazilian unit” of the company “paid bribes to win construction permits.” According to the article, “a member of the SEC’s enforcement division is scheduled to interview a former executive in the Sao Paulo unit of Brookfield who made the allegations.” According to the article “the allegations include that Brookfield employee hired an armored truck to deliver cash to two city officials to speed the permits.”
A good weekend to all.