Scrutiny alert, potential fallout, act like a cop be treated like a cop, and for the reading stack. It’s all here in the Friday Roundup.
Scrutiny Alert
Leighton Holdings Limited (an Australia-based holding company with ADRs registered in the U.S.) has been the focus of much recent media attention concerning business conduct in Iraq, Indonesia, Malaysia, as well as other Asian and Middle Eastern countries (see here and here for instance). In response, the company issued statements here and here.
Potential Fallout?
As noted here, earlier this week South Korea criminally charged “100 people, including senior executives at state-run energy companies, on corruption charges.” According to the article, “parts suppliers are suspected of bribing officials to accept their products with faked certification.” Among the companies mentioned is Korea Hydro and Nuclear Power Co. This company, along with other alleged state-owned or state-controlled energy companies, was mentioned in the 2009 Foreign Corrupt Practices Act enforcement action against Control Components Inc.
Time will tell if the South Korea charges might implicate various part suppliers subject to the FCPA.
Cop-Like
In this recent speech, SEC Chair Mary Jo White stated:
“The SEC is, in very important part, a law enforcement agency, and should be seen by investors to be ‘their cop.’ And, the SEC must continue to be the tough cop because in many cases, particularly when there is no criminal violation, it is the only agency that can play that role.”
White’s comment reminded me of this excellent guest post by Russell Ryan (King & Spalding and previously an Assistant Director of the SEC Enforcement Division) in which he notes, among other things, that “if the SEC’s enforcement role is more like that of a criminal prosecutor than a private plaintiff, why shouldn’t the SEC be held to some of the same procedural and evidentiary burdens of a prosecutor rather than benefitting from the more relaxed standards accorded to private plaintiffs?”
Reading Stack
An interesting Q&A with Andreas Pohlmann (Chief Compliance Officer at SNC-Lavalin Group Inc) including the following spot-on statement.
“[W]e need one global compliance program. That means that what we are doing at the time being is not establishing a Canadian compliance program, or a North American compliance program, but we are establishing a global compliance program for all of our associates all over the world, and that’s the challenge. To get out a compliance program in Montreal at the headquarters of SNC-Lavalin is still easy. It becomes challenging when we go to the more difficult regions of this world, like Latin and South America, Africa, Eastern Europe and Southeast Asia. We have to get to the hearts and minds of our people and have them live up to our worldwide standards; otherwise, the compliance program would not be credible.”
*****
A good weekend to all.
